Berger Paints India (BERGEPAINT) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue was nearly flat year-over-year due to extended monsoon and flooding in key markets, but market share gains were reported, supported by a 2.3% product price increase and strong premium segment performance.

• Premium and luxury product segments delivered double-digit volume growth, while mass products saw flat or negative growth.

• Strategic focus on urban markets with new teams and initiatives, aiming for 15% market share in metros in 2.5–3 years.

• Aggressive network expansion with over 2,200 new retail touchpoints and more than 2,000 ColorBank machines added in the quarter.

• Net cash positive position maintained, though moderated by dividend payments.

Financial highlights

• Standalone Q2 FY25 revenue at ₹2,430.7 crore, down 0.4% YoY; consolidated at ₹2,774.61 crore, up 0.3% YoY; PAT at ₹228.98 crore (standalone, -6.1% YoY), ₹269.90 crore (consolidated, -7.6% YoY).

• Gross margin reached a 10-quarter high at 40.4% (standalone), 41.7% (consolidated).

• Operating margin remained within the 15%-17% guided range, at 15.8% for the quarter.

• H1 FY25 standalone revenue up 1.1% YoY; PAT down 6.3% YoY; consolidated revenue up 1.2% YoY, PAT down 3.6% YoY.

• Net cash position at INR 242 crore as of September, down from INR 692 crore in June due to dividend payment.

Outlook and guidance

• Management expects improved demand and double-digit volume growth in Q4, with Q3 volume growth between 7%-10%.

• Value growth to lag volume in Q3 but expected to surpass volume growth in Q4.

• Decorative and industrial business outlook positive, with rural demand expected to recover post-monsoon and overseas subsidiaries (Poland, Nepal) expected to deliver strong double-digit growth.

• Operating margin guidance of 15%-17% reiterated for the foreseeable future.

• Raw material price decreases to marginally improve profitability in Q3.