Berger Paints is expecting an improvement in margin with a decline in input costs mainly due to falling crude oil prices, and also weighing a modest increase in rebates during the current fiscal to boost sales, a top company official said.
Despite the expected rise in rebates, the paint maker remains confident in its ability to maintain a healthy growth trajectory, aiming at an EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin of 16-17 per cent in the 2023-24 financial year, its managing director and CEO Abhijit Roy said.
"While we have witnessed a decline in input costs due to the reduction in crude prices, the competitive nature of the industry may lead to a slight increase in rebates.
"Nevertheless, this increase will not be significant as it aligns with the pricing levels we experienced prior to the COVID-19 pandemic," Roy told investors in an analysts' meeting.
The company also does not foresee any dent in demand in the current fiscal, he said.
Speaking about its newly commissioned Uttar Pradesh plant, Roy said the paint maker expects to reach a utilisation level of 75 to 80 per cent at the Sandila facility within the next one and a half to two years, bolstered by seasonal demand and continued market expansion.
Berger Paints Q3 net down 20.4% to Rs 201 cr; revenue up 6% to Rs 2,694 cr
Asian Paints slips 3% after Q3FY23 result misses street estimates
India's Russian oil imports cross 1 million barrels a day in December
Podcast: What will guide oil prices in 2023?
Berger Paints India Q4 results: Net profit falls 15% to Rs 186 crore
Maruti Suzuki working on various initiatives to make roads safer: Official
SC dismisses Tata Motors plea challenging HC order on disqualification
JSW Steel elevates Jayant Acharya as Joint MD, CEO with immediate effect
Zomato narrows losses to Rs 188 cr in Q4, expenses fall to Rs 2,431 cr
Infosys rolls out a 60% average variable payout; Wipro's at 80.2%
The company also plans to commission a new plant in West Bengal in 2025.
Additionally, it plans brownfield expansions in its existing facilities and a greenfield project in Odisha, slated to commence in 2026.
In terms of distribution, Berger Paints aims at expanding its network by adding approximately 8,000 new dealers to its current base of 40,000.
Roy highlighted that historically, a 20 per cent increase in distribution translates to an additional 5-6 per cent growth in overall sales.
Its consolidated revenue from operations was at Rs 10,567.84 crore in FY23, 20.61 per cent higher than the previous fiscal.
Berger Paints' net profit was up 3.3 per cent at Rs 860.40 crore for the fiscal year ended March 31, 2023. It had reported a net profit of Rs 832.95 crore in the previous year.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)