CMP: €548.90
Berger Paints India (Berger) is the second largest paint company in the domestic market, with 12 strategically located manufacturing units and a nationwide distribution network of over 25,000 dealers.
In Q2FY26, consolidated revenue grew by a marginal 1.9 percent year-on-year to ₹2,827 crore on the back of the monsoon and continued competitive intensity. Despite the bad weather, Berger achieved volume growth of 8.8 percent, while value grew by 1.1 percent thanks to the larger contribution from tile adhesives.
EBITDA fell 18.9 per cent to ₹352 crore due to higher sales and other expenses. Accordingly, EBITDA margin shrank by 310 basis points to 12.5 percent.
Management reiterated its confidence in a stronger second half and cited this as a key driver. Gross margin is expected to improve, aided by favorable raw material prices and an improving product mix.
During the quarter, Berger’s sales growth was impacted by the extended monsoon season, resulting in a modest increase in sales. The company’s margins and profitability were also affected by higher costs and expenses.
However, the company continued to expand its retail presence, adding new stores and increasing its overall footprint. The sector’s competitive landscape has stabilized and demand is expected to pick up in the coming months, driven by improved weather conditions and the release of pent-up demand.
This is expected to contribute to the company’s overall revenue growth, margin and profitability. Therefore, we upgrade our rating on the stock to ‘Buy’, with a revised price target of ₹628, based on 55x FY27E adjusted earnings per share.
Published on December 10, 2025
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