Buy Berger Paints India; target Rs 324: Maximus Securities
Maximus Securities is bullish on Berger Paints India and has recommended buy rating on the stock with a target price of Rs 324 in its July 22, 2013 research report.
July 22, 2013 / 19:18 IST
Maximus Securities' research report on Berger Paints India
"Berger Paints India is poised to have a strong growth ahead in the coming fiscal year given the inherent traction in decorative as well as industrial paints segment growth. The company has been aggressively enhancing its capacity and its reach towards southern region through franchise routes; this could augur well in the coming fiscal. With the initiatives taken by company i.e. capacity building, introducing new products, aggressive market strategy and increasing advertisement expenditure, Berger Paints will be successful in gaining market share for the coming years.""Till now company was catering to mid and economy range products, though recently company has introduced several products in premium emulsion range to improve its product mix and strengthen its position in over all decorative paints market. With the increase in share of premium products in their top line, company looks at improving its margins ~150-250 bps. Management has cited an estimated capital expenditure of Rs 150-175 crs in FY14."Valuations: "We expect the historical discount valuations of Berger paints to Asian paints to narrow in future due to Berger's considerable gain in size and scale with strong growth in revenue along with increase in shift towards premium products thereby enhancing operating margins. At current market price we believe the stock has considerable positive upside. We give a BUY rating on the stock with the target price of Rs 324 (39x FY14E EPS)," says Maximus Securities research report.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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