Kansai Nerolac's margin rebounds sequentially but slips year on year
Revenue momentum exceeded cost growth sequentially, but higher depreciation and interest limited year-on-year profit growth to +5.95%.
Filed 03 Aug 2026, 18:28 IST · after market close · Kansai Nerolac Paints Ltd (KANSAINER)
Key takeaways
- Consolidated revenue grew +9.79% year on year, but expenses rose faster at +10.02%, narrowing operating margin by 0.19 percentage points.
- Operating margin recovered 2.75 percentage points sequentially to 13.83% as revenue growth of +21.49% outpaced expense growth of +17.73%.
- Other income contributed 17.58% of profit before tax, making the Rs 228.41 cr net profit less dependent on operating earnings alone.
Price around the results
Revenue momentum lifted the consolidated quarter
Kansai Nerolac reported consolidated revenue growth of +9.79% year on year, while operating profit grew more slowly at +8.32%. The gap reflects expenses increasing +10.02%, ahead of revenue, and kept net profit growth to +5.95%. Sequentially, revenue rose +21.49% and operating profit increased +51.67%, indicating a marked improvement from Q4FY26.
Sequential margin recovery was offset by higher fixed charges
Operating margin improved 2.75 percentage points sequentially because revenue growth of +21.49% outpaced expense growth of +17.73%. Year on year, the opposite relationship caused a 0.19 percentage-point margin contraction. Depreciation increased +18.68% and interest rose +8.97% year on year, which helped limit profit before tax growth to +5.75% despite the increase in operating profit.
Margin is above the peer median but below last year's level
The operating margin has moved from 14.02% in Q1FY26 to 11.02% in Q2FY26, 12.09% in Q3FY26, 11.08% in Q4FY26 and 13.83% now, so the latest quarter marks a recovery rather than a straight upward trend. Among 65 Consumer Discretionary peers that have reported, Kansai Nerolac's margin was 0.40 percentage points above the 13.43% median. Other income accounted for 17.58% of profit before tax, while the sequential tax-rate decline of 3.74 percentage points also supported net profit.
Market response awaits the post-close filing
The consolidated results were filed after market close, so the immediate market response is not yet part of this report. Across the last eight results, the stock has risen after four and fallen after four, with a median absolute move of 2.66%. That history points to a mixed reaction pattern rather than a consistent direction.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,374 cr | ₹1,954 cr | +21.49% | +9.79% |
| Other income | ₹55 cr | ₹11 cr | +387.92% | +4.43% |
| Expenses | ₹2,045 cr | ₹1,737 cr | +17.73% | +10.02% |
| Operating profit | ₹328 cr | ₹217 cr | +51.67% | +8.32% |
| Operating margin (%) | 13.83% | 11.08% | — | — |
| Interest | ₹8 cr | ₹8 cr | -4.75% | +8.97% |
| Depreciation | ₹63 cr | ₹61 cr | +3.17% | +18.68% |
| Profit before tax | ₹312 cr | ₹158 cr | +97.21% | +5.75% |
| Tax | ₹84 cr | ₹49 cr | +73.12% | +5.23% |
| Net profit | ₹228 cr | ₹110 cr | +107.85% | +5.95% |
| EPS (₹) | ₹2.86 | ₹1.39 | +105.76% | +4.76% |
Operating margin of 13.83% compares with a Consumer Discretionary sector median of 13.43% across 65 peers that have reported Q1FY27.
What to watch
- Whether operating margin holds above 13.83% in the next reported quarter.
- Whether revenue growth remains ahead of expense growth after the current +21.49% versus +17.73% sequential spread.
- Whether depreciation growth moderates from +18.68% year on year.