Berger Paints' third quarter consolidated profit after tax is expected to jump 25.4 percent year-on-year to Rs 103 crore, according to the average of estimates of analysts polled by CNBC-TV18.
Total income is seen going up 15.4 percent to Rs 1,189 crore in the quarter ended December 2014 from Rs 1,030 crore in same quarter last fiscal.
Berger Paints is the second largest player in the decorative paints market, with a 19 percent market share of organized market while it is the third largest paint co in the industrial segment.
Operating profit may increase 25 percent year-on-year to Rs 164 crore and margin may expand 100 basis points to 13.8 percent in the quarter gone by.
Expectations
Steady volume growth and sharp fall in input costs could aid strong operating profit growth
Analysts expect double-digit volume growth in domestic paints segment which, along with around 5 percent Y-o-Y increase in realization. That may drive 15 percent revenue growth.
They expect domestic volumes to grow at 12 percent led by pick up in urban demand and healthy growth in advertised products.
Product mix improvement and falling crude oil prices may aid in gross margins expansion of 160 basis points in domestic business
Analysts expect part benefit of softening in input costs to reflect via margin expansion
International growth may be impacted largely due to unfavorable currency movements. They expect 8.5 percent revenue growth in international operations.
Berger Paints – along with a whole host of paint company will benefit immensely from the fall in crude and crude derivatives. Brent crude has fallen nearly 30-35 percent from 2014 high. Crude and derivatives constitute 59 percent of cost of goods sold and every 10 percent drop in crude oil will up FY15 EPS by 37.7 percent, say analysts.
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