1
Please refer to important disclosures at the end of this report
1
1
Berger Paints India Ltd. is the second largest decorative paint player in India with
a market share of ~ 19%. The company is focusing on new products
development along with improving brand visibility by higher ad spends. This has
helped to garner market share in higher margin premium products and aided
margins of the company. Also, the company is increasing its dealership network
in rural area to increase distribution reach which will aid sales growth in future.
In order to cater to increasing demand, the company is setting up an integrated
paint plant at Naltoli, with an annual capacity of 24,000 KL of water based
paints and 13,200 KL of solvent based paints. In addition, the British Paints
Division of the Company is setting up a distemper and putty manufacturing
facility in Nalbari near Guwahati with a capacity of 1,200 MT and 6,000 MT per
annum respectively. Berger's capacity expansion augurs well for the company as
it will benefit from incremental demand in future. Going ahead strong growth in
real estate market, growing urbanisation, GST will be another growth lever for
organised paint industry, the Government's thrust on affordable housing will
push growth for decorative paints. Also, increase in disposable income and
willingness to spend for better lifestyle has led to shorter repainting cycles. This
will be another major push for growth in decorative paint demand. It has
reported revenue and bottom line growth of 9% & 8% respectively over FY2012-
17 and also operating margins has improved since 2012(10.94% in 2012 to
17.29% in FY17).Berger’s cash flows has also improved from `119.74cr in FY12
to `394.50cr in FY17. The company has a ROE of 22.83% FY17 TTM earnings
and it is currently maintaining an average dividend payout of 33.46%. Hence
BUY.
BUY
CMP `250
0.8
Reuters Code
BRGR.NS
BRGR:IN
1
BSE Sensex
33,562
Nifty
10,342
Face Value (`)
Paints
Market Cap (` cr)
24,255
52 Week High / Low
285.75/185.75
Avg. Daily Volume
27,676
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Berger Paints India Ltd
Others | Paints
Nov 23, 2017
2
Berger Paints India Ltd |Paints
Oct 13, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Berger Paints
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)