Tag: Berger Paints

Berger Paints MD: Margin will remain in 15-17% range, rural areas driving demand

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Berger Paints India reported its financial numbers for the quarter ended March 2024 on Wednesday, May 15. The company reported a 19.5% year-on-year rise in consolidated net profit at ₹222.6 crore against ₹185.7 crore in the year-ago period. Berger Paint’s consolidated revenue from operations rose 3.1% to ₹2,520.3 crore, up from ₹2,443.6 crore in the March 2023 quarter.

In a conversation with CNBC-TV18, Abhijit Roy, MD & CEO, Berger Paints highlighted that there has been an improvement in the demand in the rural areas, in tier-3, 4, and upcountry towns. “As we see it today this demand is likely to continue. So in the first half, I think we should see sustainable volume growth happening.”

Consolidated earnings before interest, tax, depreciation, and amortisation or EBITDA fell 4.8% to ₹361.1 crore during the quarter under review, while the consolidated EBITDA margin stood at 14%. The board also recommended a dividend of ₹3.50 per equity share.

Also Read: Info Edge Q4 Results: Board recommends a dividend of ₹12 per share

The company has gained overall market share in the previous year. “Our objective is for the last two years, we have gained about 0.7-0.8% and that’s something which we will continue to do, hopefully this year as well,” Roy said.

Roy asserted that the margin will hover in the 15-17% range. “We have always said that the margin will hover between 15-17% and that’s where we will remain,” he said.

The stock ended 1.2% higher on Thursday, May 16. The share has fallen 18.7% in 2024 so far.

Also Read: Akzo Nobel announces final dividend of ₹25 as Q4 net profit rises 14%

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Not simple for new players to win market share in paints industry, says Akzo Nobel India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Rajiv Rajgopal, CMD of Akzo Nobel India, makers of Dulux paints, believes that it isn’t a simple task for a new player to win market share in the paint industry as this industry is a consolidated and disciplined industry.

This comment came on the back of Grasim’s launch of its much-awaited paints business, Birla Opus.

Grasim launched its paints business in February with the commissioning of the Panipat, Ludhiana and Cheyyar plants. The fourth plant will begin in the first quarter of financial year 2025, fifth in the second quarter and the sixth plant will launch in the fourth quarter of the next financial year.

Aditya Birla Group Chairman Kumar Mangalam Birla said that the group’s company Grasim’s paints business will turn profitable in the third year of operations and will cross the topline figure of ₹10,000 crore.

Akzo Nobel, a Dutch multinational corporation renowned for its paints and performance coatings, has a significant presence in over 150 countries, with headquarter in Amsterdam. Despite its global reach, Rajgopal highlighted the intricacies of penetrating the Indian paint market, where the company holds a 5% market share in decorative paints.

Akzo Nobel stands as a market leader in 56-60 districts across India.

However, Rajgopal mentioned that the journey of building distribution channels, brand recognition, and expanding production capacity has been an easy one.

Despite the challenges, Akzo Nobel maintains 16-17% market share in premium paint products.

Amit Sachdeva, Head of India Equity Strategy at HSBC thinks long-lasting price battles are unlikely in the paint business as there is little room for that.

Brokerage firm Investec has a pessimistic view of paint companies. They argue that Grasim’s entry into the paint market, particularly with the launch of their eagerly awaited brand, Birla Opus, might disturb the established pricing norms.

In an interaction with CNBC-TV18 on March 27, Berger Paints Managing Director and CEO Abhijit Roy mentioned that in an industry like the paints industry, incremental steps have to be taken and growth doesn’t come in a burst unless the existing players make some mistakes.

At present, Akzo Nobel’s market capitalisation stands at ₹10,857.27 crore.

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‘Highly improbable’ that Birla Opus will hit the targets set, says Berger Paints MD & CEO

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The targets set by a new entrant in the Paints sector is “highly improbable” to achieve, according to Berger Paints Managing Director & CEO Abhijit Roy, who said this in an interaction with CNBC-TV18 on Wednesday.

