'Add' Berger Paints Shares Maintains Dolat Capital Post Q1 Results — Check Target Price

On a consolidated basis, Berger Paints' revenue grew by 3.6% YoY to Rs 32.0 billion in Q1 FY26, outperforming key competitors like Asian Paints/Kansai Nerolac, which posted -0.3/+1.4% respectively.

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Dolat Capital Report

Berger Paints India Ltd.’s Q1 FY26 revenue and Ebitda were ahead, while adjusted profit after tax was in line with our estimates. Consolidated revenue grew by 3.6%, while standalone revenue grew by 2.0% with 5.6% volume growth. Sequential demand recovered, but early monsoon dampened later momentum.

On a five-year CAGR basis, revenue grew by 28%. The performance was better than the competition; Asian Paints/Kansai Nerolac posted -0.3/+1.4% respectively.

Gross margin expanded by 150bps YoY to 41.4% due to favorable raw material trends and improved product mix. However, Ebitdam contracted 40 bps to 16.5% due to higher operating costs. Going ahead, Ebitdam is expected to remain in the 15-17% range.

Though Q1 results were ahead, we maintain our FY26/27E EPS at Rs 11.4/12.8 as we have already factored in recovery. Valuing the stock at 49x FY27E EPS, we arrive at a target price of Rs 630. Maintain ‘Accumulate’.

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