Berger Paints shares gained in the morning deals on November 6 despite posting a fall in net profit for the quarter ended September.
Berger Paints reported a 7.6 percent decline in consolidated net profit at Rs 269.6 crore in the second quarter of FY25, compared to Rs 291.6 crore in the corresponding period of the previous financial year.
The company flagged extended monsoons, adverse weather & flooding in some key markets as some of the challenges faced in the quarter but noted that it saw strong traction towards the quarter end. "This resulted in an almost flat quarterly revenue performance and moderate single digit growth on volume terms," Berger Paints said in a statement.
However, during Q2, Berger Paints posted highest gross margins over the last ten quarters at 41.7 percent. The premium segment performed well, posting robust growth in the waterproofing,
construction chemicals and wood coating segments.
At 9.30 am, shares of Berger Paints were quoting Rs 518.1 on the NSE, up 0.9 percent.
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Nuvama Institutional Equities cut its target price on the firm, factoring in a soft H1FY25 due to muted demand, competitive intensity from Birla Opus and the impact of prior price cuts. The brokerage's revised target price is Rs 625, down from Rs 645. However, it reiterated its buy call on the player.
On the other hand, Morgan Stanley and Nomura were both bearish on the paints player, noting that the earnings came in far below estimates. Morgan Stanley maintained its underweight rating with a target price of Rs 466 apiece, while Nomura reiterated its reduce call, seeing a target of Rs 500 per share.
The management of the firm expects topline growth to improve in H2, and is embarking on new initiatives to improve its market share.
Over the past 12 months, Berger Paints shares have fallen around 9 percent in trade, as compared to a 25 percent run in the benchmark Nifty 50 index.
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