Berger Paints India eyes Rs 20,000 crore turnover in the next 5-6 years

The company was scouting for a 40-50 acre-plot in Odisha, says Abhijit Roy, MD and CEO, Berger Paints

The country’s second-largest paints company, Berger Paints, is hoping to double its turnover to Rs 20,000 crore in the next 5-6  years. The firm is expected to close FY23 with revenues of around Rs 10,000 crore.
 

Most of the growth would come from the domestic market, Abhijit Roy, managing director and chief executive officer, Berger Paints, said.
 

In H1FY23, Berger’s consolidated total income from operations stood at Rs 5,430.62 crore and Roy said that the company was on course to cross Rs 10,000 crore this financial year. In FY22, Berger clocked in a turnover of Rs  8,826.37 crore.
 

The growth would be led by Berger’s expansion plans. In Uttar Pradesh (UP), it will shortly start its largest plant; next in line are Odisha and Panagarh in West Bengal. Roy said that the company was scouting for a 40-50 acre plot in Odisha. The investment and expansion in Odisha would be in phases. Initially, it could be less than UP, but there would be room for further expansion.
 

In UP, the initial investment in the plant was pegged at Rs 725 crore and later scaled up to Rs 1,015 crore. It would mainly cater to the decorative segment but would also have construction chemicals and industrial. Berger indicated in an investor presentation that the potential capacity increase from the facility would be about 33 per cent. 

“It’s an integrated plant and would cater to our requirements for the next three years,” Roy said on the sidelines of a roadshow for investment opportunities in UP.

Odisha and Panagarh could be taken up simultaneously, Roy said. In Panagarh, the company has acquired 30 acres for manufacture of construction chemicals, resign and industrial products; Berger already has two plants in West Bengal.

On the company’s performance going forward, Roy said that with raw material prices easing, margins would improve sequentially.

Roy indicated that Q4FY23 would be better than Q3FY23 and Q1FY24 would be better than Q4FY23. Berger’s consolidated profit after tax (PAT) in Q2FY23 was muted at Rs 219.51 crore; it was at Rs 219.21 crore in Q2FY22.

The entire increase in raw material cost could not be fully passed on to the consumer. But Roy said with raw material prices easing, the company was not looking to increase prices at least in the next couple of months.