HDFC Securities: Berger Paints - Catalysts Missing For A Performance Encore
A worker mixes paint to color zipper sliders during production at manufacturing facility. (Photographer Meg Roussos/Bloomberg)

HDFC Securities: Berger Paints - Catalysts Missing For A Performance Encore

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

HDFC Securities Report

Berger Paints India Ltd. has gone toe-to-toe with dominant leader Asian Paints Ltd. over FY10-20 despite the former's higher industrial salience, implying that its decorative biz has outpaced Asian Paints.

Growth has been smartly navigated alongside improving profitability via aggressive product innovation/premiumisation, efficient marketing and distribution expansion (gross margin/Ebitda and management fees differential has reduced from 856/924 basis point to 320/560 basis point over FY10-20).

While this narrative will continue, out performance is unlikely to be as steep over FY20-23, given that -

1. Berger Paints will have to contend with Asian Paints stepped-up aggression at the bottom of the pyramid and 2. margin levers seem to be missing.

Click on the attachment to read the full report:

HDFC Securities Berger Paints Initiating Coverage.pdf


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