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On Friday, Elara Securities India adjusted its stance on Kansai Nerolac Paints (NSE:KANE) Limited (KNPL:IN), upgrading the stock from a "Reduce" rating to "Accumulate" and increasing the price target to INR 285.00 from the previous INR 272.00.
Elara Securities made this decision noting that despite Kansai Nerolac’s sales growth being subdued, the stock’s recent correction of approximately 9% over the past six months presents a reasonable upside. This is further bolstered by the stock’s attractive valuation. The new price target is based on a 30x FY27 P/E multiple.
The analyst at Elara Securities commented on the upgrade, stating that while they recognize the growth in sales is not yet compelling, the current valuation of the stock provides an opportunity for accumulation. They expressed a cautious optimism, suggesting that while the stock now holds potential for investors, they are on the lookout for stronger positive catalysts before recommending Kansai Nerolac as a top selection in the paints sector.
The upgrade reflects a shift in Elara Securities’ outlook on Kansai Nerolac, indicating a belief in the potential for the stock’s performance to improve. However, the firm also indicated that they are waiting for more significant positive developments before fully endorsing the stock as a leading choice within its industry.
Investors may view this upgrade as a sign of changing market conditions or perceptions regarding Kansai Nerolac, potentially influencing their investment decisions. It is important to note that while the rating has been upgraded, Elara Securities maintains a cautious approach, looking forward to more robust catalysts in the future.
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