(Reuters) – Berger Paints India’s third-quarter profit fell less than analysts’s had expected on Tuesday, as strength in the industrial business helped cushion demand weakness from inflation-hit retail consumers.
The company’s consolidated net profit fell 1.5% to 2.95 billion rupees ($34 million) in the quarter, but came above analysts’ average estimate of 2.91 billion rupees, according to data compiled by LSEG.
Revenue from operations rose 3.2% to 29.75 billion rupees, surpassing analysts’ average estimate of 29.52 billion rupees.
Strong volume growth in the industrial segment, which contributes 20% of Berger’s topline, helped it partially mitigate “muted urban demand” for its decorative paints – used to paint house walls.
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KEY CONTEXT
Indian paintmakers have been offering heavy discounts since Grasim Industries’ foray into the sector early last year tightened competition, and cash-strapped shoppers chose cheaper, private brands.
Smaller peers Kansai Nerolac and Akzo Nobel India forecast demand pick-ups, led by the federal government’s consumption boosting measures. In contrast, market leader Asian Paints’ blamed urban stress and also issued a grim outlook.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
Berger Paints India 43.82 27.72 9.59 9.29 Hold 20 0.95 0.72
Asian Paints 47.40 32.01 5.73 3.53 Hold 34 0.93 1.43
Kansai Nerolac 26.83 16.93 7.69 13.39 Hold 12 0.84 1.03
Paints
Akzo Nobel India 34.95 22.45 8.03 9.76 Buy 2 0.93 3.08
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell ** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER-DECEMBER STOCK PERFORMANCE
— All data from LSEG — $1 = 86.7400 Indian rupees
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Sherry Jacob-Phillips and Savio D’Souza)
