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Revenue
₹2,827 Cr
verified against source
Revenue YoY
1.1%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Berger Paints reported a tough Q2 FY26 with standalone revenue growth of only 1.1% YoY and EBITDA margin contracting to 12.7% (down from ~15.6% in Q2 FY25). Volume growth was 8.8%, but value growth lagged due to extended monsoons, which depressed sales of high-margin exterior products and caused a mix shift toward economy emulsions. Gross margin dipped 0.8% to 39.6% despite raw material tailwinds. Management attributed the sharp EBITDA margin decline to negative operating leverage from muted value growth and higher brand investments. They expect a demand revival post-Diwali, targeting mid-single-digit value growth in Q3 and double-digit in Q4, with EBITDA margins improving to 15-17% in H2. Key risk: if pent-up demand fails to materialize due to persistent competitive intensity or further weather disruptions, margin recovery may be delayed.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects mid-single-digit value growth in Q3 and double-digit in Q4, driven by pent-up demand and improved weather.
- Management guided EBITDA margin to improve to 15-17% in Q3 and toward the higher end in Q4, aided by raw material benefits and operating leverage.
- Management expects ~1.5% gross margin expansion in H2 due to benign raw material prices and improving product mix.
- Management expects the volume-value gap to stabilize around 4-4.5% from Q4 FY27 onward as high-growth categories mature.
Risks flagged
- New entrant continues aggressive advertising and consumer schemes, which may pressure market share and pricing.
- If demand recovery post-Diwali is weaker than expected, volume and margin recovery could be delayed.
- Forex volatility and potential tariff changes (e.g., titanium dioxide anti-dumping duty) could impact gross margins.
- Increased manpower and brand spends in urban markets have not yet translated into sales growth, raising execution risk.
Key quotes
- It was a tough quarter due to excessive rains. We had a high single-digit volume growth with low value growth.
- Our guided band has been the 15%-17%. We would like to remain there. If we see that we are having the luxury of spending a little bit more, we would like to invest in brand building a bit more than what we are doing even today.
- We have increased it from last year levels almost by 22%, 23% possibly, and that's on television and digital put together.
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