Berger Paints- 1% decline in profit but a potential upside of 21%?
Berger Paints reported a small decline in profit of 1%, at Rs.219 crore for the quarter ended September 2021-22 as opposed to the Rs.221 crore profit in Q2 FY21. This year the profit has been impacted by the high raw material costs and the pandemic, in unison. The cost of materials has shot up from Rs.750 crore to a whopping Rs.1,303 crore.
Revenue from operations showed a significant increase of 27.70% YoY, from Rs.1,743 crore in Q2 FY21 to Rs.2,225 crore in Q2 FY22. But, the total expenses witnessed an increase of Rs.468 crore in Q2 FY22. The EBITDA margin has been compressed by 333bps YoY.
Management commentary on the demand side, which is scheduled for 12 November, is eagerly awaited by analysts. Meanwhile, a 12 month price target of Rs.935, with a potential upside of 21% has been estimated by analysts.
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