(Reuters) -Berger Paints India reported quarterly results above expectations on Wednesday, with strong industrial demand cushioning retail weakness.
Its shares rose 2.5% in the afternoon trading.
“The tough market conditions continued into the fourth quarter with muted urban demand and increased competitive intensity,” said CEO Abhijit Roy. “The industrial segment… saw resilient performance, which bodes well for us in the months ahead.”
Consolidated net profit rose to 2.62 billion rupees ($30.7 million) during January to March, up 18% on year. Analysts on average had expected a profit of 2.43 billion rupees, per data compiled by LSEG.
Revenue from operations rose over 7% to 27.04 billion rupees, surpassing estimates.
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KEY CONTEXT
Indian paintmakers have been battling weak consumer spending sentiment for a few quarters amid increased competition in the sector following the entry of Grasim Industries.
Analysts have flagged that players with a more diversified customer base, such as Berger, are better-placed in a soft retail environment.
Last week, market leader Asian Paints forecast that the worst demand scenario in decades is likely to persist in the near term, while peer Kansai Nerolac posted a surprise profit fall.
PEER COMPARISON
Valuation (next Estimates (next 12 Analysts’ sentiment
12 months) months)
RIC PE EV/EBITDA Revenue Profit Mean # of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
Berger Paints 49.94 31.23 8.54 8.79 Hold 20 1.09 0.65
India Ltd
Asian Paints Ltd 48.00 32.75 5.08 8.09 Sell 33 1.00 1.05
Kansai Nerolac 28.86 17.62 7.63 34.61 Hold 12 0.92 0.96
Paints Ltd
Akzo Nobel India 33.40 21.12 8.75 11.10 Buy 2 0.89 3.19
Ltd
* 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
JANUARY-MARCH STOCK PERFORMANCE
— All data from LSEG
— $1 = 85.2675 Indian rupees
(Reporting by Hritam Mukherjee in Bengaluru)
