Berger Paints jumps 6% to hit 52-week high on turning ex-bonus

Shares of Berger Paints surged 6 percent to hit a 52-week high of Rs 665 per share in intra-day trade on September 22 after the stock turned ex-bonus. In comparison, the S&P BSE Sensex was flat at 66,250 levels, as of 11:50 am.

In the past month, the stock of this paint and coating manufacturer has surged 12 percent against a 1 percent gain in the benchmark Sensex.

Earlier this month, the company had fixed September 23 as the record date to ascertain the eligibility of shareholders for the issue of bonus equity shares in the ratio 1:5, that is, one equity share of Re 1 for every five equity shares of Re 1 each.

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In the April-June quarter of the financial year 2023-24, the company posted a net profit of Rs 326.3 crore, an increase of 39 percent year-on-year (YoY),  from Rs 234.4 crore in the year-ago period.

The Kolkata-based company’s revenue from operations surged 10 percent YoY to Rs 2,739.7 crore in Q1FY24 versus Rs 2,488.6 crore in Q1FY23.

Total expenses, too, increased 6 percent YoY to Rs 2,312.4 crore. Net debt, however, was trimmed to Rs 243 crore in Q1FY24 from Rs 610 crore in Q4FY23.

Going ahead, the company expects to get net cash positive by the end of this fiscal year.

“We expect to end the year with double-digit revenue growth on strong demand outlook led by positive progress in monsoon, infrastructure spends, and festive season,” the management had said.

Analysts at HDFC Securities maintained an ‘add’ rating on the counter, with a target price of Rs 700 apiece.

“Berger Paints continues to fend off its market share amid increasing competitive intensity. The worst of the gross margin pain seems behind the industry. The management is confident of sustainably clocking 38-40 percent gross margin or 16-18 percent of Ebitda margin in FY24. Therefore, we maintain our FY25/26 earnings-per-share (EPS),” the brokerage firm added.

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