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Informist, Wednesday, Feb. 4, 2026

 

By Adhithya Aji

 

MUMBAI - Berger Paints Ltd.'s December quarter earnings are expected to be subdued on a year-on-year basis despite steady volume growth. The pricing pressure in the company's largest segment due to higher competition is expected to weigh down the bottom line, according to brokerages tracking the company.

 

The paint-maker is expected to report a consolidated net profit of INR 2.79 billion for the December quarter, down over 5% on year but up 35% sequentially, according to the average of estimates from six brokerages. The highest estimate for the bottom line is INR 3.11 billion from Elara Securities (India) Pvt. Ltd. and the lowest is INR 2.56 billion from Systematix Shares and Stocks (India) Ltd.

 

The company's revenue is seen at INR 30.39 billion, up over 2% on year and over 7% sequentially, according to the average of estimates. The estimates for top line range from a high of INR 30.64 billion from Nirmal Bang Equities Pvt. Ltd. to a low of INR 29.90 billion from Nuvama Wealth Management Ltd.

 

"Pricing pressure continues, particularly in the premium segment, keeping realisations flat to marginally negative despite benign raw material costs," Nirmal Bang said. The management comments indicate a gradual improvement in volumes in the latter part of the quarter despite high competition, the brokerage said.

 

Brokerages expect the volume growth to range from 6% to 10% on year. The decorative paints segment is expected to post a volume growth of 7% on year and industrial coatings volume growth is expected at 4.5% on year, Kotak Securities said. The decorative paints segment, which makes exterior and interior painting products, is the largest segment of the company. It contributed 80% to the total standalone revenue in 2024-25 (Apr-Mar).

 

Berger Paints' gross margin is expected to expand 40 basis points on year to 42% due to soft raw materials costs, Kotak Securities said. International crude oil prices were down 6% sequentially and 10% on year, according to the brokerage. Systematix said the margins would improve sequentially and on year on account of lower crude oil and titanium dioxide prices. Titanium dioxide is a white pigment used in paints and coatings to provide maximum brightness. In the year-ago quarter, the company had reported a gross margin of 39.8%.

 

The company's earnings before interest, tax, depreciation, and amortisation is pegged at INR 4.50 billion, according to the average of estimates. The estimates for EBITDA range from a high of INR 4.73 billion from Elara Securities to a low of INR 4.20 billion from Systematix.

 

The company's EBITDA margin is seen at 14.6%, down 130 basis points on year, according to Kotak Securities. This is due to adverse operating leverage and higher operating costs on account of brand spends and higher manpower required in urban markets, the brokerage said.

 

The company will detail its December quarter results Thursday. Higher competition, distribution expansion, salesforce expansion, and urban growth are the key points to monitor, Systematix said.

 

On Wednesday, shares of the company closed flat at INR 480.10 on the National Stock Exchange. The stock has fallen 12% since the announcement of the September quarter earnings.

 

Of the nine brokerage reports available on the company, six have a 'buy' recommendation on the stock with an average target price of INR 612 and two have a 'hold' recommendation. The remaining one has a 'sell' recommendation on the stock. The average target price for the 'buy' calls is nearly 28% higher than the current market price.

 

Following are the Oct-Dec earnings estimates for Berger Paints from six brokerages in descending order by the estimate of net profit in INR billion:

 

Brokerage	Net Sales	Net Profit	EBITDA
Elara Securities (India) Pvt Ltd	30.56	3.11	4.73
Nomura Equity Research	30.14	2.85	4.60
Nirmal Bang Equities Pvt Ltd	30.64	2.78	4.66
Kotak Securities Ltd	30.50	2.76	4.44
Nuvama Wealth Management Ltd	29.90	2.69	4.40
Systematix Shares and Stocks (India) Ltd	30.62	2.56	4.20
Average	30.39	2.79	4.50

 

End

 

Edited by Ashish Shirke

 

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