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Please refer to important disclosures at the end of this report
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Berger Paints is the second largest player in the domestic decorative paints
industry. It has 11 manufacturing facilities which is spread across India and
abroad. The company holds a sustained performance with 5 years CAGR of
10.2% in revenues and 14.5% in profit.
During 1QFY19 also the company’s sales increased by 15.7% to `1,716cr.
This growth was aided by price hike as well as rise in volumes pushed by tier
-2 & 3 cities. The company further focuses on these cities, which derives
demand for the company core revenue earning product – decorative paints.
During the quarter EBITDA margin also widened by 163bps supported by
lower raw material cost on account of fall in crude oil prices.
On the balance sheet front also the company has managed it financials well
with reducing debt burden each year. Debt-equity ratio has been brought
down to 0.2x in FY19 from 0.6x in FY14. It also delivers strong ROE of
21.3% and trades at 13.4x of its book value. The company also pays
attractive dividend averaging to 35%. Hence, BUY.
BUY
CMP `366
52 Week High / Low
373/260
Avg. Daily Volume
44,163
Paints/Varnish
Market Cap (` cr)
35,548
1
BSE Sensex
36,093
Nifty
10,705
Face Value (`)
Reuters Code
BRGR.BO
BRGR IN
0.8
Jaikishan Parmar
022 – 3935 7600 Ext: 6810
jaikishan.parmar@angelbroking.com
Berger Paints India Ltd
Others |Paints
Sept 19, 2019
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Berger Paints India Ltd| Paints
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Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Berger Paints Ltd
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)