Berger Paints India recently announced its financial results for the first quarter of the fiscal year 2024-25. The company’s consolidated net profit stood at INR 353.56 crore, showing no significant change from the INR 354.35 crore recorded in the same quarter last year. This reflects a slight decline of just 0.22 percent, indicating a stagnant profit performance for the quarter.
Challenging Market Conditions
According to Abhijit Roy, Managing Director and CEO of Berger Paints India, the first quarter posed several challenges. The company had to navigate difficult market conditions, including the impact of elections, unfavorable weather, and a slowdown in key markets. Despite these challenges, Berger Paints experienced positive volume growth. However, the overall sales value was impacted by price reductions made in previous quarters and higher sales in lower-value products, particularly in the waterproofing and construction chemicals segments.
Factors Affecting Profitability
Roy noted that while profitability remained healthy, there was negative growth in profit due to several factors. First, the company faced a base effect from very high margins recorded in Q1 FY24. Second, previous price reductions also had an adverse effect on the profit margins. Finally, Berger Paints increased its investment in advertising and brand-building activities, especially in relation to the elections, which further impacted profitability.
Modest Revenue Growth
The company reported a revenue of INR 3,091 crore for the quarter, which represents a modest 2 percent increase from the INR 3,029.5 crore recorded in the corresponding period last year. However, the company’s Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) declined by over 6 percent year-on-year, amounting to INR 522.40 crore.
Strategic Focus Moving Forward
Looking ahead, Berger Paints India is focused on overcoming the challenges faced in the first quarter. The company aims to address the factors that have impacted its profitability and continue to leverage its strengths in volume growth. Berger Paints remains committed to maintaining its market position and driving future growth in a challenging economic environment.
