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Berger Paints slips 3% on posting Q1 results; should you buy, sell or hold?
The paint company posted its Q1 results during market hours on Tuesday. Post that, the stock closed 0.5 per cent higher at ₹572.5 per share.
Berger Paints Q1 results
Berger Paints reported an 11 per cent year-on-year (Y-o-Y) decline in first-quarter net profit to ₹315.04 crore, as compared to ₹354.03 crore a year ago.
Revenue for the quarter under review came in at ₹3,200.76 crore, as compared to ₹3,091.01 crore a year ago, up 3.55 per cent.
Besides, the decorative segment delivered mid single-digit volume growth; the volume-value gap narrowed, driven by improved mix and waning impact of prior price corrections.
Gross margins remained stable across quarters inspite of increased competition. In Q1FY26, the gross margin stood at 40.1 per cent, 41.2 per cent in Q4FY25 and 39.3 per cent a year ago.
Berger Paints earnings call highlights:
The company aims to remain at 15–17 per cent Earnings before interest, tax, depreciation and amortisation (Ebitda) margin range. In standalone, it is operating Ebitda margins is expected above 17 per cent.
Recovery shall come post monsoon, which will aid in the pickup of value as well as volume growth momentum. Management expects 7–9 per cent volume growth postmonsoons.
Volume-value gap in the next three quarters is likely to remain at 1.5–2 per cent largely due to a mix of the products. If everything goes well, the company expects value growth to potentially reach the 9–10 per cent range in Q3/Q4FY26.
From Q4FY26, Berger Paints expects an urban recovery to aid in overall revenue growth.
In the earnings call, Berger highlighted that the initial dealer enthusiasm for new competitors has faded as expanded networks led to reduced margins.
Nuvama Institutional Equities has maintained a 'Buy' and raised the target to ₹670 per share from ₹660 as the brokerage expects a gradual recovery in demand going ahead. InCred Equities has maintained 'Hold' on Berger Paints and has increased its target to ₹620 from ₹600. While the paint industry has been reeling from intense competition, the brokerage expects Berger to continue to outperform the industry in the medium. term
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