Berger Paints Feb-25

• The document is regarding Berger Paints India Limited's investor presentation on financial results for the quarter and nine months ended December 31, 2024, which was presented on February 11, 2025.

Q3 FY25 Snapshot

• Berger Paints experienced high single-digit volume growth in the decorative segment, with sequential uptick in both volume and value growth
• The protective business showed strong performance during the quarter
• Berger Paints continued to gain market share in Q3, exceeding 20%
• The operating margin remained within the guided range and improved sequentially
• The company improved its net cash position by the end of the quarter

Standalone Q3 FY25 Topline Performance

• Berger Paints recorded high single-digit volume growth, impacted by inflation and muted consumer sentiment in discretionary spending
• The volume value gap was mainly on account of a product price decrease undertaken in earlier quarters combined with stronger sales of high-volume, low-value products, and muted sales of high-value products
• The exterior premium segment performed well
• The waterproofing and construction chemical segment achieved strong double-digit growth
• Protective & Infrastructure business continued its good performance

Standalone Sustained Growth Trend

• The company has a strong, compounded growth rate over the past 3-4 years

Sustained Healthy Gross Margin %

• The gross margin has been healthy through Q3 FY25

Standalone: Operating Margin % Movement

• The operating margin improved sequentially through Q3 FY25

Standalone Q3 FY25: Operating Profit

• Gross margin contracted marginally compared to the corresponding period last year due to product price reduction, currency depreciation, and some inventory impact of monomer price increase
• Operating margin was lower on a Year-over-Year (YoY) basis but improved sequentially due to operating leverage
• The operating margin remained on the higher end of the guided 15-17% band
• Net-level profit growth saw an uptick, aided by dividend received from BJN Nepal

Decorative Business: Q3 FY25

• The decorative business recorded high single-digit volume growth
• The exterior premium segment performed well in the quarter
• CC, waterproofing, and wood coatings products had robust performance
• Aggressive network expansion continued, adding over 2,000 retail touch points and installing around 1,800 Colorbank tinting machines
• The urban initiative is progressing well

Industrial Business: Q3 FY25

• The Protective Coating business maintained its leadership position with strong performance
• The Automotive, General Industrial, and Powder Coatings business line experienced muted growth

Net Cash

• Net cash position improved through Dec '24

Performance - Consolidated Q3 FY25

• Company's overseas subsidiary, Bolix S.A, Poland had a steady topline growth in the quarter, but profitability was muted due to one-off project expenses
• Company's overseas subsidiary, BJN Nepal had a robust turnaround performance on topline aided by a low base and improvement in business conditions. Profitability growth was strong aided by the scale effect.
• Company's subsidiary, STP Ltd had a quarter of steady topline growth, but profitability suffered due to deterioration in product mix
• SBL Specialty Coatings Ltd had modest topline growth and a flat growth at operating profit level
• The joint venture, Berger Becker Coatings, had another quarter of healthy topline and profitability growth
• The Joint venture Berger Nippon Paint Automotive Coatings had strong topline growth and improved profitability, aided by gross margin expansion

Business Outlook

• Optimism exists for decorative business improvement sequentially
• Volume is expected to decrease and value gap expected in the coming quarter
• Automotive Businesses are likely to perform better in the coming quarters.
• Geopolitics and currency depreciation are appearing as likely risks.