Berger Paints India's construction chemicals and waterproofing business now accounts for 10-12% of the company's decorative portfolio and continues to expand at a materially faster clip than the core paints business, according to management commentary on the company's Q1 FY27 earnings call.
Managing Director and CEO Abhijit Roy said the segment's share fluctuates month to month and quarter to quarter but has settled around the 12% mark, with growth rates "significantly higher" than the paint category. The waterproofing range, led by the Roof Kool and Seal line, continued to gain momentum through the quarter, the company said.
Roy said Berger's presence in construction chemicals and waterproofing has strengthened over the years, with product quality now well established across markets. "The growth rate that we see is much higher than paint in this category and it will continue," he said.
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On tile adhesives, a category several rivals have entered aggressively, Roy said Berger already sells "decent quantity" but wants to expand further, without giving specific targets.
The comments came after Nuvama's Abneesh Roy flagged that peer paint companies have been stepping up investments in waterproofing, tile adhesives and construction chemicals as they look to diversify beyond core decorative paints, a category facing intensifying competition following a new large entrant.
Momentum Building Into Second Half
Berger's overall decorative business posted 13.5% value growth and near 20% operating profit growth in the June quarter, its strongest in 12 quarters, aided by calibrated price increases and improved product mix.
Roy struck an upbeat tone on the outlook for the September quarter and beyond, tying the construction chemicals push to a broader strategy of building volumes even as pricing action continues. He said network expansion, a new branding campaign and fresh product launches would help sustain volume growth alongside the price increases already taken.
The company expects double-digit revenue growth to sustain through FY27, supported by the full-quarter impact of price hikes in the industrial business line, festive season demand and continued distribution expansion. Operating margins are expected to stay within the company's guided band of 15-17%, with Roy indicating margin performance in the September quarter should be a shade better than the June quarter on a year-on-year basis.
On backward integration, a theme gaining traction across the paints sector as rivals invest in resin manufacturing, Roy said Berger already produces the bulk of its emulsions and resins in-house and continues to look for opportunities to bring more inputs, such as thickeners, under its own manufacturing umbrella. He cited a recent tie-up with Dow for an emulsion previously imported, which will now be manufactured at the company's Sandila facility in Lucknow.
Roy added that two new factories, at Panagarh in West Bengal and near Bhubaneswar in Odisha, are in the pipeline, with a large part of the company's growing cash surplus of Rs 1,424 crore earmarked for the projects.
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