Berger Paints Q1 FY27 Profit Surges 29%, Eyes Price Hikes

Berger Paints delivered robust financial results for Q1 FY27, with profit after tax surging by 29%, and anticipates achieving double-digit growth in the second quarter. The company’s performance comes as it considers further price adjustments, contingent on potential import duties.

Pricing Strategy and Raw Material Costs

Managing Director and CEO Abhijit Roy indicated that an additional duty on titanium dioxide imports, aimed at preventing dumping, could necessitate another round of price increases. Such a duty would elevate the cost of white paint, a significant consumer of the raw material.

Berger Paints had already implemented multiple price hikes between March and June due to escalating raw material costs, influenced by the West Asia crisis. Despite these increases, the company observed sustained robust demand from consumers.

Q1 FY27 Performance Snapshot

• Consolidated revenue from operations: ₹3,583.8 crore, a 12% year-on-year increase.
• Operating profit: Increased by approximately 15%.
• Consolidated profit before tax (PBT): Rose 18.1% to ₹542.6 crore.
• Profit after tax: Jumped 28.6% to ₹405 crore.
• Overall volume growth: Achieved 8.4%, driven by decorative paints and automotive coatings.

Festive Outlook and Growth Projections

The upcoming festive season, particularly Diwali in November, is expected to provide an extended painting window through September and October, a positive shift from the previous year. Roy projects less intense and shorter rainfall this year, which should further support consumption.

If underlying volumes expand by 7-8%, the previously enacted price increases could translate into a value growth of approximately 13-14%. This higher value growth is anticipated to bolster operating profit, provided demand remains consistent.

Margin Dynamics and FY27 Optimism

Initial raw material cost increases pressured gross margins due to the lag in passing costs to consumers, especially within industrial paints. Sustained demand is therefore crucial for translating these benefits into broader margin expansion.

The company maintains an optimistic outlook for FY27, marking a distinct improvement from FY26, which presented significant challenges for the paint industry. This positive shift is attributed to more favorable weather patterns and market conditions.