Crown Paints Surges as Top Weekly Gainer at NSE, Riding on Strong Turnaround and Investor Confidence

Crown Paints Kenya Plc, a household name in East Africa’s building and decorative paints sector, emerged as the top price gainer at the Nairobi Securities Exchange (NSE) last week. The company’s stock climbed 15.4% to close at KSh 57.00, capping a remarkable run that reflects a robust financial turnaround and renewed investor appetite for consumer and construction-linked counters.

The company, best known for its flagship Dura Coat brand, has demonstrated resilience by swinging from a loss-making position in 2023 to record net earnings of KSh 543.7 million in 2024, a sharp recovery from a KSh 29.1 million loss the previous year.

With a current market capitalization of KSh 8.11 billion, Crown Paints has been on the radar of both retail and institutional investors who are betting on Kenya’s resurgent construction sector and the firm’s diversified product portfolio.

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A Remarkable Recovery

The sharp turnaround in Crown Paints’ performance underscores the benefits of cost control, strategic expansion, and demand growth in Kenya’s paints and coatings market. Analysts at Genghis Capital noted that Crown’s improved profitability reflects a rebound in the construction industry, boosted by both public infrastructure projects and private real estate developments.

The company’s earnings per share (EPS) now stand at KSh 6.36, with a price-to-earnings (P/E) ratio of 8.96 and a dividend yield of 5.26%, metrics that compare favorably with peers in the consumer goods segment of the NSE.

Shareholding Structure

Crown Paints’ shareholder base is dominated by Crown Paints and Building Products Ltd, which holds 48.42% (68.9 million shares). Other significant investors include:

• Beaumont Properties Limited – 22.42%
  
• Patel Mahendra Dahyabhai – 0.47%
  
• Ogango John Okuna – 0.37%
  
• Shah Minesh Mulchand – 0.34%
  
• Zaverchand Punja Warehouses Ltd – 0.30%
  
• A wide mix of individual shareholders, each holding between 0.05% and 0.16%.
  

This diverse shareholder mix reflects strong institutional anchoring but also widespread retail participation, which has historically given the counter significant liquidity.

Investor Sentiment and Market Context

The bullish rally in Crown Paints comes at a time when NSE activity has been on the upswing. Last week, total market turnover rose to US$ 42.6 million, with KCB Group leading as the top mover with a 6% gain to KSh 57.00 and a turnover of US$ 23.1 million. Other active counters included Safaricom (US$ 4.9m), Standard Chartered Bank Kenya (US$ 4.7m), Equity Group (US$ 1.9m), and Diamond Trust Bank (US$ 1.1m).

Against this backdrop, Crown Paints’ 15.4% jump stands out, suggesting that investors are rotating into consumer and construction-linked plays after months of dominance by financial and telecom stocks.

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Drivers of Growth

Several factors explain Crown Paints’ resurgence:

1. Construction Boom – With Nairobi, Ruiru, and satellite towns experiencing a surge in real estate developments such as Northlands City and Brookview Membley, demand for paints and coatings has risen sharply.
   
2. Product Innovation – Crown has continued to expand its product range, particularly through its Dura Coat line, which targets middle- and high-income consumers.
   
3. Regional Expansion – Beyond Kenya, Crown has strengthened its footprint in Uganda and Tanzania, diversifying revenue sources.
   
4. Cost Control Measures – The company has implemented efficiency improvements in raw material procurement and distribution, helping protect margins.
   
5. Investor Confidence – With improved governance and dividend payouts, Crown has gained credibility among both retail and institutional investors.
   

Sectoral Outlook

Kenya’s paints and coatings industry is projected to grow at a compound annual growth rate (CAGR) of around 6–7% over the next five years, according to research by Mordor Intelligence. Growth is being fueled by:

• Urbanization – With over 30% of Kenyans now living in cities, housing demand continues to drive construction.
  
• Government Projects – The Affordable Housing Program and ongoing infrastructure upgrades are major consumption drivers.
  
• Rising Middle Class – Increased disposable incomes are boosting demand for premium decorative paints.
  
• Export Opportunities – Regional markets in East Africa present opportunities for Kenyan manufacturers.
  

This sectoral momentum suggests that companies like Crown Paints are well-positioned to benefit from both local and regional demand.

Risks and Challenges

Despite strong momentum, Crown Paints faces risks common to the sector:

• Currency Volatility – The Kenya shilling’s depreciation against the US dollar raises import costs for raw materials.
  
• Competition – Rivals such as Basco Paints (Duracoat competitor) and Sadolin remain formidable players.
  
• Regulatory Pressure – New environmental regulations on chemical use and packaging could increase compliance costs.
  
• Economic Headwinds – Slower credit growth and higher consumer prices could dampen construction activity.
  

Still, investors appear confident that the company’s fundamentals outweigh these risks, at least in the short to medium term.

The Bigger Picture: NSE in 2025

The NSE itself has enjoyed renewed vibrancy in 2025, with year-to-date gains of over 40% on NASI and NSE 20 indices, supported by strong banking and telecom earnings. The launch of new products such as the Banking Sector Index and continued push for derivatives trading have also enhanced market depth.

In this environment, mid-cap counters like Crown Paints are benefiting from spillover investor interest, as traders diversify portfolios beyond large caps.

Conclusion

Crown Paints’ surge as the top weekly gainer at the NSE is more than just a market statistic — it is a reflection of the company’s turnaround story, Kenya’s resilient construction sector, and the renewed energy at the stock exchange.

From loss-making in 2023 to half a billion shillings in profit by 2024, Crown has reestablished itself as a formidable counter in the consumer and construction segment. Its steady dividend yield, expanding market footprint, and investor confidence suggest the company could remain on the radar of bullish investors in the months ahead.

As Crown Paints rides on this momentum, the key question for stakeholders will be whether the company can sustain growth amid regional competition and macroeconomic headwinds. For now, however, it stands as a case study in corporate recovery and market resilience at the NSE.

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Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

2nd October, 2025