Roy mentioned that in an industry like the paints industry, incremental steps have to be taken and growth doesn’t come in a burst unless the existing players make some mistakes.

“In my opinion, therefore, it will be a slow grinding process, it will not be as fast as possibly anticipated. It might be lesser than what the projections have been given. I don’t think it is impossible to achieve those targets, but it is highly improbable that the targets will be hit,” Roy said.

Roy did not name competition but recently, the Aditya Birla Group forayed into the paints segment with the launch of “Birla Opus.” It has set targets of ₹10,000 crore revenue and achieving profitability in the next three years.

Birla Opus is also offering dealer discounts, in addition to its limited-period promotional offer of a 10% volume discount across all water-based paint products.

The MD & CEO of Berger Paints said that pricing does not necessarily impact consumer sentiment. “The problem is that the customers want the best quality product. They don’t want a 5-10% price off in terms of pricing. They are interested in getting a good quality product, apply it properly and available at the right place,” he said.

However, he mentioned that that Birla Opus’ effort is a scale different from all other new entrants in the past.

Roy further added that the company will not engage in the game of price cuts. “I don’t see us reacting in that manner,” he said, adding that the company will act as and when required.

Explaining the dynamics of the industry, Roy highlighted the example of four cities in Uttar Pradesh that are very close to each other – Ayodhya, Lucknow, Kanpur and Allahabad. Berger is the leader in two of these cities, while Asian Paints leads in the other two. In both cases, both Berger and industry leader Asian Paints have a 40% to 50% market share.

“Asian Paints do not lack product quality or advertisement muscle power or for that matter knowledge of the paint industry and have excellent quality people all around,” said Roy and further added that changes in the paints industry are slow and incremental. “It is not like you bomb and you flatten the surface and then you become the leader suddenly. It is one-on-one fight at every place, which is time taking and that’s why we are of course cautious, but we’re not worried (about rising competition),” Roy said.

The Berger Paints MD & CEO also does not see industry wide margins being impacted and that the company will continue to operate in the 15% to 18% margin band, something that they have

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Asian Paints targets ₹1 lakh crore revenue over the next decade with product expansion

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mumbai-based Asian Paints aims to become a ₹1 lakh crore revenue company in the next decade, said MD and CEO Amit Syngle. In an exclusive conversation with CNBC-TV18, Syngle spoke about growth outlook and opportunities for the company.

Syngle said the strategy is to offer almost everything that goes into a home. “We’ve got into lighting, we’ve got into UPVC (unplasticized polyvinyl chloride) doors and windows, we’ve got into wooden flooring, kitchen and bath is already with us. We’ve gotten to fabrics and furnishings. And, therefore, as we go ahead, we are always on the lookout in terms of saying that is there something which really synergizes in terms of our strategy in terms of making it big to that extent,” he said.

The goal is to increase the mind share of the brand and look at influencing not just the bottom of the pyramid but even the luxury space, which has immense growth potential with rising disposable incomes, he noted.

Syngle’s plan is to keep the margin within the 18-20% band and invest the rest in brand building.

He identified services as a key area where most paint companies currently lag, and Asian Paints’ plan to become an outlier in that space. Services involves providing end-to-end painting solutions with expert consultations. “Our endeavour is that the service brand should become 10% of the overall revenue of Asian paints as we go ahead.”

Also Read | Asian Paints shares may not rise more from current levels, say analysts as competition rises

Within the paints business, the industrial paints category is expected to grow to 7-8% of the business from 4-5% now.

The company is also focusing on backward integration for growth and 12% of the total revenues currently come from new and innovative products.

Asian Paints holds the top position in India’s paint industry in terms of market share. It serves as the parent company for Berger International. The company’s manufacturing footprint spans across 15 countries globally, with significant operations in India, the Indian subcontinent, and the Middle East.

