Q&A with Berger Paints Managing Director & CEO Abhijit Roy

Amidst heavy competitions throughout the paints business, how was Berger Paints capable of increase its EBITDA margin and market share in the course of the first quarter this fiscal?

We’re the one firm which registered the best development amongst the key organised listed gamers in the course of the quarter. Primarily the expansion got here from automotive and ornamental coatings. Within the ornamental phase we’ve loads of scope for development, largely due to ongoing distribution enlargement. We had put in about 8200 color financial institution tinting machines within the final monetary 12 months. And this 12 months, we’ve set a goal of putting in at the very least 10,000 tinting machines. Within the first quarter, we managed to put in 2500 machines. So, this is among the causes, which is the enlargement of the community. There’s nonetheless loads of scope in that, and we are able to preserve increasing this explicit community to develop. Secondly, we’ve accomplished effectively in sure areas like building chemical compounds, waterproofing and wooden coating segments, which registered a powerful double-digit development. That can be serving to us to develop at a barely sooner tempo than probably different gamers within the business. So general, our execution by way of community enlargement and likewise the sale of most of these product classes that are doing effectively are serving to us to develop at a barely sooner tempo than the business. Throughout Q1, we noticed an general quantity development of 5.7 per cent year-on-year.

So far as profitability is worried, working revenue for the business generally declined in Q1. We have been the one listed firm that really elevated working revenue. For everybody else, it declined. The expansion in our working revenue was once more associated to 2 components. Firstly, in comparison with the primary quarter final fiscal, our gross margin itself expanded in Q1FY26 due to a greater product combine as we bought extra higher high quality merchandise with greater earnings. Secondly, this fiscal, we utilised the Sandila plant (in Uttar Pradesh) capability significantly better, and therefore the overhead prices as a share went down. Final fiscal, this plant got here into operation and due to this fact we have been utilizing it sub-optimally.

How a lot market share acquire did the corporate witness within the first quarter year-on-year? And what’s the outlook going ahead?

We grew from about 20.2 per cent to about 21.4 per cent. So, that’s over 1 per cent or 100 foundation factors market share acquire in Q1FY26.

We plan to additional increase our community as a result of there’s a enormous scope there. And probably some new product introductions. There are some product gaps which must be stuffed up. One new product, known as Color Plus, has simply been launched. It’s a premium emulsion for inside work, and it’s doing fairly effectively. The development chemical and waterproofing vary can be doing effectively. There are some merchandise that are doing significantly better than probably most different firms. Our industrial enterprise can be rising fairly effectively, so is more likely to proceed. After which building chemical compounds, waterproofing and the wooden coatings segments are already rising, and we’ll proceed to additional develop that market.

It has been greater than a 12 months now that Birla Opus Paints entered the business. At present, what sort of competitors are you dealing with?

Initially, as a result of they have been coming in contemporary with a large fund being spent, it created loads of buzz They’d accomplished loads of homework for the final two years, finding out sellers and understanding which sellers may do it. Initially, they put in tinting machines in seller counters. Now, the tempo of set up of tinting machines goes down for them from a really excessive stage. We have already got a lot of machines, and we’re nonetheless putting in about the identical numbers as they’re doing at current. This implies the preliminary features they’d have in any other case achieved are diminishing. The second half is expounded to the sale of the merchandise. In paints, simply putting in machines isn’t sufficient, the fabric quantity needs to be bought. Now we’re seeing the preliminary vitality or noise that was there has decreased significantly within the market.

Additionally, they’ve began withdrawing a number of the advantages which they have been giving. As soon as they begin withdrawing an increasing number of of the advantages and the worth differential, it’s more likely to put some stress on the gross sales. At present they can give greater earnings to the sellers. However when the earnings come down, then it’d develop into troublesome to maintain the gross sales momentum.

What’s Berger’s present manufacturing capability of ornamental paints? What are plans for capability enlargement within the subsequent three years?

We now have round 1.1 lakh tonnes monthly manufacturing capability. This fiscal, we’re increasing at our Hindupur plant (in Andhra Pradesh) for industrial paints This enlargement shall be accomplished by December this 12 months. We will start work on our Panagarh plant (in West Bengal), a greenfield undertaking to supply largely industrial paints and building chemical compounds, probably round April-Might subsequent 12 months. And, hopefully, it might probably get accomplished in a single 12 months or one-and-a-half years time-frame. We may even begin work on the greenfield Odisha plant. The Odisha plant will take about two years to finish. This plant will produce ornamental and industrial paints in addition to building chemical compounds. Manufacturing capability of ornamental paints will increase by round 40,000 tonnes after completion of those initiatives.

What could be whole capital expenditure for these greenfield and brownfield initiatives?

Capital expenditure for Panagarh and Odisha plant could be round ₹1,800 crore. And for the Hindupur plant brownfield enlargement we shall be spending round ₹220 crore. We are going to fund this capex by inner accruals.