Kansai Nerolac, the third largest paint company in India, is the leader in the industrial coating business with ~60 per cent share in the automotive coating segment. The company is also one of the few profitable players in this segment. It has an edge due to value engineering, which helps reduce costs for consumers (for example, the number of paint coats is lesser, which lowers expenses for the consumer).
The company has four manufacturing facilities and is investing in two other plants in Punjab and Gujarat. About ~55 per cent of its business is derived from the decorative paints segments, while the remaining ~45 per cent share is from the industrial segment. Traction in the decorative segment was aided by the company´s dealer network, which has increased from 10,000 to 16,000 in the past six years.
Kansai has coating solutions across the decorative, wood coatings, general industrial, high performance coatings, powder coatings, automotive, and auto refinish market segments. The company is also setting up a global R&D facility at Navi Mumbai, which will help further innovation. It is also giving higher focus on certain paint products and states (Uttar Pradesh, eastern India and parts of Rajasthan, etc.) where growth has doubled versus overall markets.
During FY2016, the company achieved net consolidated revenue from operations of Rs 3,819.29 crore as against Rs 3,532.41 crore in the previous year, registering a growth of 8.1 per cent, whereas net profit for the year grew by 228 per cent in FY2016 due to margin expansion, and on extraordinary income from sale of its Chennai land for a consideration of Rs 537.86 crore. However, the company´s net profit has grown by 64 per cent during the period FY2012 to FY2016 (adjusting for the extraordinary income in FY2016) and revenues have grown by 47 per cent in the same period.