Decorative biz growing more than industrial paints: Berger

Paint major Berger Paints reported 57.14 percent rise in its consolidated net profit for the third quarter against Rs 49 crore in the corresponding period in the previous year.

Its net sales and other operating income stood at Rs 920 crore versus Rs783 crore in the same period a year ago, registering 18 percent increase. Nifty, Sensex firm; IFCI, Berger, Leyland lead gainers Speaking to CNBC-TV18 about the financial performance of the company CEO Abhijit Roy said softening of raw materials cost helped them to expand margins. Also, better margins in the decorative business had a positive impact. The company may continue to face challenges in the industrial business segment going ahead, but decorative business is witnessing growth, he added. Below is the edited transcript of his interview on CNBC-TV18 Q: Your margin expansion went down quite well with investors. Was it to do with raw materials or did any other factors aid that margin expansion? A: There were two reasons; one is of course the raw material prices which impacted us. The second part is to do with more shift towards a decorative business because industrial business floored down a bit. The margins being better in decorative business it had a positive impact there. Q: Could you just confirm for us what exactly the volume growth was for the quarter that you closed up and what you expect to see on the volume front for the rest of this calendar year? A: Volume growth was in double digits, we crossed the double digit mark. Decorative business had a slightly higher volume growth compared to the industrial business line which faced some resistance in the last three months. Going forward the challenges will remain as far as industrial business line is concerned especially the protective coating which is related to the infrastructure part of it and also the automotive industry which has slowed down a bit. That part of it will remain slow and the decorative business line will carry on along at normal pace. Q: Are you considering any kind of inorganic moves to add to your market share and to aid volume growth because there have been unconfirmed rumors that you have denied in the past about Shalimar Paints etc. Is there anything that you are targeting in the industry to gain market share? A: Not that I know of as of today but in case something comes up you will come to know anyways. Q: Your closest competitor at this point is AkzoNobel, so how does the market break up in terms of market share for Berger versus some of these other companies? A: In decorative paints business line we are number two, we are almost double the size of AkzoNobel or Nerolac. However in terms of overall size, the closest competitor to us is Kansai Nerolac which will be marginally behind us in terms of total turnover because they do very well in the industrial business line. Behind them is AkzoNobel. So if you take the pecking order it is Asian Paints followed by Berger followed by Kansai Nerolac and then AkzoNobel.