Buy Berger Paints India; target of Rs 766: Religare Retail Research

Religare Retail Research report on Berger Paints India

Berger paints standalone revenue for Q4FY23 grew by 13.6% YoY with volume growth of 11.1% while its consolidated revenue grew by 11.7% YoY but saw a decline of 9.3% QoQ to Rs 2,443.6cr. The growth was driven by double digit growth in the decorative segment as well as healthy demand for construction chemicals and pick up in sales of industrial segments. For FY23, its standalone revenue grew by 22.3% YoY to Rs 9,470cr with strong volumes growth of 15.5% YoY and its consolidated revenue grew by 20.6% YoY to Rs 10,567.8cr. The company achieved the milestone of 10,000cr in revenue on consolidated basis.

Outlook

On the financial front, we expect revenue/EBITDA to grow at 21%/38% CAGR over FY23-25E and have maintained a Buy rating with the target price of Rs 766, giving a PE multiple of 42x FY25E EPS.