Paint major Berger Paints, on Thursday, reported about 33 per cent year-on-year (y-o-y) growth in its consolidated net profit to ₹292.13 crore for the second quarter this fiscal from ₹219.51 crore for the same period last fiscal.
The company’s revenue from operations, however, grew 3.6 per cent y-o-y at ₹2,767.30 crore during the period under review (₹2,670.92 crore), according to a stock exchange filing.
EBITDA (excluding Other Income) for the quarter was ₹473.65 crore (₹363 .95 crore), an increase of 30.14 per cent.
Delayed festive season
Commenting on the results, Abhijit Roy, MD & CEO, Berger Paints India, said the company reported a double-digit volume growth in the decorative segment with lesser value growth as sale of low-end and commodity items was high during this quarter.
“Due to delayed festive season and rains in September, the sale of topcoats, especially exterior coatings, was heavily impacted,” Roy said, adding the company was expecting sales to improve considerably in the third quarter.
“We continue to work firmly on network expansion and implementation of key digital initiatives, which should bear fruit in the months ahead. The general industrial and powder coatings vertical witnessed robust value growth with strong showing on the profit front as well,” Roy added.
Notably, paint demand for the industry was soft in the second quarter, as high rains impacted exterior paints and the month of September saw a shift in festival demand to Q3FY24, domestic brokerage Nuvama Institutional Equities said in its note on Berger Paints in October.
“In Q2FY24, we expect Berger Paints to see a good y-o-y margin recovery, but y-o-y sales and volume growth would be muted due to irregular monsoon, shift in festival demand to Q3FY24 and high base,” the brokerage firm said in its note.
With falling raw materials costs, the company’s gross and EBITDA margins were expected to improve y-o-y for Q2 of the current financial year.
On Thursday, Berger Paints India’s stock closed at ₹548.80 apiece on the BSE, down 0.16 per cent from the previous close.