Berger Paints India Ltd has announced three price increases since June, which are anticipated to drive a 5% growth in value during the second quarter ending September 2024, while maintaining a volume growth target of at least 10%, according to an official statement on Monday.
Following the company’s 100th Annual General Meeting, Berger shared its goal to double its turnover to Rs 20,000 crore by 2029, up from Rs 10,000 crore in FY2024. The company plans to shut down its Howrah plant by the end of 2025, converting it into a larger research and development center after the greenfield Panagarh facility in West Bengal becomes operational.
“We saw a volume growth of 11.8% in Q1 of FY2025, but value growth was limited to 2.5% due to factors such as price reductions, lower raw material costs, and a slowdown in the luxury paints market in West Bengal and Kerala,” said Abhijit Roy, Managing Director and CEO of Berger Paints.
The price increases between June and August are expected to offset a 1.5% cost impact, resulting in a 5% growth in value during the current quarter, Roy added. Despite challenges in the luxury segment, the construction chemicals and waterproofing segments continue to perform well.
For the quarter ending June, Berger’s revenue from operations was Rs 2,806 crore, a 2.4% increase from Rs 2,740 crore in the same period last year. Roy expects gross margins to stay around 40% and EBITDA to be approximately 17% for the ongoing quarter.
Looking at the full year, the Kolkata-based company expects stronger value and growth, with plans to increase capacity by 25% by 2027 when the Panagarh and Odisha plants become fully operational. Roy also noted that Berger is largely unaffected by new market entrants, expecting strong growth in India to allow for coexistence.
The company has acquired 30 acres of land in Panagarh, with commercial production slated to begin by the end of 2025. It remains unclear how many employees from the Howrah facility will be absorbed, with others likely to be offered a voluntary retirement scheme (VRS).
Roy also mentioned that Berger’s Polish operation, Bolix, is performing well despite energy challenges in Europe due to the Ukraine war. Operations in Nepal are expected to improve this year after struggling over the past two years. At the close of the financial year, Berger’s consolidated turnover stood at Rs 11,199 crore, with standalone turnover crossing the Rs 10,000-crore mark, ending at Rs 10,003 crore.
