BERGEPAINT - Investment Analysis

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

📊 Investment Rating: 3.6

🎨 Long-Term Investment Outlook

Berger Paints (BERGEPAINT) is a quality business with strong fundamentals, but its current valuation is stretched, making it a moderate long-term candidate

🔍 Valuation Snapshot

P/E of 57.0 vs Industry PE of 45.4 → trading at a premium.

PEG Ratio of 4.60 → signals overvaluation relative to growth.

Price-to-Book ~10.8x → expensive for a consumer durable.

💰 Profitability & Financial Strength

ROCE (24.9%) and ROE (20.3%) → excellent capital efficiency.

Debt-to-Equity of 0.11 → very low leverage.

Dividend Yield of 0.66% → modest but consistent.

📉 Technical & Sentiment Indicators

RSI at 50.3 → neutral zone, no strong momentum.

MACD negative → mild bearish trend.

Trading near 50-DMA (₹566) and above 200-DMA (₹539) → technically stable.

Volume spike → recent buying interest.

🧾 Earnings & Institutional Activity

Quarterly PAT down 11.2% → some earnings pressure.

FII holding down, DII holding up → mixed institutional sentiment.

🎯 Ideal Entry Price Zone

Entry Zone Rationale

₹520–₹550 Near 200-DMA and historical support zone

< ₹520 Strong buy if PEG improves and RSI dips below 40

Entering at current levels (₹572) offers limited upside unless growth accelerates.

🧭 Exit Strategy / Holding Period

If you already hold BERGEPAINT

Holding Period: Minimum 3–5 years, given strong ROE/ROCE and brand strength.

Exit Strategy

Partial exit if price crosses ₹630–₹650 without PEG improvement.

Full exit if ROE drops below 15% or PEG stays above 4.

Hold if PEG drops below 2 and EPS growth resumes.

Would you like a head-to-head comparison with Asian Paints or Kansai Nerolac to see how Berger stacks up in the paint industry? 🎯

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