Berger Paints India Q2 results: Net profit rises nearly 33% at ₹292 crore

Berger Paints India on Thursday reported lower-than-expected second-quarter earnings, as a weak monsoon and delayed festivities offset cooling raw material costs.

Consolidated net profit rose nearly 33% year-on-year at ₹292 crore ($35.1 million) for the quarter ending Sept. 30, but fell short of analysts' estimate of ₹308 crore as per LSEG data.

Berger's revenue grew 3.6%, its slowest in 12 quarters, and also missed analysts' estimates.

Analysts had expected paint companies' sales to be impacted due to erratic distribution of monsoon rains and delayed festivities. India's monsoon this year was its lowest since 2018.

While Berger's decorative segment posted a double digit volume growth, the sale of exterior paints - used to protect walls from environmental deterioration - was heavily impacted due to delayed festive season and rains in September, CEO Abhijit Roy said in a statement.

Raw material costs, which account more than 60% of the total expenses, fell nearly 6%, but lower revenue growth impacted profits at India's second-biggest paint company by revenue.

Prices of key raw materials for paint companies, such as titanium dioxide and vinyl acetate monomer, declined 6.4% and 44.4% respectively, while crude oil prices fell 7.6%, ICICI Securities said in a pre-earnings note.

Rival Asian Paints last month reported improved margins, though it missed profit estimates, while Kansai Nerolac's profit rose led by a fall in expenses.