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Berger Paints hopes to see a turnaround as raw material prices cool off

Berger Paints is hopeful that the softening of raw material prices being seen now will lead to profitability improvement in the second half of the year. The company is happy with its urban market demand but is hoping for an uptick in the rural market.

By Mangalam Maloo  November 11, 2022, 5:13:44 PM IST (Published)

Berger Paints posted a healthy 20 percent revenue growth in the second quarter of the ongoing financial year that ended in September but the gross margin was down 300 bps owing to high raw material costs.

The management is hopeful that the softening of raw material prices being seen now will lead to profitability improvement in the second half of the year. The company is happy with its urban market demand but is hoping for an uptick in the rural market.




Abhijit Roy, the MD & CEO of the company, told CNBC-TV18, in an interview after the earnings, "Urban demand was better than the rural areas. And we expect that the rural will also pick up now in the second half of the year."

Berger Paints is hopeful of an improvement in gross margin going forward.

"As far as the volume growth is concerned, we registered a volume growth of around 11 percent in quarter two with value growth of around 22.5 or 23 percent," he added.



Berger Paints expects to see an approximate 10 percent volume growth in the remaining fiscal.

"The volume value difference will however decrease because in the last year all the price increases had happened towards November. We finished off most of it. So therefore the volume value gap will go down substantially. This quarter it was 12 percent. Next quarter, it will be much lesser than that," Roy said.

For the full interview, please watch the video