Berger Paints: Q2FY23 Result Update
15-11-2022

Market Cap: Rs. 58,699 cr

CMP: Rs. 604 | PE 62x TTM

 

Results

INR Crore

YoY Growth

Comments

Revenue

2387.97

22.35%

Led by increase in demand for premium and luxury premium interior paints, volume growth of 11%.

EBITDA

364

2.82%

Low single digit growth due to high raw material prices.

Click here for 10-year X-ray

 

Key Highlights:-

  • Introduced 3 new products this quarter- 1 in decorative that is matte finish & 2 in waterproofing.
  • Powder coating segment had a negative growth due to slowdown in business of fan manufacturers.
  • 11% overall volume growth, value growth in decorative segment ~ 23%.
  • Premium and luxury premium segment(interior coating) of decorative segment gave a decent growth, combined with growth in waterproofing. Urban areas grew better than the rural areas.
  • Significant increase in number of dealers added this quarter, 3200 new paint machines added this quarter, which is almost 1.8x the half yearly average.

 

Management Outlook:-

  • Raw material prices expected to soften in the coming quarters, gross margin expansion expected.
  • Subdued demand due to prolonged rainfall expected to be fulfilled in November & December, mainly increasing the exterior paint segment.
  • Already operating at 85% capacity during peak season, the management has commissioned the construction of the largest manufacturing plant till date. Expected outlay of 1000 cr and potential increase in topline growth ~ 33% of current level.
  • Converting around 35% of their non paint dealers to paint dealers, especially in the rural areas, to leverage the existing distribution network and increasing the market reach in north and west regions.
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