For the December quarter, Q3FY24, Asian Paints reported domestic volume growth of 12% compared to the same quarter last year. The company said that growth was supported by an extended festive season, although there was some moderation in demand for the latter part of the quarter.

Also Read | Asian Paints CEO says doubtful if competition could even get Rs 5,000 crore sales in three years

For the quarter, Asian Paints reported a net profit of ₹1,475 crore, compared to a CNBC-TV18 poll of ₹1,410 crore. On a year-on-year basis, the net profit was up by 34.5%.

Revenue for the period stood at ₹9,104 crore, which was marginally lower than the CNBC-TV18 poll of ₹9,285 crore. Asian Paints reported a 5.4% topline growth during the quarter compared to the same period last year.

Over the past year, Asian Paints’ shares have surged by over 4% and have a market capitalisation of ₹2,81,438.22 crore.

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Berger Paints Q3 Results | Profit soars 49% on volume growth; tier 2 & 3 cities lead demand

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Berger Paints India Ltd on Tuesday (February 6) reported a 49.2% year-on-year (YoY) jump in consolidated net profit at ₹300.2 crore for the third quarter that ended December 31, 2023, on volume growth and robust increase in operating profits.

In the corresponding quarter last year, Berger Paints India posted a net profit of ₹201.2 crore, the company said in a regulatory filing. The company’s consolidated revenue from operations increased 7% to ₹2,881.8 crore against ₹2,693.6 crore in the corresponding period of the preceding fiscal.

At the operating level, consolidated EBITDA jumped 37.2% to ₹480 crore in the third quarter of this fiscal over ₹349.8 crore in the corresponding period in the previous fiscal.

The consolidated EBITDA margin stood at 16.7% in the reporting quarter against 13% in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation.

Standalone numbers

Regarding standalone figures, revenue from operations for the quarter ended December 31, 2023, was ₹2,574.20 crore against ₹2,418.91 crore in the corresponding quarter of the last year, representing an increase of 6.4%.

Also, EBITDA (excluding other income) for the quarter ended December 31, 2023, was ₹429.58 crore against ₹311.30 crore in the year-ago period, representing an increase of 38.0%.

Net profit for the quarter that ended December 31, 2023, was ₹263.25 crore against ₹207.10 crore in the corresponding quarter of the last fiscal, representing a 27.1% increase.

Abhijit Roy, MD and CEO of Berger Paints, said, “The quarter witnessed strong growth on the volume front and robust growth in operating profits with the decorative business line volume growth in double digits. Our tier 2 and 3 city growth rates were higher than tier I city growth rates. We continued with our aggressive growth in the waterproofing and construction chemicals segment. New product introductions were made in the sealants and roof waterproofing category to fortify our product offerings in this segment.”

The results came after the close of the market hours. Shares of Berger Paints India Ltd ended at ₹556, down by ₹10.40, or 1.84%, on the BSE.

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Berger Paints Q2 profit jumps 33% to ₹292 crore, revenue rises marginally

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Berger Paints India on Thursday, November 2, reported a consolidated net profit of ₹292 crore for the second quarter (July to September) of the 2023-24 fiscal, a growth of 33% from ₹219.51 crore in the year-ago period.

The paint company’s revenue from operations for the quarter under review was ₹2,767 crore, a 3% increase from ₹2,670.9 crore in the corresponding period last year.

Earnings before interest, taxes, depreciation and amortisation (excluding other Income) for the July-September period was at ₹474 crore, representing an increase of 30% from ₹364 crore in the same quarter last year.

“We had double digit volume growth in the decorative segment with lesser value growth as sale of low end and commodity items is high during this quarter,” said Abhijit Roy MD amd CEO of Berger paints.

Due to delayed festive season and rains in the month of September, the sale of topcoats especially exterior coatings was heavily impacted, Roy said. However, he sees this improving considerably in the December quarter.

“We continue to work firmly on network expansion and implementation of key digital initiatives which should bear fruit in months ahead. The General Industrial and Powder coatings vertical witnessed robust value growth with strong showing on the profit front as well,” the CEO added.

