Berger Paints (I) Limited — Q4 FY24
Berger Paints reported a mixed Q4 FY24 with 13.9% volume growth but only 2.7% value growth, driven by price cuts (~5%), destocking in luxury paints, and a mix shift toward high-...
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✓ Verified against BSE filing
Claim Ledger
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.
83%Questions answered1Evaded / deflected12Questions auditedContradictedNumbers vs filing
Answered
High priority
Timeline and rationale for 5% price cuts
Asked by Mihir Shah, Nomura
CEO provided specific timeline and breakdown of price cuts, directly answering the question.
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Question
Can you share the timeline of price cuts taken, and these price cuts are largely to pass on raw material benefits, or it is also positioning in anticipation of competition?
Abhijit Roy, CEO
Much of the price cuts, one price cut happened in the month of November, and then, you know, January, with January, the bulk of it happened. Out of this 5%, you know, 4.5% would have happened between, you know, primarily happened mostly in January, and then that 1% happened in the month of November.
Answered
High priority
Mix deterioration: down trading or destocking?
Asked by Mihir Shah, Nomura
CEO clearly attributed mix deterioration to destocking and low-value product growth, and gave outlook.
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Question
How should one read this, down trading or destocking? Is it a quarterly phenomenon, or do you think or one should expect this, down trading to continue in the coming quarters as well?
Abhijit Roy, CEO
There was some amount of destocking which happened, because there was an anticipation that prices might drop. Now that they are relatively clear, they will buy normal stocking will happen. And therefore, you know, in the first quarter, we do not expect destocking to continue, in the luxury products.
Partial answer
High priority
Will gross margin benefit trickle to EBITDA in CY2024?
Asked by Tejas Shah, Spark Capital
CEO gave qualitative expectation of improvement but no specific EBITDA margin guidance.
no specific margin guidancequalitative only
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Question
Should we expect that gross margin benefit? If we have to stay like this, then also it won't trickle down to EBITDA in at least CY 2024?
Abhijit Roy, CEO
There will be some improvement there, you know, because, you know, last year, you know, we had spent substantially more in advertisement, you know, on promotion expenses. That, I think, will somewhat normalize this year.
Answered
Medium priority
Target for distribution expansion in FY2025
Asked by Tejas Shah, Spark Capital
CEO provided a specific target number for Color Bank machines.
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Question
What would be that number of expansion which you will target this year, FY 2025?
Abhijit Roy, CEO
We are targeting about 8,000 new Color Bank machines to be installed this year in FY 2025. Last year, we had done about 7,100. We want to increase it further to 8,000 machines.
Answered
Medium priority
Sandila plant utilization and margin lever in FY2025
Asked by Tejas Shah, Spark Capital
CEO confirmed margin lever and provided current utilization level.
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Question
With Sandila plant now kind of stabilizing, I'm assuming last time you highlighted 35% utilization. As that utilization goes up, should we expect some lever for margins playing out in FY 2025?
Abhijit Roy, CEO
Yes, you can expect that. That will also be beneficial for us because, you know, I'm sure you know, we have already reached about now 48-50, and which we should be able to hold on in the month of April... I think over the year, on an average, we should be around that 50% level, so better utilization of Sandila plant, and that should result in some savings coming in.
Answered
High priority
Demand outlook: is consumption improving or status quo?
Asked by Abneesh Roy, Nuvama
CEO gave clear outlook: double-digit volume growth to continue in Q1.
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Question
If I put all together, where are we? Because we have grown double-digit in the last few years also, and you are again giving a guidance, but I'm trying to understand inherent strength. Is it improving? Is it status quo currently for you?
Abhijit Roy, CEO
I don't see any major change happening in terms of the growth rate. You know, which means that the volume, double-digit volume growth which we registered in quarter four, should continue as far as quarter one is concerned.
Partial answer
High priority
Impact of new competition on ad spends, employee costs, dealer incentives
Asked by Abneesh Roy, Nuvama
CEO gave qualitative comfort but no specific numbers on cost inflation.
no specific cost guidancequalitative only
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Question
Now that two more months have happened post the launch event, where do you see these in FY 2025? Is there a big risk in terms of inflation in these three line items?
Abhijit Roy, CEO
I think, you know, we are more comfortable now than what we were there. We were more anxious, you know, earlier. I think, you know, after two months, you know, I think, we are gearing down to the thought that this is a competition which is serious, but, you know, it has not started impacting us in a strong way as of now.
Answered
High priority
Value growth outlook for FY2025 given price cuts and mix
Asked by Avi Mehta, Macquarie
CEO provided specific value growth expectation: mid-single digit till December.
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Question
In your estimate, what is the number that we should look at? A mid-single digit, or it's lesser than that?
Abhijit Roy, CEO
So I indicated that we will have a double digit and, you know, slightly below that double digit number... in terms of the value growth. That's where, you know, so mid-single digit is where we will be possibly in terms of the value growth till December.
Answered
High priority
EBITDA margin guidance: still 15-17% range?
Asked by Avi Mehta, Macquarie
CEO reaffirmed EBITDA margin guidance of 15-17%.
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Question
Would you seek to change that guidance upwards, or would you still maintain that because you're almost on 16.6 this year itself?
Abhijit Roy, CEO
We will still remain in that range, you know. We won't change our guidance. We will remain in that 15%-17% range.
Declined
Medium priority
Quantum of low-cost inventory benefit in Q4 gross margin
Asked by Avi Mehta, Macquarie
CEO explicitly declined to provide the quantum.
refused to share number
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Question
Would you be able to share any quantum of this impact? How much is it? Is it material or...?
Abhijit Roy, CEO
No, I don't have those numbers with me, and I don't think, you know, I'll be able to tell you at this stage.
Answered
Medium priority
Rebating intensity compared to historical new competition entries
Asked by Harsh Shah, Bandhan
CEO stated no change in rebating intensity.
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Question
How is the rebating or the promotional intensity different this time around compared to historically when new competition enters?
Abhijit Roy, CEO
I don't think anything has changed, you know, in terms of rebating. Historically, whatever has been there continues as far as rebating is concerned.
Answered
Medium priority
Project business as percentage of decorative revenue and growth
Asked by K.G. Lakshminarayanan, Tunga Investments
CEO provided specific percentage and growth comparison.
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Question
In terms of your project business in the decoratives, what percentage of revenues is coming from the project business and how it has actually grown in the last one year?
Abhijit Roy, CEO
About 8%, you know, which comes from the project business, you know, it's been growing slightly ahead of retail. Not significantly ahead, but slightly ahead of retail, in terms of value growth.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Decorative value growth 5.6-6% in FY2024 | 6% | 2.7% | Overstated vs filing |
| Value growth mid-single digit till December, then double-digit | 10% | 2.7% | Overstated vs filing |
| EBITDA margin guidance 15-17% range maintained | 17% | 14.5% | Overstated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.