Berger Paints India Ltd, which hopes to achieve ₹10,000-crore sales by FY24, is confident of meeting the target a year in advance — by the end of the current financial year — fuelled by good demand and support from the price hike over the last few quarters.
According to Abhijit Roy, MD and CEO, Berger Paints, the first Berger factory was established in West Bengal in December 1923 and the company will complete 100 years in December 2023. The ₹10,000-crore target was set to coincide with the same.
The company clocked net sales of ₹8,762 crore during FY22 on a consolidated basis. Nearly 80 per cent of its sales comes from decorative paints, while the rest comes from the industrial segment which includes protective, automotive and other segments.
“The demand (for paints) has been strong despite the price hikes. While it is difficult to predict how the demand will pan out in Q3 and Q4; given that the monsoons have been decent, economy has been stable so far and Covid has been fairly under control, we should see a double-digit growth in volume sales. We will cross the ₹10,000-crore mark this year because of good demand and the price rise,” Roy told BusinessLine.
The company registered nearly 54 per cent growth in standalone revenue from operations at ₹2,489 crore during the quarter ended June 30, 2022, as against ₹1,619 crore in the corresponding quarter last year.
The culmination of ongoing activities including the launch of many products (Luxol, PU Enamel, Longlife Flexo and economy offerings in the undercoat category), renewed focused on distribution expansion coupled with robust consumer demand led to the growth in sales during the quarter.
Berger Paints, Roy said, has undertaken a price hike of around 20 per cent in phases since July 2022. So the net impact of the price hike was visible during the first quarter over the low base of the same period last year. While the impact of price hike will be seen in the second quarter to some extent, it may get neutralised in the third and fourth quarter since prices are expected to be fairly stable moving forward.
“Raw material prices have fairly stabilised and some have even started moving down. However, it is still difficult to predict at this stage since there is volatility in oil prices,” he said.
The company plans to introduce a new range of products aimed at the waterproofing segment during the current fiscal.
Berger’s biggest plant, coming up at Lucknow in Uttar Pradesh at an estimated investment of around ₹1,000 crore, is expected to go on stream by November. The company also plans to set up another unit at Panagarh in West Bengal.
It is hopeful of firming up on the amount of investment on the plant by the end of the current financial year.