Kansai Paint Maps India Growth: Nerolac Eyes Business Transformation

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AuthorSatyam Jha|Published at:
Kansai Paint Maps India Growth: Nerolac Eyes Business Transformation
Overview

Kansai Paint Co., Ltd. briefed Kansai Nerolac Paints on an India strategy focused on business transformation. The plan emphasizes leveraging global assets, optimizing portfolios, and enhancing operational efficiency to strengthen positions in Auto, Industrial, and Decorative segments amidst projected 7-8% GDP growth for India.

Kansai Paint Charts Ambitious India Future for Nerolac with Business Transformation Drive

India's GDP is projected to grow by ~7-8% in 2025, while Kansai Nerolac has boosted its Auto market share to 61.0% in FY2024.
Reader Takeaway: Global asset leverage for growth; economic headwinds pose market challenge.

What just happened (today’s filing)

Kansai Paint Co., Ltd. of Japan hosted an India strategy briefing for its subsidiary, Kansai Nerolac Paints Ltd., on February 26, 2026. The focus is on a 'business transformation' aimed at balancing stability, growth, and innovation.

The strategy involves actively leveraging global assets and collaborations, optimizing portfolios, and enhancing operational efficiency. Key initiatives include structural reforms for Nerofix to accelerate growth.

Why this matters

This directive from its Japanese parent signals a strategic push to fortify Kansai Nerolac's market positions in India's key Auto, Industrial, and Decorative paint segments. It aims to harness global expertise for local advantage, navigating India's robust economic growth projections.

The backstory (grounded)

Kansai Nerolac, formerly Goodlass Nerolac Paints, became a subsidiary of Japan's Kansai Paint in 2000, a relationship that provides technical and financial backing. The company has historically focused on industrial and automotive coatings, holding a leadership position in these areas.

In recent years, Kansai Nerolac has diversified, entering niche segments like high-end wood finishes, construction chemicals (acquiring Perma Construction Aid Pvt. Ltd.), and auto refinish. It also formed a joint venture, Nerofix, for adhesives and construction chemicals with Polygel in 2019. The company has also invested in capacity expansion, including a significant investment of around ₹1100 crore to increase manufacturing capacity.

Over the past decade, it has strategically increased its decorative paint mix to 55% of its total revenue, aiming to capture more share in this lucrative segment.

What changes now

Shareholders can anticipate a sharpened focus on efficiency and strategic growth. The transformation plan aims to drive profitability through optimized operations and better utilization of global resources.

Key areas to watch include market share gains in the Auto segment, where it already holds a strong position, and expansion in the Decorative and Industrial segments. Efforts to reduce the Cash Conversion Cycle target to 82 days by December 2025 suggest a drive for working capital efficiency.

Risks to watch

While the strategy emphasizes growth, potential risks include general economic conditions, foreign exchange fluctuations, and competitive product/pricing pressures as highlighted in the briefing. [cite:input]

Additionally, the company has faced recent tax penalties, including ₹80.29 lakh for ITC disallowance (FY21-22), ₹16.50 lakh (FY18-19), and ₹48.02 lakh (FY18-19) in different states.

Kansai Nerolac also reported a significant 75% year-on-year net profit drop to ₹131.20 crore in Q3 FY26 due to exceptional costs, though operational performance remained stable. The stock has seen underperformance and a downgrade by MarketsMOJO to 'Sell' as of February 2026.

Peer comparison

Kansai Nerolac competes in a highly consolidated market dominated by players like Asian Paints and Berger Paints. Asian Paints, India's largest paint firm, is substantially larger and has expanded into home decor. Berger Paints, the second-largest player, is aggressively expanding its distribution network, particularly in South India, and targets a Rs 20,000 crore turnover by 2030. While Kansai Nerolac leads in industrial and automotive coatings, its profit growth and ROE have historically trailed these peers.

Context metrics (time-bound)

  • India GDP Growth Projection: ~7-8% in 2025.
  • Kansai Nerolac Auto Market Share increased to 61.0% in FY2024 from 58.1% in FY2022.
  • The company added over 3,500 dealers in the Decorative Segment YTD.
  • Targeting a reduction in Cash Conversion Cycle to 82 days by December 2025 from 94 days in December 2024.
  • Decorative Segment growth in Projects estimated at 10%+ YTD, and Construction Chemicals at 15%+ YTD.

What to track next


  • Execution progress of the business transformation initiatives across all segments.

  • Sustained market share gains, particularly in the Auto segment.

  • Efficiency improvements, including the targeted reduction in the Cash Conversion Cycle.

  • Success in strengthening positions within the Industrial and Decorative segments.

  • Company's ability to navigate economic headwinds and competitive pressures.

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