Berger Q1 net profit jumps 29% as decorative paints drive growth

MUMBAI – Berger Paints India saw a near 29% growth in its consolidated net profit in the June quarter aided by its decorative paints business posting its highest growth in 12 quarters. Demand remained strong in the automotive segment as well, the company said.

The Kolkata-based paint-maker reported volume growth in high single digits at a standalone level, while value growth was higher at 12.7%. “The value growth outpaced volume growth on the back of the price increases with the full benefit to accrue going forward,” managing director Abhijit Roy said.

Consolidated net profit for the quarter rose to Rs 405 crore from Rs 315 crore a year ago, while revenue from operations was 12% higher at Rs 3,583.8 crore. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) rose 15% year-on-year to Rs 607.4 crore.


“It was a positive start to the new year in spite of the unsettled environment resulting from the conflict in West Asia which led to disruptions in the availability and prices of crude and impacted crude based raw materials,” Roy said. “This inflation in crude-based materials led to some moderation in our gross margins,” he said.

While gross margins fell to 39.3% from 40.1% a year ago, operating margins remained steady at 17.4%, unchanged from a year ago.

The double-digit growth in revenue seen this quarter is likely to sustain, supported by the full-quarter impact of price increases in the current quarter, festive demand and distribution expansion, the company said in its investor presentation. It also said that operating margins would remain within its guided range.

While the strong performance seen in the automotive segment following GST cuts and lower financing costs continued in the June quarter, the industrial segment was able to only partially realize gains from price hikes, which were implemented at the end of the quarter.

“These gains will register fully in the second quarter which will likely bump up profitability and revenue growths for the company,” Roy said.

Berger Paints announced its earnings during market hours on Wednesday, and its shares closed at 545.45 rupees on the BSE, up 2.2% from the previous close.