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    Kansai Nerolac shares plunge 8% after global brokerages cut target price

    Synopsis

    Kansai Nerolac Paints on Monday posted a 15.65 per cent fall in its net profit .

    GettyImages-517994299Getty Images
    Deutsche Bank Research also cut the target price to Rs 525 from Rs 575 earlier. However, it maintained ‘Buy’ rating on the shares of Kansai Nerolac.
    Shares of Kansai Nerolac plunged 8 per cent in early trade on Tuesday after global brokerage firms downgraded the stock following lower than expected financial results for the quarter ended September 2018.

    CLSA downgraded Kansai Nerolac to ‘Underperform’ from ‘Outperform’ and also slashed the target price to Rs 400 from Rs 550 earlier. “Q2FY19 results slightly below estimates. We expect margin pressure and subdued growth for industrial segment,” CLSA said. The brokerage firm also cut EPS estimates by 13-17 per cent on lower growth/ margin forecasts.

    Kansai Nerolac Paints on Monday posted a 15.65 per cent fall in its net profit at Rs 121.99 crore for the quarter ended September 30.

    It had posted a net profit of Rs 144.63 crore in the corresponding quarter last fiscal.

    However, its gross sales for the quarter under review grew by 9.86 per cent to Rs 1,414.87 crore from Rs 1,287.89 crore in the same quarter last year, the company said in a statement.

    Deutsche Bank Research also cut the target price to Rs 525 from Rs 575 earlier. However, it maintained ‘Buy’ rating on the shares of Kansai Nerolac.

    “Q2 results remained below estimates on all counts. We expect margins to improve on price hikes. Volume growth to sustain on aggressive growth strategies and festive sales,” Deutsche Bank said.

    The scrip was trading nearly 8 per cent down at Rs 359 at around 9.40 am (IST), while the BSE Sensex was down 269 points, or 0.79 per cent, at 33864.95 at around the same time.
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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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