Berger Paints India misses Q2 profit view as higher rainfall, price hikes dampen demand
Nov 5 -Berger Paints India BRGR.NS reported a bigger-than-expected drop in second-quarter profit on Tuesday, as above-average rainfall andprice hikes dampened demand.
The company's consolidated net profit fell 7.5% to 2.70 billion rupees (about $32 million) in the July-September quarter, lower than analysts' estimate of 2.84 billion rupees, per data compiled by LSEG.
Revenue from operations rose 0.3% to 27.75 billion rupees, lagging behind analysts' expectations of 28.37 billion rupees.
For further earnings highlights, (click here)
KEY CONTEXT
Paint makers, including Berger, hiked prices by up to 2.5% in the second quarter as domestic competition intensified with Grasim Industries GRAS.NS entering the sector earlier this year.
India also saw higher-than-normal rainfall, which lashed Berger's key markets including Andhra Pradesh, Kerala and West Bengal, resulting in flooding and lacklustre sales.
The company, India's second-largest paint maker by market capitalisation, is the first among its peers to report second-quarter results.
Kansai Nerolac KANE.NS, Akzo Nobel India AKZO.NS and market leader Asian Paints ASPN.NS are set to report results later this week.
PEER COMPARISON
Valuation (next 12 months) | Estimates (next 12 months) | Analysts' sentiment | ||||||||
RIC | PE | EV/EBITDA | Revenue growth (%) | Profit growth (%) | Mean rating* | No. of analysts | Stock to price target** | Div yield (%) | ||
Berger Paints India | BRGR.NS | 48.39 | 30.50 | 8.59 | 7.22 | Sell | 19 | 1.03 | 0.65 | |
Asian Paints | ASPN.NS | 52.89 | 36.07 | 7.53 | 1.53 | Hold | 34 | 1.02 | 1.13 | |
Kansai Nerolac Paints | KANE.NS | 29.61 | 18.95 | 7.60 | 18.80 | Hold | 11 | 0.89 | 0.88 | |
Indigo Paints | INDG.NS | 46.18 | 27.22 | 14.84 | 12.92 | Buy | 6 | 1.05 | 0.21 | |
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
-- All data from LSEG IBES
-- $1 = 84.0660 Indian rupees
Berger Paints Q2 vs peers https://tmsnrt.rs/3YsmQUg
Reporting by Hritam Mukherjee and Manvi Pant in Bengaluru; Editing by Sumana Nandy
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