Berger Paints, Indias second largest paint-maker, is on a high. It is eyeing a “double digit” volume and value growth in FY22 banking on uptick in demand for decorative paints - at the economy and premium end of its offerings and continued growth in industrial offerings and a calibrated price rise. One round of hikes happened in May and another is expected around July. The company registered a sales growth of over 7% and 13% in value and volume terms
Abhijit Roy, MD and CEO, Berger Paints India Ltd, said that upcountry markets continue to drive demand in decorative paints; while the metro markets are “coming around” with repainting work resuming post-lock down.
In an encouraging sign, some of the markets in western India, north and parts of south India are witnessing demand recovery post re-opening after the second wave of Covid influenced lock down.
However, the eastern region, which is normally one of the higher grossers for Berger, is still witnessing “some lag”, mostly in recoveries as restrictions continue in markets like West Bengal, Odisha, and parts of the North East.
Abhijit Roy, MD and CEO, Berger Paints India Ltd, maintains, the initial trends over the last few days suggest a spike in sales by company to both distributors and sellers, as well as in secondary market sales to end-user. Premium and economy offerings are witnessing uniform increase in demand across rural and urban markets. To add to it monsoon specific offerings in waterproofing and construction chemicals segments are doing slightly better than other products.
“The concern we had some weeks back was whether the rural economy and the upcountry markets have been more severely hit by the second wave. Last years economic recovery was led by the rural economy, and then the auto industry started picking up. What we have seen over the few days is that the rural and upcountry markets are not as badly impacted as we feared. We are confident of closing Q1 (April to June) FY22 at numbers higher than Q1FY20. Last year numbers would obviously not be a right comparison due to the low base effect,” he said.
Considering good monsoons - which are mostly on track so far - and factors like increase in MSPs then a good recovery can be expected.
The industrial paint portfolio is being revamped and ramped up and new launches in the decorative category are on the cards soon.
“For the full year, we are confident of a double digit growth - both volume and value. Price hikes have happened or are in the offing. It is a little difficult to peg growth numbers now because of the changing nature of the virus and infections,” Roy added.
In FY21, Berger clocked a sales growth of over 7 per cent and 13 per cent in value and volume terms, respectively.
According to Roy, a 1.5 per cent price rise of sales is being initiated July 1 onward for solvent-based paints. Rising input cost is the reason. Earlier in May 2021, a nearly 4.5 per cent increase of sales happened for water-based offerings. “Till now, we have taken price hike up to 4.5 per cent of sales, whereas raw material impact is around 8 per cent,” he said.
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