Kansai Nerolac's operating profit rose, but net profit fell 2.13% YoY
Standalone margin improved year on year but slipped sequentially, while higher tax and lower other income offset the operating gain.
Filed 13 Jul 2026, 17:05 IST · after market close · Kansai Nerolac Paints Ltd (KANSAINER)
Key takeaways
- Standalone operating profit rose 20.98% year on year as revenue grew 7.64% and expenses grew 6.13%.
- Sequential operating margin fell 1.48 percentage points to 11.48% because revenue declined 1.78% while expenses fell only 0.11%.
- Net profit declined 2.13% year on year to Rs 120.86 cr despite the operating improvement, as the tax rate rose 3.76 percentage points and other income fell 54.36%.
Price around the results
Operating gains did not reach net profit
Kansai Nerolac reported standalone revenue of Rs 1,873.44 cr in Q4FY26, up 7.64% year on year, with operating profit growing 20.98%. The operating gain was offset below the operating line: other income fell 54.36%, interest rose 44.14% and depreciation increased 18.76%. Net profit therefore declined 2.13% to Rs 120.86 cr.
Sequential margin loss reflects weaker operating leverage
Revenue fell 1.78% sequentially, while expenses declined only 0.11%, causing operating margin to narrow 1.48 percentage points. The tax rate also rose 3.36 percentage points sequentially. Other income contributed 10.66% of profit before tax, making reported profit more dependent on non-operating income than operating profit alone suggests.
Margin remains below the Consumer Discretionary median
Year on year, costs grew slower than revenue, lifting operating margin by 1.26 percentage points to 11.48%. The quarterly path has been uneven: margin moved from 14.95% in Q1FY26 to 11.32% in Q2FY26, 12.96% in Q3FY26 and 11.48% in Q4FY26. The latest margin was 3.33 percentage points below the 14.81% median for 93 Consumer Discretionary peers that had reported.
The post-results move was larger than Kansai Nerolac's usual reaction
The stock rose 5.02% on the reaction day and 10.20% over five sessions, with volume at 23.87 times its usual level. Across the last eight results reactions, moves were split evenly between four rises and four falls, while the median absolute move was 2.08%, making this response unusually large for the stock.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,873 cr | ₹1,907 cr | -1.78% | +7.64% |
| Other income | ₹18 cr | ₹-8 cr | — | -54.36% |
| Expenses | ₹1,658 cr | ₹1,660 cr | -0.11% | +6.13% |
| Operating profit | ₹215 cr | ₹247 cr | -13.01% | +20.98% |
| Operating margin (%) | 11.48% | 12.96% | — | — |
| Interest | ₹5 cr | ₹6 cr | -8.32% | +44.14% |
| Depreciation | ₹59 cr | ₹59 cr | +0.92% | +18.76% |
| Profit before tax | ₹169 cr | ₹175 cr | -3.57% | +3.00% |
| Tax | ₹48 cr | ₹44 cr | +9.36% | +18.72% |
| Net profit | ₹121 cr | ₹131 cr | -7.88% | -2.13% |
| EPS (₹) | ₹1.62 | ₹1.62 | +0.00% | +5.88% |
Operating margin of 11.48% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +5.02% | +5.04% |
| Next session | +9.39% | — |
| 5 sessions | +10.20% | +12.83% |
| 15 sessions | +8.26% | — |
| 30 sessions | +4.82% | — |
Volume on the results session was 23.87× its 20-day average.
What to watch
- Whether standalone operating margin recovers from 11.48% after the sequential 1.48 percentage-point decline.
- Whether revenue growth stays ahead of the 6.13% year-on-year expense growth rate.
- Whether the tax rate moves back from 28.38% and other income remains below 10.66% of profit before tax.