Kansai Paints Co. Ltd., our parent company is the number one paint company in Japan.It is a global leader in innovation and is known best for its product innovation, R&D and sensitivity towards the environment, Kansai commands a leadership position in providing state-of-the-art solutions in décor and in industrial applications in South East Asia, also parts of Africa, Europe and America.
The company’s net sales has increased to Rs 6655.90 million for the third quarter ended December 31, 2011, compared to Rs 5603.80 million for the same period previous fiscal, up by about 19%. Operating profit surged up to Rs.806 million from the same quarter previous year of Rs.687.50 million; a hike of 17.24%; while on a sequential basis it has seen a fall. The company�s performance has been impacted by high input costs and a slowdown in volume growth due to a slump in the auto industry. Net profit surged about 27% y-o-y to stay at Rs.526.80 million from Rs.415.90 million clocked in a year ago quarter.
With increased focus on expanding capacities while maintaining its leadership position in industrial paints segment and growth in line with industry standards; KNPL�s future prospects looks promising. We believe KNPL is trading at an attractive valuation at 21.33x and 18.18x of FY12EPS of Rs.41.72 and FY13EPS of Rs.48.95.
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