Berger Paints India (BERGEPAINT) Q1 24/25 earnings summary

Executive summary

• Achieved strong double-digit volume growth in Q1 FY25, with the highest market share gain among listed peers year-over-year and quarter-over-quarter.

• Operating margin outperformed guidance, aided by price increases on differentiated products and ongoing network expansion.

• Consistently outperformed industry revenue growth rates over the past five quarters.

• Decorative business led growth, with robust performance in construction chemicals, waterproofing, and wood coatings, while luxury product sales softened in key states.

• Leadership transition announced: Ms. Rishma Kaur appointed Chairperson and Mr. Kanwardip Singh Dhingra as Vice Chairman, effective August 13, 2024.

Financial highlights

• Q1 FY25 standalone revenue grew 2.4% year-over-year to ₹2,806.3 crore; consolidated revenue up 2.0% to ₹3,091.0 crore.

• Standalone PAT declined 6.4% year-over-year to ₹305.5 crore; consolidated PAT nearly flat at ₹354.0 crore.

• Standalone operating margin at 17.2%, above guidance but down from 18.8% last year due to higher raw material costs and increased ad spend.

• Gross margin remained stable at 40.3% in Q1 FY25.

• Net cash position improved to ₹657 crore as of June 2024, up from ₹341 crore in March 2024.

Outlook and guidance

• Decorative business value growth expected to improve in Q2, supported by further price increases.

• Industrial business outlook positive, driven by anticipated government infrastructure spending post-elections.

• Normal monsoon projected to boost rural demand; geopolitical risks may impact inflation.

• Guidance for continued network expansion, especially in underrepresented regions.

• Management remains optimistic about demand for the year ahead, expecting continued growth in key segments and new product innovations.