Berger Paints to hike prices as rising raw material costs squeeze margins

Berger Paints India announced on Thursday that it plans to implement cost-efficiency measures and raise prices in November to safeguard its margins against foreign exchange volatility and rising raw material expenses.

Although a steep increase in raw material costs during the quarter hindered operating profit growth, the paint manufacturer still achieved a 5.2% rise in second-quarter profit, driven by robust volumes in its international, construction chemical, and industrial divisions.

Also read: Asian Paints says Middle East sales held strong even as 'full impact' of cost inflation was felt in Q2


Key details include:

• Consolidated net profit for the quarter ended September 30 climbed to 2.17 billion rupees ($22.96 million), up from 2.06 billion rupees during the same period last year.
• Revenue from operations grew 13.2% year-on-year, reaching 32 billion rupees.
• Expenses surged 14.1%, outstripping revenue growth, driven by a 25.6% jump in raw material costs.
• Near-term margin risks are expected to persist due to forex volatility, geopolitical uncertainty, and disruptions in raw material pricing and supply, according to the company.

Paint manufacturers continue to deal with unpredictable prices for crude-linked raw materials, which serve as a critical input for production.

Despite implementing significant price increases, Berger's industrial segment recorded high double-digit volume growth, though its margins continued to face downward pressure.