BERGEPAINT - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 How I’m Thinking About This

You’re asking for a full-spectrum fundamental analysis of Berger Paints India Ltd (BERGEPAINT), a top-tier player in India’s decorative and industrial coatings market. I’m evaluating its financial strength, valuation metrics, business model, and technical indicators to determine its long-term investment potential and ideal entry point.

📊 Core Financials Breakdown

Profitability & Growth

EPS: ₹9.14 — moderate earnings base

PAT Qtr: ₹321 Cr vs ₹237 Cr — +35% QoQ, and +5.09% YoY — steady growth

ROE: 20.0%, ROCE: 24.9% — excellent capital efficiency

Debt-to-equity: 0.09 — very low leverage, strong balance sheet

Dividend & Cash Flow

Dividend Yield: 0.71% — modest, consistent payout

Strong operating cash flows support reinvestment and shareholder returns

💰 Valuation Indicators

Metric Value Interpretation

P/E Ratio 57.1 Overvalued vs industry PE of 48.7

P/B Ratio ~11.0 Significant premium to book value

PEG Ratio 4.42 Overvalued relative to earnings growth

Intrinsic Value ~₹500–₹520 Slightly overvalued at current price

Valuation is stretched, especially with a high PEG ratio and premium multiples.

🎨 Business Model & Competitive Edge

Industry: Paints — consumer discretionary, brand-driven, high-frequency

Moat: Strong brand recall, wide dealer network, diversified product mix (decorative + industrial)

Catalysts

Urbanization and home ownership driving repaint cycles

Premium product demand (eco-friendly, textured finishes)

Expansion in industrial coatings and export markets

DII holdings up (+0.34%) — growing institutional confidence

Berger Paints competes closely with Asian Paints and benefits from a mix of retail and industrial demand.

📉 Technical & Entry Zone

Current Price: ₹536

DMA 50/200: Trading below both — mild bearish trend

MACD: -3.41 — negative momentum

RSI: 45.7 — neutral zone

📌 Suggested Entry Zone: ₹500–₹520

This range offers a better margin of safety and aligns with intrinsic value and technical support levels.

🕰️ Long-Term Holding Guidance

Hold if already invested, especially for brand strength and sector resilience

Buy on dips near ₹510 if bullish on consumer demand and infrastructure growth

2026 Target Price: ₹600–₹630 based on projected earnings and sector expansion

⭐ Fundamental Rating

4.1

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