Berger Paints (I) FY25 Annual Earnings Summary
4 quarters covered · ₹11,545 Cr revenue · ₹1,183 Cr PAT · 16.5% average EBITDA margin.
Quarter-by-quarter progression
Management promises made during the year
Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q1 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q2 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q2 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q4 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q4 FY25Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q4 FY25Risks flagged during the year
Birla Opus is expected to continue aggressive pricing and market share grabs, potentially pressuring volumes and margins in the near term.
Q1 FY25 · mediumInitial hype has faded, but the new player is placing tinting machines and may launch advertising from September; repeat purchase cycle is yet to be seen.
Q1 FY25 · mediumManagement noted that geopolitical factors may pose risk to inflation, which could pressure margins if price increases are insufficient.
Q2 FY25 · mediumNew players like Grasim and potential entry of others could pressure pricing and market share, especially in mass products like putty.
Q2 FY25 · mediumManagement noted that geopolitics may pose risks, potentially affecting input costs and supply chains.
Q3 FY25 · mediumGrasim has gained ~3.5% market share YTD, impacting industry growth. Berger expects continued pressure but aims to offset via distribution expansion.
Q3 FY25 · mediumINR depreciation could raise import costs (25-30% of RM), but management expects stable oil prices to offset. Risk if depreciation accelerates.
Q3 FY25 · mediumIf the anticipated demand recovery post-budget does not materialize, volume growth may remain below historical trends.
Q4 FY25 · mediumThe government imposed anti-dumping duty on rutile, which could increase raw material costs by INR 15-20 crore annually if not overturned.
Q4 FY25 · mediumOverall consumption economy remains sluggish, with paint industry growth below historical GDP multiples, limiting volume upside.
Q4 FY25 · mediumEmployee costs are expected to grow at 12-13% due to continued hiring of feet on the street, pressuring margins.
Q1 FY25 · lowKerala and West Bengal, large luxury markets, had subdued performance, impacting mix and value growth.
What changed through the year
Q1 FY25 · Decorative value growth to improve in Q2 aided by ~2% price increases
Product price increases undertaken in Q1 and July/August are expected to lift value growth by about 2% in Q2.
Q1 FY25 · Operating margin to improve marginally in Q2 to above 17%
Management expects Q2 EBITDA margin to be slightly better than Q1's 17.2%, despite RM inflation and higher ad spend.
Q1 FY25 · Target 1,000+ franchisee paint studios by year-end
Currently at 616 stores, the company plans to expand to over 1,000 exclusive stores by end of FY25.
Q1 FY25 · Network expansion of 8,000 additional dealer touchpoints in FY25
After adding 1,900 in Q1, the company aims to add 8,000 total retail touchpoints for the full year.
Q2 FY25 · Volume growth of 7%-10% in Q3 FY25
Management expects volume growth to be between 7% and 10% in Q3, driven by demand recovery and urban initiatives.
Q2 FY25 · Double-digit volume growth in Q4 FY25
Volume growth is expected to reach double digits in Q4, aided by favorable base and improving demand.
Q2 FY25 · Operating margin to remain in 15%-17% range
Management reaffirmed that EBITDA margin will stay within the guided 15%-17% band in the foreseeable short term.
Q2 FY25 · Value growth to exceed volume growth by ~1% in Q4
Value growth is expected to be about 1% ahead of volume growth in Q4 as price increases and base effects play out.
Q3 FY25 · Volume growth to approach double digits in Q4 FY25
Management expects volume growth to improve sequentially, moving towards double digits in Q4, driven by waning price cut impact and better sentiment.
Q3 FY25 · EBITDA margin to remain in 15-17% band
Management reiterated its guidance of EBITDA margin staying within the 15-17% range, with no plans to sacrifice profitability for market share.
Q3 FY25 · Volume-value gap to narrow to 2-2.5% in coming quarters
The volume-value gap, currently ~6.5%, is expected to reduce as price cut impact fades, leaving a structural gap of 2-2.5% from mix shift.
Q4 FY25 · EBITDA margin to remain in 15%-17% band
Management expects to maintain EBITDA margins at the higher end of the guided 15%-17% range, supported by stable gross margins and cost control.
Q4 FY25 · Revenue growth to improve sequentially in FY26
Revenue growth is expected to improve each quarter in FY26 as the volume-value gap narrows and demand recovers, with Q1 being slightly better than Q4 FY25.
Q4 FY25 · CapEx of ~INR 400 crore in FY26
Capital expenditure for FY26 is guided at around INR 400 crore, primarily for Hindupur expansion (INR 250 crore) and initial spend on Panagar plant (INR 150 crore).
Q4 FY25 · Market share gains to moderate to 0.3-0.4% annually
Management expects market share gains from listed players to normalize to 0.3-0.4% per year, lower than the exceptional gain in FY25.