Kansai Nerolac margin slips as costs outpace revenue growth
Consolidated operating margin fell to 9.12%, while net profit declined 10.38% year on year and other income remained material.
Filed 24 Jun 2026, 16:23 IST · after market close · Kansai Nerolac Paints Ltd (KANSAINER)
Key takeaways
- Consolidated operating margin fell 1.53 percentage points year on year to 9.12% as expenses grew 4.43% against 2.67% revenue growth.
- Consolidated net profit declined 10.38% year on year to Rs 102.43 cr, despite other income contributing 25.84% of profit before tax.
- The stock opened 3.12% lower but ended 0.59% higher, a smaller closing move than its 2.08% median reaction after the last eight results.
Price around the results
Revenue growth did not absorb the cost increase
Consolidated revenue rose 2.67% year on year, but expenses grew 4.43%, reducing operating profit by 12.08%. The resulting 1.53-percentage-point margin contraction took operating margin to 9.12%. Sequentially, revenue fell 5.48% and expenses fell only 2.13%, widening the margin decline to 3.11 percentage points.
Profit was supported by non-operating income
Other income accounted for 25.84% of consolidated profit before tax, so reported profit was not driven entirely by operations. This contribution was sharply lower sequentially, with other income falling 94.47% from Q3FY25, when profit before tax included a much larger non-operating contribution. The tax rate also rose 7.13 percentage points sequentially and 1.63 percentage points year on year.
Margin remains below the peer benchmark
Operating margin has been volatile across the reported quarters, moving from 15.95% in Q3FY24 to 10.65% in Q4FY24, 15.45% in Q1FY25, 10.86% in Q2FY25, 12.23% in Q3FY25 and 9.12% in Q4FY25. The latest margin was 5.14 percentage points below the 14.26% median for 83 Consumer Discretionary peers that had reported the quarter. Kansai Nerolac ranked 16th from the bottom on this measure.
The market reaction was mixed but within its usual range
The stock opened 3.12% lower after the results but closed 0.59% higher, and was up 2.70% five sessions later. Across the last eight result reactions, it rose after five and fell after three, with a median absolute move of 2.08%, making the closing reaction smaller than its usual move despite the initial gap down.
Q4FY25 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY25 | Q3FY25 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,817 cr | ₹1,922 cr | -5.48% | +2.67% |
| Other income | ₹37 cr | ₹671 cr | -94.47% | +14.02% |
| Expenses | ₹1,651 cr | ₹1,687 cr | -2.13% | +4.43% |
| Operating profit | ₹166 cr | ₹235 cr | -29.50% | -12.08% |
| Operating margin (%) | 9.12% | 12.23% | — | — |
| Interest | ₹8 cr | ₹9 cr | -15.21% | +9.54% |
| Depreciation | ₹52 cr | ₹53 cr | -3.37% | +7.59% |
| Profit before tax | ₹144 cr | ₹844 cr | -82.99% | -8.33% |
| Tax | ₹41 cr | ₹181 cr | -77.35% | -2.79% |
| Net profit | ₹102 cr | ₹662 cr | -84.53% | -10.38% |
| EPS (₹) | ₹1.34 | ₹8.42 | -84.09% | -6.94% |
Operating margin of 9.12% compares with a Consumer Discretionary sector median of 14.26% across 83 peers that have reported Q4FY25.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.59% | +0.45% |
| Next session | -0.39% | — |
| 5 sessions | +2.70% | +1.53% |
| 15 sessions | +0.41% | — |
| 30 sessions | -3.75% | — |
Volume on the results session was 1.28× its 20-day average.
What to watch
- Whether consolidated operating margin holds above 9.12% after the latest 1.53-percentage-point year-on-year decline.
- Whether expenses grow more slowly than revenue after rising 4.43% against 2.67% year on year.
- Whether other income falls further from its 25.84% share of profit before tax.