ICICI Direct has given Hold recommendation for Berger Paints India with a target price of Rs. 810 in its research report issued on Feb 11, 2021

ICICI Direct’s research report on Berger Paints India

Berger’s Q3FY21 performance was much ahead of our expectations on all fronts. Overall volume growth at ~28% was largely led by decorative segment wherein rural and semi urban regions have witnessed a continuous trend of strong demand supported by the festive season. On the other hand, a strong recovery in automotive sales helped in a robust revival in the performance of industrial paints (~15% of topline). The management has reiterated strong growth momentum will continue in Q4 led by uptick in urban demand and a favourable base. We believe volume growth for Berger would be in line with market leader Asian Paints at 13% in FY20-23E supported by market share gains and reduction in repainting cycles. On the margin front, we believe EBITDA margin will normalise, going forward, with a recovery in input prices and restoration of overheads.


We maintain our HOLD rating on the stock with a revised target price of Rs 810/share (earlier TP Rs 675).