Q3FY21 Result Update - Berger Paints India - ICICI Direct

Berger's Q3FY21 performance was much ahead of our expectations on all fronts. Overall volume growth at ~28% was largely led by decorative segment wherein rural and semi urban regions have witnessed a continuous trend of strong demand supported by the festive season. On the other hand, a strong recovery in automotive sales helped in a robust revival in the performance of industrial paints (~15% of topline). The management has reiterated strong growth momentum will continue in Q4 led by uptick in urban demand and a favourable base. We believe volume growth for Berger would be in line with market leader Asian Paints at 13% in FY20-23E supported by market share gains and reduction in repainting cycles. On the margin front, we believe EBITDA margin will normalise, going forward, with a recovery in input prices and restoration of overheads.

Valuation & Outlook

While we maintain our positive stance on the stock, the recent rally in the stock factors in most of the positives. We maintain our HOLD rating on the stock with a revised target price of Rs. 810/share (earlier TP Rs. 675).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_BergerPaints_Q3FY21.pdf

Shares of BERGER PAINTS INDIA LTD. was last trading in BSE at Rs.770 as compared to the previous close of Rs. 771.55. The total number of shares traded during the day was 113122 in over 1856 trades.

The stock hit an intraday high of Rs. 772.5 and intraday low of 754.05. The net turnover during the day was Rs. 86216432.

Source : Equity Bulls

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