BERGEPAINT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | BERGEPAINT | Market Cap | 53,955 Cr. | Current Price | 463 ₹ | High / Low | 605 ₹ |
| Stock P/E | 51.9 | Book Value | 49.0 ₹ | Dividend Yield | 0.82 % | ROCE | 24.9 % |
| ROE | 20.0 % | Face Value | 1.00 ₹ | DMA 50 | 523 ₹ | DMA 200 | 537 ₹ |
| Chg in FII Hold | -0.10 % | Chg in DII Hold | 0.37 % | PAT Qtr | 176 Cr. | PAT Prev Qtr | 321 Cr. |
| RSI | 20.1 | MACD | -17.9 | Volume | 94,508 | Avg Vol 1Wk | 2,87,407 |
| Low price | 459 ₹ | High price | 605 ₹ | PEG Ratio | 4.01 | Debt to equity | 0.08 |
| 52w Index | 2.60 % | Qtr Profit Var | -23.0 % | EPS | 8.69 ₹ | Industry PE | 33.8 |
💹 Financials: Berger Paints shows strong return ratios with ROE at 20% and ROCE at 24.9%, indicating efficient capital usage. Debt-to-equity is very low at 0.08, reflecting a healthy balance sheet. However, quarterly PAT dropped from 321 Cr. to 176 Cr., showing a -23% decline, which raises concerns about near-term earnings momentum.
📊 Valuation: The stock trades at a P/E of 51.9, significantly higher than the industry average of 33.8, suggesting overvaluation. The P/B ratio is ~9.4 (463/49), which is steep. PEG ratio of 4.01 indicates the stock price is not justified by its earnings growth. Dividend yield at 0.82% is modest.
🏢 Business Model & Advantage: Berger Paints operates in the decorative paints segment, benefiting from strong brand recognition, wide distribution, and consistent demand in housing and infrastructure. Its competitive advantage lies in brand equity, innovation in product lines, and pan-India presence.
📈 Overall Health: Financially stable with low debt and strong returns, but valuations are stretched. RSI at 20.1 indicates the stock is oversold in the short term, suggesting a possible technical rebound. Long-term fundamentals remain intact, though growth moderation is visible.
🎯 Entry Zone: Attractive entry around 450–470 ₹ range, closer to its support levels and oversold RSI zone. Long-term investors may hold if already invested, but fresh entry should be cautious given high valuations.
Positive
- Strong ROE and ROCE indicating efficient capital use.
- Low debt-to-equity ratio ensures financial stability.
- Strong brand presence and wide distribution network.
Limitation
- High P/E and P/B ratios compared to industry peers.
- PEG ratio suggests overvaluation relative to growth.
- Quarterly profit decline (-23%) raises concerns.
Company Negative News
- Recent quarterly PAT dropped significantly from 321 Cr. to 176 Cr.
- FII holding decreased by -0.10%, showing reduced foreign investor confidence.
Company Positive News
- DII holdings increased by 0.37%, reflecting domestic institutional support.
- Strong long-term fundamentals with consistent demand in housing and infrastructure.
Industry
- Paint industry in India is growing steadily, driven by urbanization and housing demand.
- Industry P/E at 33.8 indicates Berger Paints is trading at a premium valuation.
Conclusion
Berger Paints remains a fundamentally strong company with robust return ratios and low debt. However, valuations are stretched, and recent profit decline is a concern. Entry is advisable near 450–470 ₹ levels for long-term investors, while cautious accumulation is recommended given high P/E multiples.
Would you like me to also prepare a comparative HTML report against its closest competitor, Asian Paints, to highlight relative strengths and weaknesses?