Berger Paints has reported a massive 36.92 percent year-on-year growth in consolidated profit for quarter ended December 2019, driven by operating income.
Consolidated profit jumped to Rs 182.35 crore during the quarter, increased from Rs 133.18 crore in year-ago period.
Revenue from operations rose 4.90 percent year-on-year to Rs 1,695.87 crore during October-December period 2019.
Earnings before interest, tax, depreciation and amortisation for the quarter ended December 2019 was Rs 296.3 crore as against Rs 250.2 crore in the corresponding quarter of the last year, representing an
increase of 18.4 percent YoY, company said in its BSE filing.
Here are the highlights of Berger Paints' earnings conference call as compiled by Narnolia Financial Advisors:
Management Participants: Srijit Dasgupta - Director-Finance, Sujyoti Mukherjee - Senior General Manager – Finance
The company’s volume growth stood at 10 percent YoY impacted on account of late monsoons. Distemper Paint (less-price) didn't perform well, putty sales and volumes of premium paint did well.
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Increase in gross margins is due to reduction in raw material prices (crude Oil) and improvement in product mix. Benefit derived from decline in crude oil price, decline won't be fully passed on by price cut, management will increase its expenditure on advertising to enhance brand.
Regarding expansion plans, Pune plant is on schedule, production will start from Q1 FY-21 (1st May-20) and new plant for Industrial coating and decorative paint is coming near Lucknow, construction work is about to start.
In domestic market, decorative business displayed modest growth for the quarter on account of late monsoons, early Diwali and general demand conditions.
The company’s automotive business continued to suffer in the quarter on account of continuous slowdown in the automotive sector. The Management expects automotive sector to revive in next 2-3 quarters.
The company’s Protective coatings business delivered robust top line growth.
The Company has launched some architectural products during the quarter.
The Profitability of JV Berger Becker Coatings Private remained impacted due to provisions made during the quarter.
The company has entered into waterproofing construction chemical and will have scientific approach towards waterproofing solution and is also seeing encouraging response.
Emulsion range (low to high price) which was launched last quarter is doing well for the company. Some of the products which are doing well are weathercoat champ, walmasta light, walmasta glow & Bison glow.
The company does not have significant impact due to Coronavirus.
For the company, new dealership continues to grow led by Tier II and Tier III cities.
Expected CAPEX for FY20 - Rs 250 crore.
Expected tax rate for FY21 - 25 percent.
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