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Berger Paints (I) Limited — Q3 FY25
Berger Paints reported a 7.4% volume growth in Q3 FY25, outperforming peers, driven by strong decorative performance and market share gains (now >20%).
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Berger Paints reported a 7.4% volume growth in Q3 FY25, outperforming peers, driven by strong decorative performance and market share gains (now >20%). Revenue grew 0.4% YoY (standalone) due to price cuts and mix shift to high-volume products like tile adhesives. EBITDA margin at 16.2% remained within the guided 15-17% range, improving sequentially. PAT rose 16.3% aided by a dividend from BJN Nepal. Management expects volume growth to approach double digits in Q4 as price cut impacts wane and consumer sentiment improves post-budget. Key risks include sustained competitive intensity from Grasim (estimated 3.5% market share) and currency depreciation, though raw material costs are expected to remain stable.
बर्जर पेंट्स ने तीसरी तिमाही में बिक्री की मात्रा में 7.4% का इज़ाफ़ा किया, जो दूसरी कंपनियों से बेहतर है। इसकी वजह पेंट की मज़बूत बिक्री और बाज़ार में हिस्सेदारी बढ़ना (अब 20% से ज़्यादा) है। कमाई सिर्फ 0.4% बढ़ी क्योंकि कंपनी ने दाम घटाए और टाइल चिपकाने वाले गोंद जैसे सस्ते उत्पाद ज़्यादा बेचे। मुनाफ़ा 16.2% रहा, जो कंपनी के अनुमान (15-17%) के अंदर है। शुद्ध मुनाफ़ा 16.3% बढ़ा, जिसमें नेपाल की सहायक कंपनी से मिले लाभांश का हाथ है। कंपनी को उम्मीद है कि अगली तिमाही में बिक्री और तेज़ होगी क्योंकि दाम कटौती का असर कम होगा और बजट के बाद लोगों का भरोसा बढ़ेगा। खतरे में ग्रासिम जैसी कंपनियों से कड़ी टक्कर और रुपये की कमज़ोरी शामिल है, हालांकि कच्चे माल की लागत स्थिर रहने की उम्मीद है।
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Sustained competitive intensity from Grasim
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Volume Growth
7.4%
+7.4pp YoY
Decorative segment volume growth in Q3 FY25, a standout vs peers.
Market Share
>20%
+0.5pp YoY (approx)
Berger continued to gain market share in Q3, now exceeding 20%.
Retail Touchpoints Added
2,000+
+2,000 QoQ
Aggressive network expansion added over 2,000 retail touchpoints in Q3.
ColorBank Tinting Machines Installed
1,800
+1,800 QoQ
Installed around 1,800 ColorBank tinting machines during the quarter.
What Changed vs Last Quarter
NEW
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.
UPDATED
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.
UPDATED
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.
DROPPED
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.
NEW RISK
Currency depreciation impact on margins
INR depreciation could raise import costs (25-30% of RM), but management expects stable oil prices to offset. Risk if depreciation accelerates.
NEW RISK
Slowdown in consumer sentiment recovery
If the anticipated demand recovery post-budget does not materialize, volume growth may remain below historical trends.
RISK GONE
Geopolitical risks impacting raw material costs
Management noted that geopolitics may pose risks, potentially affecting input costs and supply chains.
RISK GONE
Urban initiative may take time to yield results
The urban market strategy, while promising, may take several quarters to show meaningful impact, with benefits expected only from Q4 and next year.
RISK GONE
One-off costs in international subsidiaries
Bolix subsidiary had a one-off revenue reversal of INR 12 crore due to a project dispute, impacting consolidated profitability.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY24, Q2 FY25
Volume growth is expected to reach double digits in Q4, aided by favorable base and improving demand.
Mentioned in Q1 FY24, Q3 FY24, Q4 FY24
Berger Nepal saw another quarter of degrowth due to economic turmoil, expected to persist for at least one more quarter.
Mentioned in Q1 FY24, Q4 FY24
Geopolitical situation could cause volatility in raw material prices, affecting gross margins.
Fast read
Guidance and risk preview
Management expects volume growth to improve sequentially, moving towards double digits in Q4, driven by waning price cut impact and better sentiment.
Grasim has gained ~3.5% market share YTD, impacting industry growth.
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