BERGEPAINT - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.7

Here’s a detailed breakdown of Berger Paints' fundamentals and strategic profile, helping you judge its long-term potential and the current investment case

📊 Core Financials

EPS: ₹10.1 — modest profitability given current pricing.

ROE (20.3%) and ROCE (24.9%) — healthy return metrics; strong indicator of efficient capital use.

Debt-to-Equity Ratio: 0.11 — extremely low, signaling robust balance sheet and minimal financial risk.

Quarterly PAT: ₹262 Cr vs ₹295 Cr — slight decline, but overall profitability remains sound.

Dividend Yield: 0.66% — not a major income driver, but consistent.

📌 Stable financial foundation, but some margin pressure visible.

💰 Valuation Metrics

P/E Ratio: 57.0 — on the higher side relative to industry average (45.4); pricing in premium growth expectations.

P/B Ratio: ~10.8 (₹572 ÷ ₹52.8) — indicates significant valuation premium over net assets.

PEG Ratio: 4.60 — stretched valuation when compared with growth rate; caution advised.

Intrinsic Value: Likely below market price; current levels reflect brand strength more than earnings power.

🎨 Business Model & Strategic Positioning

Industry: Decorative and industrial paints — driven by construction, renovation, and urbanization trends.

Strengths

Strong brand equity and distribution network.

R&D and innovation—products with waterproofing, anti-bacterial paints, etc.

Weaknesses

Competitive pressure from Asian Paints, AkzoNobel, and niche players.

Dependency on crude-based raw materials impacting input cost volatility.

📉 Technical Indicators

RSI: 50.3 — neutral zone; no strong signal of overbought or oversold condition.

MACD: –0.97 — mild bearish trend but not strongly divergent.

Volume: Spiking above average — indicates accumulation or churn.

🎯 Suggested Entry Zone

₹545 – ₹565: Attractive zone near DMA50 and DMA200 levels.

₹520 – ₹535: Ideal if broader market pulls back; enhances margin of safety.

🏗️ Long-Term Investment View

Suitable for steady compounding portfolios with a 5+ year horizon.

Long-term growth supported by

Rural housing boom and urban premium renovation segment.

Expanding export footprint and automation in manufacturing.

DII confidence (↑0.34%) signals institutional optimism.

If you're curious, I can also compare Berger Paints with Asian Paints or Kansai Nerolac to see which one's the true masterpiece. Want to explore that next? 🎨📈

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