Berger Paints India misses Q2 earnings view on delayed festivals, poor monsoon

Berger Paints India

02/11/2023 09:35

BENGALURU, Nov 2 (Reuters) - Berger Paints India
 BRGR.NS  on Thursday reported lower-than-expected
second-quarter earnings, as a weak monsoon and delayed
festivities offset cooling raw material costs.
    Consolidated net profit rose nearly 33% year-on-year to 2.92
billion rupees ($35.1 million) for the quarter ending Sept. 30,
but fell short of analysts' estimate of 3.08 billion rupees as
per LSEG data.
    Berger's revenue grew 3.6%, its slowest in 12 quarters, and
also missed analysts' estimates.
    Analysts had expected paint companies' sales to be impacted
due to erratic distribution of monsoon rains and delayed
festivities. India's monsoon this year was its lowest since
2018.
    While Berger's decorative segment posted a double digit
volume growth, the sale of exterior paints - used to protect
walls from environmental deterioration - was heavily impacted
due to delayed festive season and rains in September, CEO
Abhijit Roy said in a statement.
    Raw material costs, which account more than 60% of the total
expenses, fell nearly 6%, but lower revenue growth impacted
profits at India's second-biggest paint company by revenue.
    Prices of key raw materials for paint companies, such as
titanium dioxide and vinyl acetate monomer, declined 6.4% and
44.4% respectively, while crude oil prices fell 7.6%, ICICI
Securities said in a pre-earnings note.
    Rival Asian Paints  ASPN.NS  last month reported improved
margins, though it missed profit estimates, while Kansai
Nerolac's  KANE.NS  profit rose led by a fall in expenses.    
    
($1 = 83.2290 Indian rupees)

 (Reporting by Ashish Chandra in Bengaluru; Editing by Varun H
K)
 ((ashish.chandra@thomsonreuters.com; +91 7982114624;))