Shares of Berger Paints India Ltd were trading 0.61% lower at Rs 546.70 apiece on the NSE today. The scrip has gained 6.69% in the last six months, while it has risen 13.64% so far this year.

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Berger Paints shares rise the most in seven weeks, hit 52-week high

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of leading paints manufacturer Berger paints India Ltd surged over three percent, logging the best single day jump in more than seven weeks, on Monday to trade near the 52-week high levels.

The stock rallied over three percent to hit a high of Rs 747.5, trading higher than its last 52-week high of Rs 741.95 hit on September 14, 2023.

Kolkata-based Berger Paints has rebounded more than 40 percent from its 52-week low hit on February 3, 2023.

Shares of the country’s second largest paints manufacturer have performed well this year even as the company’s position is facing threat given Grasim is aiming for the number two spot over the next few years.

Berger Paints CEO and Managing Director Abhijit Roy recently told CNBC-TV18 that the company was most likely to record a double digit growth in sales volume and value in FY24.

Also Read: Berger Paints to post double-digit volume, value growth this financial year, says MD & CEO

He had said that the second quarter of FY24 might face some challenges but the company was optimistic over its performance in the third quarter and there onwards.

The company in August had announced a bonus share issue in the ratio of 1:5 after posting stellar performance in the first quarter.

The bonus shares would be issued on or before October 7, 2023. The company had stated its securities premium account was Rs 120.72 crore, which was sufficient for the bonus issue.

The company reported a 40 percent rise in consolidated net profit to Rs 354.35 crore for the April-June quarter against Rs 253.43 crore in the year ago period.

Revenue from operations increased 9.8 percent year-on-year to Rs 3,029.5 crore compared to Rs 2,759.7 crore in April-June 2022.

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Berger Paints to post double-digit volume, value growth this financial year, says MD & CEO

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Kolkata-based paint maker Berger Paints Ltd will most likely record a double digit growth in sales volume and value during the current financial year, according to the company’s CEO and Managing Director Abhijit Roy.

In a recent interview with CNBC-TV18, Roy shared key insights into the company’s performance and outlook for the upcoming fiscal year. He acknowledged that the second quarter of the fiscal year might face some challenges. However, he remained optimistic about the company’s performance in the third quarter and there onwards.

“Quarter two will be slightly softer, but quarter three will be much more robust and quarter four will be moderate,” he said.

One of the highlights of Abhijit Roy’s statements was the commitment to achieving double-digit growth in both volume and value for the fiscal year 2024. This ambitious goal underscores Berger Paints’ determination to capitalise on market opportunities and maintain its position as a key player in the industry.

“We will end up with a double-digit growth by the end of the year, both in volume and value terms,” he said.

Berger Paints recorded a growth of 8.2 percent in revenues at Rs 9,547.8 crore in the financial year 2023, as compared to the previous year’s Rs 8,826.4 crore. In the last five years, the revenue of Berger Paints grew on an average annual rate of 7 percent from Rs 6,121.9 crore in financial year 2019 to Rs 9,547.8 crore in fiscal year 2023.

Also Read | Berger Paints announces 1:5 bonus issue; net profit rises 40% to Rs 354 crore

Roy also addressed the concerns about raw material prices by assuring that the company considers the current prices to be reasonable. This statement suggests that Berger Paints has a strategy in place to manage its costs effectively and intends to keep its profit margins stable.

Abhijit Roy announced that Berger Paints has steadily increased its market share over the past six years. This achievement reflects the company’s ability to adapt to changing market dynamics and resonate with customers, even in a competitive landscape.

Roy’s confidence in the company’s performance for the current year was evident when he stated that they do not foresee any significant impact from competition.

Looking ahead, Abhijit Roy acknowledged the ever-evolving nature of competition and its potential impact on the company’s performance in the coming year. This cautious approach indicates that Berger Paints is prepared to adapt and respond to market changes as they arise.

