Kansai Nerolac bets on industrial paints—but is that enough?

₹195.55 during Friday’s trading session. The decline reflects persistent weak growth: the company’s year-on-year revenue expansion has remained below 5% for eight consecutive quarters, and the absence of clear near-term triggers is weighing on investor sentiment.There is little immediate evidence of a sharp turnaround.

Kansai Paint, the company’s Japanese parent, recently outlined strategy for its Indian subsidiary, reiterating a sharper focus on industrial and automotive coatings – segments that contribute about 55% of revenue and are expected to drive medium-term growth. Decorative paints, by contrast, are seen recovering only gradually.Automotive coatings have long been Kansai Nerolac’s core strength.

Over the last five years, its auto paints business has grown at about 8.3% CAGR with market share growing from 56% to more than 61%. Post-covid, they have gained share in their already strong segments, which shows competitive strength.Powder coatings have grown 40% in the last three years, general industrial and high-performance coatings over 50%, and auto refinish about 70%.

They are also entering premium segments like EV coatings, railway coatings, alloy wheels and heat-resistant coatings using Japanese technology and global acquisitions.The industrial coatings business, however, is inherently business-to-business (B2B). Relationships with large automobile manufacturers are generally sticky, offering stability.

On the flipside, industrial business margin is lower than decorative margin, impacting overall outlook.“We expect little scope to increase margins as lower margin industrial paints have better growth prospects and decorative outlook is uncertain in near term,” said a report by PL Capital on 26 February. The