Berger Paints (I) Limited — Q1 FY26
Berger Paints reported a resilient Q1 FY26 with 5.5% volume growth and 2% value growth on a standalone basis, outperforming the industry which grew only 0.3% among listed players.
bullish
high
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Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
75%Questions answered1Evaded / deflected12Questions audited
Partial answer
High priority
Can deferred volume growth be expected in coming quarters?
Asked by Mihir Shah, Nomura
Acknowledged deferment but gave no quantitative expectation, only general hope.
no specific guidancedeferred to monsoon abatement
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Question
On volume growth, I wanted to check, while you've done better, we were expecting a little bit of improvement versus the number that we have seen of 5.5%. We were expecting maybe closer to high single-digit volume growth. On this front, can one expect this growth that has not come to be deferred in the coming quarters?
Abhijit Roy, Managing Director and CEO
Typically, Mihir, you know, sales do come back, you know, because the monsoon is unpredictable. It's difficult to guess in India, you know, when it will come and how long it will prevail. It started a bit early this time towards the end of May, which was a surprise across many markets, and it was quite intense in some parts of the country.
Answered
High priority
Is competitive intensity stabilizing? Are dealers returning?
Asked by Mihir Shah, Nomura
Provided detailed explanation of dealer behavior and stabilization without dodging.
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Question
Second question is on competitive intensity. It seems other players have highlighted that the dealers lost to competition are now coming back. Wanted to know your thoughts on, you know, how this is shaping up for you and any other trend that you are seeing in the marketplace with respect to competition, etc.
Abhijit Roy, Managing Director and CEO
Frankly speaking, competition, as I had already always maintained, there will be some share loss, which is likely to happen for all the players, which we have seen happening in the recent past, right? Because any new player who comes in will gain some share, and that will be at the cost of the existing players.
Answered
High priority
Is the margin guidance band unchanged?
Asked by Mihir Shah, Nomura
Confirmed margin guidance band with specific current level.
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Question
Lastly, if I can just push in one more on margins. You continue to maintain the margin guidance band that we highlighted. I assume that there's no change out there, right?
Abhijit Roy, Managing Director and CEO
No, not at all. You have seen that we have, in fact, always said that it will be operating in the 15%- 17% range. We have been more or less towards the 17%. In fact, in the standalone, we are ahead of 17%. We are around that point only.
Partial answer
High priority
Will low double-digit volume growth be achievable?
Asked by Avi Mehta, Macquarie
Gave historical range but did not commit to low double-digit, only hoped for 7-9%.
no explicit commitment to low double-digitdeferred to post-monsoon
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Question
Sir, I had two questions. You've clearly indicated about the margin, you know, comfort. I just wanted to also check, would given, you know, this demand environment, would we still want to say that we would gun for a low double-digit volume growth in the next year or the demand environment?
Abhijit Roy, Managing Director and CEO
As far as volume, you know, trend you have seen, you know, that we have been hovering around this 5%, 6%- 7%, 8% range. The whole of last year, we were at around, and on average, around 8%. Last quarter, quarter four of last year also, we were around that same point of 8%- 9% in terms of volume. This quarter has been a little bit lower than that at about 5.5%.
Answered
Medium priority
How will JSW-Akzo merger affect competitive intensity?
Asked by Avi Mehta, Macquarie
Gave clear view that no major change expected from the merger.
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Question
Second, sir, I wanted to check, yes, I do understand the stabilization of competitive trends, but would love to hear your thoughts on how do you see this intensity behaving now that there has been another merger between Akzo and JSW?
Abhijit Roy, Managing Director and CEO
Now, as far as competitive intensity is concerned, I have explained about the first player, which is, you know, who entered, you know, initially. The second, which you mentioned, JSW plus Akzo, that's, you know, still not, you know, formalized sort of. They have to, first of all, merge, or do something, or if it is standalone, if they operate just like they are doing today, I see no great changes happening in the competitive intensity.
Answered
Medium priority
Are there regional or segment nuances in competitive intensity?
Asked by Tejas Shah, Spark
Provided specific segmental breakdown of competitive impact.
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Question
Just wanted to understand, is there any more nuanced dimension to it in terms of premium, economy, or mass? Is it like varies a lot in terms of the segment of the market?
