According to reports from Business Standard, Berger Paints has successfully offset rising raw material costs through strategic price increases. The company's price hikes of 10-11% have nearly neutralised the impact of 20% increase in raw material prices due to oil-led inflation. Raw materials account for approximately 60% of total cost of sales, making the overall impact around 12% on profitability. The company is also implementing formulation efficiencies and better sourcing strategies to maintain profitability levels. As Berger Managing Director and CEO Abhijit Roy told People, while there are no signs of demand softening at present, it might be the case if the current situation persists for longer.
As reported by Business Standard, Berger Paints experienced a 27% year-on-year profit growth in Q4FY26, marking a recovery from challenging earlier quarters. The second and third quarters of FY26 were impacted by excessive rainfall for an extended period, which affected the entire industry with lukewarm growth rates. The product mix shifted to lower-value materials as exterior paints and roof coatings could not be used during the rainy season. However, Q4 showed significant improvement with growth picking up and profitability improving after the rains. In Q1FY27, the company expects volumes to remain at levels similar to the previous quarter due to ongoing geopolitical uncertainties, but anticipates value growth to remain in double digits despite potential volume growth moderation.
According to Business Standard, the West Asia conflict has led to a sharp rise in crude oil prices, creating mixed impacts across different raw material categories. Solvents, which are completely oil-based, have seen prices increase by 30-35%, while other categories experienced 8-10% price increases. The overall impact on raw material costs has been substantial at approximately 20%. The company expects no further price increases unless oil prices rise further, with some potential need for price adjustments in solvent-based products while keeping consumer capacity to absorb price increases in mind.
As reported by Business Standard, Berger Paints expects Q1FY27 volumes to remain at levels similar to the previous quarter due to ongoing geopolitical uncertainties. The company anticipates value growth to remain in double digits despite potential volume growth moderation. Construction work for the Odisha plant is scheduled to start from next year and remains on track, while the Panagarh plant in West Bengal has been put on hold pending review of the new industrial policy. The company aims to achieve ₹20,000 crore turnover by 2031, up from the current ₹12,000 crore and projected ₹14,000 crore for this year.
