BERGEPAINT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | BERGEPAINT | Market Cap | 58,044 Cr. | Current Price | 498 ₹ | High / Low | 605 ₹ |
| Stock P/E | 51.2 | Book Value | 54.4 ₹ | Dividend Yield | 0.77 % | ROCE | 23.6 % |
| ROE | 18.9 % | Face Value | 1.00 ₹ | DMA 50 | 478 ₹ | DMA 200 | 498 ₹ |
| Chg in FII Hold | -0.57 % | Chg in DII Hold | 0.63 % | PAT Qtr | 300 Cr. | PAT Prev Qtr | 336 Cr. |
| RSI | 55.4 | MACD | 14.1 | Volume | 3,28,268 | Avg Vol 1Wk | 3,73,819 |
| Low price | 391 ₹ | High price | 605 ₹ | PEG Ratio | 4.69 | Debt to equity | 0.07 |
| 52w Index | 49.9 % | Qtr Profit Var | 26.4 % | EPS | 9.40 ₹ | Industry PE | 34.0 |
📊 Financial Overview: Berger Paints (BERGEPAINT) maintains strong fundamentals with a market cap of ₹58,044 Cr. Quarterly PAT stands at ₹300 Cr, slightly lower than the previous ₹336 Cr. Debt-to-equity ratio is very low at 0.07, ensuring financial stability. ROCE of 23.6% and ROE of 18.9% highlight efficient capital utilization. Cash flows remain healthy, supported by consistent profitability.
💹 Valuation Indicators: The stock trades at a P/E of 51.2, well above the industry average of 34.0, suggesting overvaluation. P/B ratio is ~9.1 (498 ÷ 54.4), and PEG ratio of 4.69 indicates expensive growth. Intrinsic value appears lower than the current market price, signaling stretched valuations.
🏭 Business Model & Advantage: Berger Paints operates in decorative and industrial paints, with strong brand recognition and a wide dealer network. Its competitive advantage lies in brand loyalty, distribution reach, and product innovation. However, competition from Asian Paints and other players limits pricing flexibility.
📈 Entry Zone: A favorable entry zone would be around ₹420–450, closer to its lower support levels. Current price of ₹498 is slightly above fair value, making accumulation better on dips.
⏳ Long-Term Holding Guidance: Berger Paints is structurally strong with low debt, high ROCE, and consistent demand in the paints sector. Long-term investors may continue holding, but fresh entry should be cautious given premium valuations.
Positive
- 🌟 Strong ROCE (23.6%) and ROE (18.9%).
- 🌟 Low debt-to-equity ratio (0.07).
- 🌟 Strong brand presence and distribution network.
Limitation
- ⚠️ High P/E (51.2) compared to industry average (34.0).
- ⚠️ PEG ratio of 4.69 indicates expensive growth.
- ⚠️ Quarterly PAT decline from ₹336 Cr to ₹300 Cr.
Company Negative News
- 📉 Decline in quarterly profits.
- 📉 FII holding reduced by 0.57%.
Company Positive News
- 📈 DII holding increased by 0.63%.
- 📈 Strong demand outlook in decorative paints.
Industry
- 🏭 Indian paints industry growing steadily with urbanization and housing demand.
- 🏭 Industry P/E at 34.0 shows moderate valuation compared to Berger Paints.
- 🏭 Competition remains strong with Asian Paints, Kansai Nerolac, and Akzo Nobel.
Conclusion
✅ Berger Paints is fundamentally strong with excellent return ratios and low debt. However, valuations are stretched, making it suitable for long-term holding but not ideal for fresh entry at current levels. Investors should wait for dips around ₹420–450 for accumulation.
For a deeper perspective, you might explore a technical chart analysis or a peer comparison study to complement this fundamental view.