Coating major Berger Paints India Ltd. has implemented three price hikes since June, which are expected to boost its 'value' growth to around 5% in the second quarter ending September 2024, while maintaining a volume growth target of at least 10%, an official said on Monday.
Speaking after the company's 100th AGM, Berger revealed that its next milestone is to double its turnover to Rs 20,000 crore by 2029, up from Rs 10,000 crore in Fiscal 2024.
The company also plans to close down the Howrah plant and convert it into a larger R&D centre by the end of 2025, once the greenfield Panagarh facility in West Bengal becomes operational.
"We achieved a volume growth of 11.8% in the first quarter of Fiscal 2025, but value growth was just 2.5% due to factors like price decreases, reduced raw material costs, and a slowdown in the luxury paints segment in West Bengal and Kerala.
The three price hikes between June and August will improve and mitigate the cost impact of 1.5%, leading our value growth to about 5% in the ongoing second quarter," said Abhijit Roy, MD & CEO of Berger.
While the luxury segment was facing some pressure, construction chemicals and waterproofing segments are growing strong, he said..
Berger's revenue from operations for the quarter ended June was Rs 2,806 crore, compared to Rs 2,740 crore in the corresponding quarter last year, marking a 2.4% increase.
Roy expects margins to remain at around 40% gross margin and EBITDA at approximately 17% for the ongoing quarter.
Discussing the full year, the Kolkata-based coating company anticipates better value and growth. Roy stated that the company's capacity will increase by 25% by 2027 when the Panagarh and Odisha plants become operational.
Roy mentioned that Berger remains largely unaffected by new entrants and expects the country's strong growth to allow for coexistence.
The official also noted that the company has 30 acres of land at Panagarh, with commercial production expected to start by the end of 2025. However, it has not yet been finalised how many employees from the Howrah facility will be absorbed, with the remainder to be offered VRS.
Additionally, Roy highlighted that its Polish international operation, Bolix, is performing well despite energy shortages in Europe following the Ukraine war.
Meanwhile, operations in Nepal are expected to improve this year after struggling for the last two years.
At the end of the financial year, the company's consolidated turnover stood at Rs 11,199 crore, with standalone turnover crossing the Rs 10,000-crore mark, closing at Rs 10,003 crore.
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