Berger Paints India misses Q2 profit view as higher rainfall, price hikes dampen demand

Berger Paints India

05/11/2024 12:05

Nov 5 - Berger Paints India  BRGR.NS  reported a bigger-than-expected drop in second-quarter profit on Tuesday,
as above-average rainfall and price hikes dampened demand.
        The company's consolidated net profit fell 7.5% to 2.70 billion rupees (about $32 million) in the July-September
quarter, lower than analysts' estimate of 2.84 billion rupees, per data compiled by LSEG.
  
        Revenue from operations rose 0.3% to 27.75 billion rupees, lagging behind analysts' expectations of 28.37
billion rupees.
  
    For further earnings highlights, (click here)

KEY CONTEXT

    Paint makers, including Berger, hiked prices by up to 2.5% in the second quarter as domestic competition intensified
with Grasim Industries  GRAS.NS  entering the sector earlier this year. 
  
        India also saw higher-than-normal rainfall, which lashed Berger's key markets including Andhra Pradesh, Kerala
and West Bengal, resulting in flooding and lacklustre sales. 
  
    The company, India's second-largest paint maker by market capitalisation, is the first among its peers to report
second-quarter results.
    Kansai Nerolac  KANE.NS , Akzo Nobel India  AKZO.NS  and market leader Asian Paints  ASPN.NS  are set to report
results later this week.
    
PEER COMPARISON 
    
                                 Valuation (next 12    Estimates (next 12      Analysts' sentiment              
                                 months)               months)                                                  
                      RIC        PE     EV/EBITDA      Revenue     Profit      Mean     No. of   Stock to       Div
                                                       growth (%)  growth (%)  rating*  analyst  price          yield
                                                                                        s        target**       (%)
 Berger Paints India   BRGR.NS   48.39  30.50          8.59        7.22        Sell     19       1.03           0.65
 Asian Paints          ASPN.NS   52.89  36.07          7.53        1.53        Hold     34       1.02           1.13
 Kansai Nerolac        KANE.NS   29.61  18.95          7.60        18.80       Hold     11       0.89           0.88
 Paints                                                                                                         
 Indigo Paints         INDG.NS   46.18  27.22          14.84       12.92       Buy      6        1.05           0.21
 
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above
the PT
    
JULY-SEPTEMBER STOCK PERFORMANCE 
    
    
-- All data from LSEG IBES
-- $1 = 84.0660 Indian rupees

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Berger Paints Q2 vs peers    https://tmsnrt.rs/3YsmQUg
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 (Reporting by Hritam Mukherjee and Manvi Pant in Bengaluru; Editing by Sumana Nandy)
 ((Hritam.Mukherjee@thomsonreuters.com; Twitter: @MukherjeeHritam;))