Steady volume growth and improving demand trends offset by operating leverage challenges and brand investments
Berger Paints India reported subdued earnings for the December quarter, with margin pressures weighing on profitability despite steady volume growth and early signs of demand recovery. Net profit declined 8.1 per cent year on year to Rs 271.1 crore, while revenue from operations edged up 0.3 per cent to Rs 2,984 crore.
Earnings before interest, tax, depreciation and amortisation (Ebitda) stood at Rs 471 crore, broadly flat compared with the year-ago period. Ebitda margin came in at 15.78 per cent, in line with the company’s stated guidance.
Volumes Remain Firm
Standalone volumes rose 8.5 per cent during the quarter, aided by a gradual recovery in demand following a weak October that was impacted by extended monsoons and a shorter festive season. Gross margins improved to their highest level in the past 15 quarters, supported by moderation in key input costs.
However, operating profitability remained under pressure due to negative operating leverage and continued investments in brand-building initiatives, the company said.
Segment-wise Performance
Growth momentum continued across key focus segments, including waterproofing, construction chemicals and wood coatings. Automotive coatings recorded mid-single-digit growth, while protective and general industrial coatings also posted positive performance during the quarter.
Commenting on the outlook, Berger Paints India Managing Director and Chief Executive Officer Abhijit Roy said demand indicators have been improving sequentially, with month-on-month growth visible across segments. He added that stable margins within the guided range and improving demand trends are expected to support performance in the coming quarters, although near-term risks from foreign exchange volatility and geopolitical uncertainty persist.
The company reiterated its focus on expanding its distribution network, driving innovation and strengthening brand investments. It also highlighted its environmental, social and governance (ESG) performance, noting that Berger Paints scored 64 on the National Stock Exchange’s ESG parameters, ahead of several industry peers.
Shares of Berger Paints India closed 1.3 per cent lower at Rs 473.85 on the National Stock Exchange on the day the results were reported.
