Berger Paints registered high single-digit volume growth in the decorative segment. Furthermore, it witnessed a sequential uptick in value growth with a reduced gap between volume-value growth gap. Gross margin expanded by 200bps to 42.7% in Q4 FY25.
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Dolat Capital Report
Berger Paints India Ltd.’s Q4 FY25 results were ahead of our estimate. Despite muted consumer sentiments, the company’s standalone volume grew by 7.4%, while revenue grew by 4.4%. On a five-year CAGR basis, revenue grew by 12.6%.
The performance was better than the competition; Asian Paints/Kansai Nerolac posted -4.3/+2.7% respectively.
Gross margin expanded by 200 bps to 42.7% due to-
favorable raw material trends,
improved product mix and marginal price hikes and
reduction in overheads and cost control strategies.
Furthermore, Ebitdam expanded by 190 bps, led by higher operating efficiencies and high single-digit volume growth. Going ahead, Ebitdam is expected to remain in the 15-17% range.
We have upward revised our FY26/27E EPS by 0.6/1.4% at Rs 11.4/12.8. Valuing the stock at 48 times FY27E EPS, we upgrade target price at Rs 616.
However, due to the recent run up in the stock price, we downgrade our rating to ‘Accumulate’.
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