Berger Paints India delivered robust fourth-quarter results with net profit rising 27.52% year-on-year to ₹335.25 crore, compared with ₹262.91 crore in the corresponding period last year, according to the company's exchange filing. The paint manufacturer demonstrated strong operational efficiency with revenue from operations growing 6.1% to ₹2,868.03 crore from ₹2,704.03 crore a year earlier. EBITDA increased 12.6% year-on-year to ₹481.7 crore, while operating margin expanded to 16.8% from 15.8% in the corresponding quarter last year, indicating improved business fundamentals. As per The Economic Times, the company achieved healthy volume growth of 11.8% for the quarter, supported by qualitative improvement in product mix and softening of raw material prices. Total expenses were higher at ₹2,499 crore compared to ₹2,380.55 crore in the previous year, reflecting the company's investment in growth initiatives.
The company achieved gross margins of 42.3% for the March quarter, marking the highest in three fiscals. According to The Economic Times, gross margins improved sequentially and year-on-year, aided by favourable mix enrichment, waning impact of economy segment price cuts, and partial benefit from withdrawal of anti-dumping duty on TiO₂. Standalone EBITDA margin expanded 173 basis points year-on-year to 18.3%, while standalone gross margin expanded 108 basis points to 42.3%, representing a 12-quarter high. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 12.6% to ₹481.7 crore, while the company maintained strong operational metrics throughout the quarter.
Berger Paints has undertaken three price hikes since the start of April, with a fourth expected on 15 May, as CEO and MD Abhijit Roy revealed during post-earnings interactions. The company expects these staggered price increases to support margins and offset rising raw material costs. The company has undertaken cumulative price hikes of 11-12% in Q1FY27 to offset raw material inflation of approximately 22%. Shares of Berger Paints closed nearly 1.3% lower at ₹488.8 apiece on the BSE ahead of the results, compared to a 1.9% drop in the benchmark Sensex, as reported by The Economic Times. However, the stock rallied 7.29% to ₹523.35 on Wednesday morning following the Q4 results announcement, reflecting positive market sentiment towards the strong performance.
Decorative volumes rose 11.8% year-on-year in Q4, marking an eight-quarter high compared to 7.4% growth in Q4FY25, as reported by Elara Securities. Secondary volume growth stood at approximately 8% while the remaining 400 basis points growth was attributed to channel stocking ahead of price hikes. Demand recovery momentum sustained through Q4FY26 with sequential improvement in both decorative and industrial segments, led by premium emulsions, automotive, and GI businesses. El Niño is expected to result in more painting days and relatively stable competitive intensity compared to earlier periods. The company expects value growth to outpace volume growth in FY27 while maintaining EBITDA margin guidance of 15-17%.
Multiple brokerages have reviewed the stock following the Q4 results announcement. Centrum gave a Neutral rating with target price of ₹550, while Nirmal Bang calls for Hold with a target price of ₹535. Nuvama maintained Buy with a target price of ₹635 (earlier ₹605), and Elara maintained Accumulate with a target price of ₹553 (vs ₹500 earlier). The stock trades at 41x/36x/32x FY27E/28E/29E PE multiples. FY27/FY28 EPS estimates have been increased by 2.7% and 3.8% respectively by brokerages. The company expects positive turnaround for legacy paint players in FY27 led by double-digit revenue growth that shall aid operating leverage, though El Niño remains a risk for rural consumption in H2FY27.
