In the current fiscal year, Berger Paints’ Managing Director & CEO, Abhijit Roy, considers a double-digit volume growth in the first quarter to be favorable given the ongoing inflationary pressure. The company’s consolidated revenue for this quarter increased by 9.8% YoY, primarily due to an expanded distribution network and reasonable demand in April and part of May. The quarter saw volume growth of around 14% in the decorative segment and approximately 12.7% overall, which is considered positive given the prevailing circumstances.
Addressing the urban and rural demand trends in the paint industry, Roy notes that both areas have shown similar patterns recently, with urban growth being slightly faster. He anticipates a positive impact on rural demand due to the good monsoon, while urban demand is more influenced by economic growth. Roy expects an economic growth rate of over 6% to boost urban demand, and a late Diwali this year should provide more selling days, benefiting the season’s performance.
Berger Paints holds a leadership position in India’s protective coatings and general industrial categories. With government and private sector investments in infrastructure, the company has growth opportunities in these sectors. In waterproofing and construction chemicals segments, growth prospects are also promising.
Regarding expansion plans, the company has two confirmed greenfield plants in Panagarh (West Bengal) and Odisha for various paint types. The third greenfield plant, focusing on water-based decorative paint, will be located in Maharashtra or Gujarat. The expected capital expenditure for this plant in the South is around Rs 800 crore, possibly higher. Brownfield expansions are planned for factories in West Bengal (Rishra), Andhra Pradesh, Gujarat, Goa, and Puducherry, catering to both decorative and industrial segments. Over the next five-six years, Berger Paints intends to invest around Rs 2,700 crore in brownfield and greenfield capacity expansions.
Looking at revenue, the company achieved over Rs 10,000 crore in consolidated revenue during the last financial year. The goal is to double this revenue, aiming for Rs 20,000 crore by FY29.