Shares of Berger Paints rose over 8 percent in the early trade on Friday on good fourth-quarter results and steep fall in crude oil prices. The company reported a 4.91 percent jump in its consolidated net profit to Rs 111.43 crore in Q4 as against Rs 106.21 crore in the same quarter last year. Oil prices falling to lower levels in 3 months also lifted the stock.
Abhijit Roy, MD and CEO of Berger Paints shared his views and outlook.
Crude is one of the factors but overall the demand seen has been reasonably good given the current situation, Roy said.
In terms of demand, Roy said, “It is double-digit volume growth that we delivered in last quarter. From the value growth figure, it is around 13-14 percent. I presume that it will move up further in the first half. So as a whole if you look at it, in the mid-teens is what I would look at in terms of value growth even in the first half.”
“Most of our sales come out of the decorative segment. The protective coating also is doing well. Auto general industry’s division is not doing well. That is in trouble. Since that part is very small for us, we are reasonably well-placed,” said Roy.
Regarding price hikes and margins, he said, “About 2.5-3 percent values due to price. The rest is on account of volume growth. Margins will be higher than the revenue growth. If the revenue growth is in the mid-teens then it will be about a few percentages higher in terms of operating profits.”
On expansion plans, Roy also said, “As far as expansion plans are concerned, one Jejuri near Pune is onstream and it will kick-off production from July 1. One Greenfield plant is coming up near Lucknow in Uttar Pradesh which will be our biggest plant in India. That will kick-off operation from 2020 maybe around October, November.”