Target: ₹3,200
CMP: ₹2,889.30
We like Akzo Nobel India’s (to be renamed as JSW Dulux Ltd) strategy to increase investments in strengthening brand building and trade relationships. It has invested the savings from reduction in royalty in price cuts, additional spends to strengthen relations with trade as well as corporates and multiple new product launches.
We note its domestic decorative volume growth (LFL) was 8 per cent yoy in Q3-FY26. While there was impact on volumes in H1FY26 due to trade disruption post transition in ownership/management, we note the company has managed to recover in Q3 and reported strong volume growth. We model it to be more aggressive now on driving revenue growth/market share. There could be realization of synergy benefits over FY27-28E of about 2-3 per cent of net sales, and we model partial re-investment of savings in brand building, trade spends and distribution. We remain constructive.
We model Akzo to report revenue and PAT CAGRs of 2.1 per cent and 4.1 per cent, respectively, over FY25–28E. There is potential for stronger revenue growth as the company may re-invest synergy benefits in driving volume growth. We maintain Add with a DCF-based revised target price of ₹3,200 (₹3,500 previously); implied target P/E of 30x FY28E).
Key risks: Higher-than-expected competitive pressures and steep inflation in commodity prices
Published on February 4, 2026