Berger Paints Q2 profit lags revenue growth on higher costs

MUMBAI – Berger Paints India saw a little over a 5% year-on-year growth in its consolidated net profit for the September quarter to Rs 217.1 crores, while consolidated revenue from operations rose 13.2% to Rs 3,200.4 crore. Profit growth lagged revenue as raw material costs and higher ad spends squeezed margins.

As a result, consolidated earnings before interest, tax, depreciation and amortization rose 5.2% to Rs 370.7 crore, while consolidated gross margins for the quarter stood at 39.3%.

“Operating profit growth was impacted by the sharp rise in raw material costs, the full impact of which was felt in this quarter,” managing director Abhijit Roy said. “We successfully launched our new corporate campaign.


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"Rang Bona Rahe" which resulted in increased advertisement spends for the quarter,” he said.

Berger Paints has taken continued price hikes in a staggered form to counter the sustained raw material inflation, the company said in a statement.

“With no sign of easing of the inflationary trend of raw materials, we will implement further rounds of price increases in November and beyond as and when required, in addition to implementing cost efficiency initiatives to ensure stability of our profit margins,” Roy said.

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Berger Paints announced its earnings during market hours on Thursday, and its shares closed at 506.80 rupees on the BSE, up 4.5% from the previous close.