Shares of Kansai Nerolac Paints Ltd. gained as much as 4 percent on Monday after the company sold its land parcel in Thane to the Hiranandani Group for a total consideration of Rs 671 crore.

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On Friday, Kansai Nerolac entered into a deed of conveyance for the sale of a total area of 97,090 square metres together with the transfer of rights in land admeasuring 6,300 square metres at Kavesar, Thane, to Shoden Developers Pvt. Ltd, a group company of the House of Hiranandani.

Initially in January, the company’s board of directors had approved the proposal for sale of company’s land at Thane admeasuring 96,180 square metres at Rs 655 crore to Shoden Developers. However, in its meeting on Friday, the board approved the aforesaid sale transaction including the sale of additional area admeasuring 910 square metres, thus aggregating to a total area of 97,090 square metres.

The company’s market capitalisation currently stands at around Rs 25,000 crore, while the stock trades at 26 times financial year 2025 estimates earnings.

Analysts believe that Kansai Nerolac could benefit from the move to increase its capacity of 600 million litres by another 1.54 lakh kilolitres per year through capital expenditure of Rs 316 crore.

Moreover, lower raw material prices and improving demand in the auto sector could prove to be additional boosters for the company.

However, experts are also cautious of the changing dynamics in the paint industry as entry of some large new players like Grasim, Astral, Pidilite, and JK Cement is making the segment highly competitive.

Shares of Kansai Nerolac are trading 3 percent higher at Rs 463.80.