Kansai nerolac paints Limited announced its unaudited financial results for the third quarter ended December 31, 2025, following a Board meeting held on February 3, 2026. The company reported revenue growth of 3.5% year-on-year, though profitability was impacted by exceptional charges related to new labour legislation and margin compression.

Financial Performance Overview

The company's standalone financial performance for Q3 FY26 demonstrated resilience in revenue generation despite market headwinds:

The EBITDA showed marginal growth at ₹247.28 crores year-on-year, but the EBITDA margin compressed to 13.00% from 13.46% in the corresponding quarter last year. The significant decline in net profit was primarily attributed to an exceptional charge of ₹44.72 crores related to the implementation of new Labour Codes by the Government of India.

Nine-Month Performance Analysis

For the nine months ended December 31, 2025, the company maintained steady revenue growth while facing margin pressures:

Segment Performance and Market Dynamics

Managing Director Pravin Chaudhari highlighted the contrasting performance across business segments. Industrial coatings registered strong growth during the quarter, primarily driven by the automotive sector. The positive impact of GST rate cuts implemented in late September contributed to improved demand across various Original Equipment Manufacturer (OEM) categories.

However, the decorative paints segment faced challenging conditions with subdued overall demand, compounded by a shorter festival season. Despite these headwinds, the company's internal initiatives helped achieve good growth in specific areas including Projects, Distribution, waterproofing, and Construction Chemicals.

Exceptional Items Impact

The company recorded an exceptional charge of ₹44.72 crores in Q3 FY26 due to the implementation of four Labour Codes notified by the Government of India on November 21, 2025. These codes consolidate 29 existing labour laws and resulted in increased gratuity and leave liability. The company assessed the financial implications based on legal opinion and guidance from the Institute of Chartered Accountants of India.

Market Outlook and Future Prospects

The domestic paint industry is estimated at approximately ₹77,500 crores as of March 2025. Growth momentum is expected to continue in Automotive and Performance Coatings segments, while recovery in Decorative paints is anticipated to be gradual. The company remains optimistic about long-term demand driven by infrastructure development, core sector growth, and expansion in automobile and real estate sectors.

Raw material prices remained stable during the quarter, though the period witnessed significant volatility in foreign exchange rates and geopolitical uncertainty, which could impact future operations.

Kansai Nerolac Paints Limited has completed the allotment of 3,771 equity shares under its Restricted Stock Units Plan 2022, as disclosed to stock exchanges on 29th January, 2026. The allotment represents the exercise of stock units granted to employees under the company's employee benefit scheme.

Share Allotment Details

The Board of Directors approved the allotment of equity shares with specific parameters outlined in the regulatory disclosure:

Updated Share Capital Structure

Following the allotment, Kansai Nerolac Paints Limited's share capital structure has been updated:

Regulatory Compliance

The allotment was conducted in compliance with multiple regulatory frameworks. The disclosure was made pursuant to Regulation 30 of SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, and Regulation 10(c) of SEBI Share Based Employee Benefits and Sweat Equity Regulations, 2021.

The RSU Plan 2022 had received in-principle approvals from both stock exchanges. BSE Limited granted approvals under reference numbers DCS/IPO/TL/ESOP-IP/2556/2022-23 dated 14th November, 2022 and DCS/IPO/TL/ESOP-IP/3044/2023-24 dated 25th January, 2024. National Stock Exchange provided approvals under NSE/LIST/33185 dated 15th November, 2022 and NSE/LIST/39196 dated 25th January, 2024.

Share Characteristics

The newly allotted shares are identical in all respects to existing equity shares of the company. No lock-in provisions apply to these shares, and no premium was charged beyond the exercise price of Re. 1 per share. The shares are issued in dematerialized form under ISIN INE531A01024 and are eligible for trading on both BSE Limited and National Stock Exchange of India Limited.