Buy Berger Paints - Dolat Capital

- We continue to prefer paints sector over other consumer segments on back of sustained volume growth and huge opportunity of consumer up-trading. And our preference for Berger continues driven by management to focus on 'premiumising' its product categories, and improving margins.

- We estimate revenue and net earnings CAGR of 15% and 20% respectively during FY12-15E. The stock trades at 19.7x FY14E EPS of Rs.7.5 and 16.6x FY15E EPS of Rs.8.9. We have a price target of Rs.175 (20x FY15E).

- Berger Paint is focusing on converting its product portfolio towards the premium category from the current mid range segment. This focus on improving brand communication through new advertising campaign, shall in our opinion, improve its positioning in the premium segment.

- Berger Paint is expanding its capacity 250,000 tonnes to half a million tonnes over the next three years. This shall be internally funded, and help it to sustain market share.

Source : Equity Bulls

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