BERGERPAINTSINDIA Q1 FY27 earnings call.
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Revenue
₹3,584 Cr
verified against source
Revenue YoY
12%
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 delivered a solid Q1 FY27 with consolidated revenue growth of 12% and PAT growth of ~29%, driven by strong decorative segment performance that recorded its highest growth in 12 quarters at 13.5% value growth. Standalone volume growth came in at 8.4% with 5% price impact, resulting in 12.7% value growth. Gross margin moderated to 39.3% due to delayed price pass-through in industrial business, but operating leverage helped maintain operating margins above 17%. Management guided for sustained double-digit revenue growth with Q2 expected to be slightly better than Q1, supported by full-quarter impact of industrial price increases (7.5-8.5%) and favorable monsoon conditions versus last year's heavy rains. Capex guidance stands at Rs 600-800 crore for FY27 with Panagar plant coming online by fiscal year-end. Key risks include volatile crude prices due to geopolitical developments, elevated competitive intensity from new entrants, uneven regional monsoon impact (Northeast floods, West Bengal transition), and potential post-Diwali price cuts if raw material costs decline substantially.
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Guidance to track
- Volume growth in Q2 estimated at 7.5-8% with full-quarter price increase impact of 7.5-8.5%, compared to 5% time-weighted impact in Q1. Full impact of delayed industrial price increases will flow through.
- Operating profit margin expected to be better in Q2 on YoY basis driven by operating leverage from higher value sales and improved product mix with more exterior paint sales due to favorable monsoon versus last year.
- Management expects to sustain double-digit revenue growth for full year FY27, supported by festive season demand, distribution expansion, and price increases flowing through.
- Capital expenditure guidance of Rs 600-800 crore for the year, with Panagar factory expected to come online by fiscal year-end. Second factory in Odisha near Bhubaneswar also planned.
Risks flagged
- Management acknowledged possibility of price reductions in H2 if raw material prices decline substantially and geopolitical situation stabilizes. This could trigger discounting and price wars affecting margins.
- Some dealer stock-up ahead of price increases may create inventory pressure in Q2, though management expects better sellouts to offset this impact.
- Northeast markets impacted by floods (Assam severely affected) where Berger is a clear leader. West Bengal showing muted activity due to state government transition period affecting contract decisions.
- New player has normalized dealer price lists (5% gap eliminated) and continues 10% free scheme. Competitive discounting remains elevated though has reduced from peak levels.
Key quotes
- We expect that Q2 revenue growth might be slightly ahead of Q1 revenue growth, the volume growth will be somewhere around similar levels as Q1, slightly below maybe, around 7.5% to 8% approximately, and a price increase which is there of around 7.5% to 8.5% possible.
- The decorative performance was supported by calibrated price increases implemented through the quarter. Gross margin moderated marginally primarily due to delayed and partial pass through of input cost increases in industrial business.
- The competition remains intense. As a challenger brand, they have raised their prices, dealer price list has now been equated to industry at large, but the rebating to some of the bigger dealers has gone up. So overall, the intensity has reduced but it still remains at an elevated level.
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