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Informist, Monday, Aug 12, 2024

By Avishek Rakshit

KOLKATA – Berger Paints India Ltd expects to report a 10% year-on-year growth in volume in the ongoing quarter on the back of price increases undertaken in July and August, and anticipates around 5% improvement in its topline, Managing Director and Chief Executive Officer Abhijit Roy said.

"Due to the price increases undertaken, the revenue growth is expected to be slightly better than the previous year and the previous quarter, maybe at around 5%, and the volume growth is expected in double-digits, which could be 10%," Roy told mediapersons after the company held its 100th Annual General Meeting today.

For the ongoing financial year ending March as well, the company expects to post volume growth in double digits, along with an improvement in profitability. Roy said that Jan-Mar was a weak quarter and hence, the anticipated performance in the same months of the current financial year is expected to be stronger. Aided by the price increases, the profitability of the company will keep improving, Roy said. By 2029, the company is aiming to grow its topline to 200 bln rupees from the current 110 bln rupees.

During Apr-Jun, Berger Paints reported a strong 11% on-year growth in volume, but it did not adequately reflect in its topline, which grew only 2.4%. Roy said it was on account of the price cuts taken after raw material prices fell, muted demand conditions in the core markets in West Bengal and Kerala, and higher sales of low-priced construction chemicals products.

Berger Paints undertook a cumulative price hike of 2.5% over July and August. Roy said that in the recent past, raw material prices had shot up 1.5%, leading to cost pressures. "The price hike will help us mitigate the raw material inflation and also some portion of the price increase will help fund the expenses on advertising," he said.

Following the entry of the Birla Opus brand of paints from rival Aditya Birla group, Berger Paints has stepped up its advertising and is expected to spend more to increase its market share and maintain a hold on existing markets.

Responding to a question from Informist about whether Birla Opus, which is priced lower than Berger Paints, will gain market share, Roy said, "The customer does not look at the price alone. It is consistency, brand image, and what the influencers say." In the paints industry, influencers do not mean celebrities but contractors who paint the customers' homes or offices.

"If raw material prices hover at around the current levels, then no more price increase will be needed for the remainder of the year, but the situation is volatile internationally. War is going on in Ukraine, shipping costs have increased due to the problem at Red Sea; so we need to wait and see how raw material prices react," Roy said.

In the paints industry, crude petroleum and its derivatives, solvents, and titanium dioxide are the key raw materials.

Today, shares of Berger Paints closed 1.1% down at 526.1 rupees on the National Stock Exchange. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Tanima Banerjee

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