Berger Paints (India) Ltd. share price target

Business continues to be impacted due to the COVID pandemic with persisting partial lockdowns and granular demand curve recovery. Moreover, cost control still remains a challenge, as price hikes if any might negatively impact the demand. While uncertainties linger in the near-term, we believe, the stock is currently overpriced compared to its peers. Hence, we maintain our REDUCE rating on the stock with a revised target price of Rs. 698 based on 61x FY23E adj. EPS. Pressing topline upon subdued sequential growth...

Subsidiaries revenue (calculated) in Q4FY21 increased ~27% despite a higher base of 51% growth. The company's subsidiaries in BJN Nepal and Bolix SA (Poland) reported a strong sales recovery in Q4FY21 post ease in lockdown restrictions and improved demand conditions in the respective regions. On the domestic fronts, STP Ltd (STPL), which is primarily into waterproofing and protective coatings has also recorded a strong...

Berger Paints (BRGR) reported better than expected result driven by continued strong growth momentum in decorative coatings and robust performance of subsidiaries. Positively, revenue growth of BRGR during 4QFY21 stayed ahead of competition. Management guides that they have significantly improved on distribution expansion during FY21 as compared to normal rate of 10-12%. Also, BRGR fared well on managing input cost inflation (gross margin remained flat) compared to other players in paint industry (who reported gross margin contraction). BRGR has taken c.2.5% price hike in May'21 to address rise in raw material cost and is likely to undertake more price hikes...

Considering the present economic activity and demand scenario, we expect the business could face impact from local lockdowns in the coming quarter. Company's ability to manage cost inflation through price hikes, without affecting demand, needs to be closely monitored. The stock is currently trading at expensive valuation. Considering nearterm uncertainties, we maintain our REDUCE rating on the stock with a revised target price of Rs. 696 based on 60x FY23E adj. EPS. Slowdown in demand recovery affects sequential topline growth Berger Paints' Q4FY21 consolidated revenue declined 4.3% QoQ on slow pace of...

Background: Berger Paints is the second largest decorative paint company in India. The Company operates seven manufacturing facilities spread across India, and four overseas manufacturing facilities. The company has second largest distribution network of ~11,500 active dealers and ~12,000 tinting machines. Berger has a strong presence in East and North India, which accounts for 60% of its distribution network while South & West India accounts for 40% of distribution network. Company derives ~80% of revenue from decorative paints and the rest from industrial paints of which Automotives accounts for 8%, powder coating accounts for 2%...

Near term growth momentum depends on the demand for industrial and protective coatings which further depends on macro environment recovery. Also, competitive pressures and raw material price fluctuation could impact the business prospects in long-term. Hence, considering the extended valuation, we downgrade our rating on the...

Background: Berger Paints is the second largest decorative paint company in India. The Company operates seven manufacturing facilities spread across India, and four overseas manufacturing facilities. The company has second largest distribution network of ~11,500 active dealers and ~12,000 tinting machines. Berger has a strong presence in East and North India, which accounts for 60% of its distribution network while South & West India accounts for 40% of distribution network. Company derives ~80% of revenue from decorative paints and the rest from industrial paints of which Automotives accounts for 8%, powder coating accounts for 2%...

Consolidated revenue in Q2FY21 increased 87.2% sequentially to Rs. 1,743cr, post-COVID impact, mainly due to increase in volumes. We expect the volume to increase further in Q3FY21 backed by upcoming...

Berger Paints (BRGR) result was above expectations. BRGR outperformed competition (APNT, KNPL) on volume growth in decorative coating business by 200-600bp. General and industrial coating business improved sequentially driven by gradual unlocking and improvement in industrial activity. Demand from tier2-3-4 cities outperformed metro. Benign raw material cost, control over discretionary expenses and operating leverage supported gross/EBITDA margin expansion. Positively, BRGR has ramped up overall investments by 66% (to Rs 4.5bn) for capacity expansion in Lucknow plant which will be operational by Dec'21. Management expects 2HFY21 to be stronger driven by festivity...

Background: Berger Paints is the second largest decorative paint company in India. The Company operates seven manufacturing facilities spread across India, and four overseas manufacturing facilities. The company has second largest distribution network of ~11,500 active dealers and ~12,000 tinting machines. Berger has a strong presence in East and North India, which accounts for 60% of its distribution network while South & West India accounts for 40% of distribution network. Company derives ~80% of revenue from decorative paints and the rest from industrial paints of which Automotives accounts for 8%, powder coating accounts for 2%...