- 15 May 2023
- ICICI Securities
Berger Paints Q4 Results 2023 : Healthy volume growth, higher operating expenses restrict margin expansion
Berger Paints India Ltd | CMP: 508 | Market Cap: 59,239.92
View: We believe Berger Paints growth of 11% (vs I-direct estimate: 12%) YoY in Q4FY23, was lower than market leader's volume growth of 16%. However, the company reported ~14% volume growth in its decorative paints segment led by better product mix during the quarter. On the margin front, we believe that the benefit of lower raw material prices was partially offset by higher operating expenses. EBITDA margin at 15.1% is in line with its pre-covid margin range. However, we believe that higher ad expenses & overhead expenses will restrict the margin expansion, going forward. On the demand front, company's focus on adding retail outlets and new product launches is likely to result in better revenue growth going forward. We await management commentary on sustainable margin guidance, going forward.
Impact: Neutral