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Nippon Paint to repurchase India businesses from Singapore’s Wuthelam Group

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Japan’s largest coatings maker Nippon Paint Holdings will repurchase Nippon Paint (India) and Berger Nippon Paint Automotive Coatings for 14.5 billion yen from Singaporean paint conglomerate Wuthelam Group, Bloomberg reported. The deal is set to be completed in the first half of 2024.

As per the details put out, Berger Paints India will continue to own 49 percent stake in the automotive coatings venture. As of now, the Wuthelam Group owns 58.7 percent stake in Nippon Paint Holdings.

Nippon Paint said the Indian businesses have good prospects for sustained profit growth.

Earlier in 2020, Wuthelam planned to acquire a majority stake in Nippon Paint Holdings in a deal valued at roughly 1.3 trillion yen ($12.3 billion). Nippon had also executed a call option for the businesses, which it sold for combined 10.8 billion yen in 2021.

Also Read:India’s largest paint manufacturer is gearing up for a colourful festive season

With inputs from Bloomberg

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Berger Paints announces 1:5 bonus issue; net profit rises 40% to Rs 354 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Board of Kolkata-based multinational paint company Berger Paints India Ltd on Wednesday recommended issue of bonus shares in the ratio of 1:5. This means, for every five shares investors hold, they will get one additional share.

The proposed bonus issue, subject to approval of the shareholders, will be issued by capitalization of Securities Premium Account. “Securities Premium Account as on audited financial statement for the year ended March 31, 2022 is Rs 120.72 crore, which is sufficient to be utilised for the bonus issue,” the company said in a regulatory filing.

The bonus shares would be credited to the respective demat account of the shareholders on or before October 7, 2023, subject to completion of the rest of the formalities and approvals as and when required. “The aforesaid proposal is also subject to the approval of shareholders proposed to be taken through Postal Ballot commencing on 10th August, 2023,” it said.

Berger Paints India also disclosed its June quarter results alongside the bonus issue. The company reported an increase of 40 percent in consolidated net profit to Rs 354.35 crore for the first quarter ended June 30, 2023. The company had posted a net profit of Rs 253.43 crore in the April-June period a year ago.

Revenue from operations during the June quarter rose by 9.8 percent to Rs 3,029.5 crore, as against Rs 2,759.7 crore in the last year quarter.

The paint and coating manufacturing company also reported a high double digit volume growth at 13.7 percent, led by healthy growth across urban and rural markets.

Berger Paints witnessed a sharp expansion in gross margin at 39.8 percent in the reporting quarter, up 4.1 percent as against 35.7 percent in Q1FY23.

EBITDA or operating profit rose 37.5 percent to Rs 556.7 crore as against Rs 404.9 crore in the year-ago period. Meanwhile, meanwhile, rose 3.7 percent to 18.4 percent as against 14.7 percent in Q1FY23.

“Berger Paints continued to deliver on its promise of excellence and outperformed the market. The decorative business saw double digit growth both on value and volume fronts on high bases. Our operating profit-to sales percentage also increased substantially to 18.8 percent, a growth of 37.5 percent and a 2 year CAGR of 52.5 percent. We usually are in the range of 16-18 percent of operating profits and the Q1 performance has surpassed that range,” said Abhijit Roy, MD and CEO at Berger Paints.

“Powder coatings underperformed in Q1 but is expected to do better in Q2. Nepal operations underperformed due to country specific issues and will rebound in the coming quarter. We continue to focus on network expansion and invest in our brands. All our differentiated products like Anti Dust, Easy Clean and Longlife continue to grow handsomely. With normal monsoons ahead and an extended festive season, we are gearing up for exciting times ahead,” Roy said.

Shares of Berger Paints India Ltd settled at Rs 702 on the NSE, down 1.03 percent from the previous close. The stock has gained 21.60 percent on a year-to-date basis, while it rose 5.34 percent in the last one year.

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