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Paint major Berger paints reported a 5.6% growth in consolidated profits as profit stood at Rs 220.29 crores for the quarter ended in March 2022 against Rs 208.60 crores for the corresponding quarter last year.
Revenue from operations grew 8% from Rs 2,026.09 crores in Q4FY21 to Rs 2,187.51 crores this quarter. However, total expenses reported higher growth as expenses surged 9% to Rs 1,915.43 crores during the quarter. The company had an operating margin of 16.6% even though the company faced high input costs due to improved sales of premium paints.
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For the full fiscal ended on 31st March 2022, the company reported a profit of Rs 832.95 crores, 15.73% higher than last year as revenues jumped 28% to reach Rs 8,762 crores.
In an interview, the MD & CEO of Berger paints mentioned the 50+% growth the company witnessed last year and attributed the same to two large projects. He also added that if the base effect of the two projects are removed, the company managed to post a growth of 18-19% this quarter.
Speaking about future plans, he said that the company's plant in Lucknow, worth around Rs 1,000 crores, which is their biggest plant, will be operable from September and will improve production greatly to cater to market demand and expects an earning of Rs 10,000 crores or more in the near future.
The shares of Berger paints witnessed a sharp decline of 7.2% in a single day when Grasim announced that it was doubling its CAPEX for its foray into the paint business. That day, the share touched a low of Rs 560.15, a price level the stock hadn't contracted to since September 2020. After the announcement of the results, the company shares saw a marginal improvement of 1.3% to close at Rs 575.25 per share.
Article by Aman Agarwal.
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