Abhijit Roy, Managing Director and CEO
No, frankly speaking, not so much. It is there more towards the economy, the primers, and lesser towards the luxury or premium luxury category. Mostly the commodity type where first, it's expected as well that where lesser branding strength is required, that is the place where one tends to have some sort of erosion initially.
Answered
Medium priority
Are channel inventory levels causing margin pressure?
Asked by Tejas Shah, Spark
Directly addressed inventory levels and dismissed margin pressure concern.
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Question
Given that most of the paint companies flagged weak demand in June, July due to early onset of monsoon, how would you assess the current inventory levels in the trade channel? Why am I asking this is that do you foresee some pressure on margins, let's say, because there is a lot of stocking up which would have happened because of early monsoon this year?
Abhijit Roy, Managing Director and CEO
You know, Tejas, normally in the paint business, when we are selling, we have to collect also. Otherwise, sales get stuck immediately, right? That is why the sales figure on the growth has been less. The channel inventory is fine. I don't see that getting impacted in any significant way.
Evasive
Medium priority
What is the timeline for Bolix recovery?
Asked by Abneesh Roy, Nuvama
Did not provide any timeline for recovery, only described business as healthy.
no timeline givendeflected to general positivity
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Question
One is on Bolix. Any timelines you see in terms of recovery? It's a natural market where multiple factors are in play in terms of low growth. Geopolitical tensions keep happening. What will be the long-term strategy in a Bolix kind of a business given the developed market where it is?
Abhijit Roy, Managing Director and CEO
Actually, Abneesh, you know, this Bolix business, you know, as we see it, you know, it's on a good wicket as of now, largely because, you know, it is in a domain which is basically meant for energy saving. As you know, this is an insulation business. In Europe and the U.K., the governments are promoting this, you know, in order to save energy.
Answered
Medium priority
Has the new entrant's 10% extra grammage been reduced?
Asked by Abneesh Roy, Nuvama
Provided specific update on reduction of extra grammage offer.
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Question
The 10% extra grammage by the new player. We got in another call today that maybe in some areas it is reversing. Now these are early data points. What are you picking up on the 10% extra grammage?
Abhijit Roy, Managing Director and CEO
The 10% extra grammage, there has been a reduction there. I am told that earlier it was across all pack sizes. Now it's there primarily in the 20-liter pack sizes. The one and four-liter possibly has been withdrawn in many markets. That's the news which is coming back to us.
Partial answer
High priority
When will volume and value growth converge?
Asked by Karthik Chellappa, Indus Capital
Gave a range for differential but did not commit to a specific convergence quarter.
no exact quarter givenrange provided
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Question
With your assessment of the way volume demand is set to recover after the monsoon season and the way mix has been evolving and the annualization of the price cuts, at what point or in how many quarters in your assessment do you think volume and value growth will start to converge?
Abhijit Roy, Managing Director and CEO
Karthik, possibly for the next two, three quarters, there will be some differential between the volume and the value growth, largely because of the mix of products which is growing faster than those which are not growing as fast. ... That differential is possibly going to remain at about, say, 1.5%- 2%. It will narrow down further.
Partial answer
Medium priority
What is driving double-digit employee expense growth?
Asked by Karthik Chellappa, Indus Capital
Explained drivers but did not quantify proportion between new hires and inflation.
no specific proportion given
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Question
If I were to look at the standalone employee expenses in the last five quarters, barring maybe one quarter, that has continued to grow at double digits, what proportion of that would be, let's say, increase in feet on street versus, let's say, normal salary inflation?
Abhijit Roy, Managing Director and CEO
It has been, you know, we have added genuinely, you know, feet on the street as well. Since the, you know, as you see, 8%- 10% has been historically there with us. It's not as if something different is happening now. The salary increases in India, you know, the inflation has always been in excess of 5%- 6%. The increases have always been in the range of 8%- 9% on an average that, you know, we have given.
Answered
Medium priority
Has the new entrant changed trade schemes or credit terms?
Asked by Jaykumar Doshi, Kotak Securities
Directly answered no major changes, only schemes became more complicated.
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Question
Very specifically, I would like to know whether is there any change in trade schemes, working capital, credit period that, you know, the new entrant is offering to its dealer network versus what it used to be six months back?
Abhijit Roy, Managing Director and CEO
No, they have been more or less, you know, they came in with a dealer price list which was 5% lesser in terms of pricing, you know, and schemes which were slightly higher loaded than the industry in general. I see no major changes. The schemes have become more complicated.