Paint Cos Q4 Showdown: Berger Paints Beats Estimates, Asian Paints Losing Market Share?

Summary

In the latest earnings report, Berger Paints excels by surpassing estimates, whereas Asian Paints struggles with de-growth and loss of market share. Berger Paints highlighted impressive revenue growth and market share gain, with a 7.3% revenue increase and an 18% PAT growth, attributed to strong performance in decorative paints. Conversely, Asian Paints reported a revenue de-growth of 4.3% and a 45% drop in PAT. AkzoNobel maintained a steady growth in line with market expectations. Looking ahead, Berger Paints forecasts improved demand while Asian Paints anticipates subdued demand due to high competition and urban penetration. Analysts note that competition will tighten further by FY26, and the automotive segment is surpassing decorative paints. Valuation insights show Asian Paints trading at high multiples, with Berger slightly lower and AkzoNobel the most economical.

Highlights

• Berger Paints shines with a strong Q4, showing 7.3% revenue growth and 18% PAT growth! 🌟
• Asian Paints struggles with a 4.3% revenue decline and market share losses. 📉
• Steady performance from AkzoNobel, meeting market expectations. 🤝
• Asian Paints anticipates subdued demand due to increased competition and urban penetration. 🌆
• Berger Paints forecasts demand improvement by FY26 for decorative segments! 🎨
• Future market outlook suggests tighter competition and growth in the automotive sector! 🚀

Key Takeaways

• Berger Paints outperformed expectations with a strong Q4! 📈
• Asian Paints faces challenges, missing estimates and losing market share. 🚫
• AkzoNobel maintains steady performance as expected. 👍
• Growing competition affects market dynamics, with more threats expected by FY26. ⚠️
• Automotive segment outpaces decorative paints in growth. 🚗
• Future demand boosts predicted from tax and rate cuts in FY26. 💰

Overview

Berger Paints has emerged as the star performer in the paint industry, surpassing expectations with an impressive 7.3% revenue growth and an 18% PAT growth. This stellar performance was mainly driven by their decorative paint segment, along with a significant market share gain of 20%. Berger Paints’ robust strategies and market positioning seem to be paying off, as they forecast continued growth into FY26.

Contrastingly, Asian Paints faced a tough quarter, missing estimates with a 4.3% decline in revenue and a steep 45% drop in PAT. The company is grappling with intense competition and higher urban market penetration, which are taking a toll on their market share. Looking ahead, Asian Paints expects demand to remain subdued, which could put further pressure on their financials and market position.

AkzoNobel, meanwhile, continues to deliver solid results, aligning with market expectations. Their steady performance contrasts with the volatility seen in other companies, highlighting their resilience amid a competitive landscape. Analysts point to the automotive segment's growth outpacing that of decorative paints and expect future demand boosts from economic adjustments such as tax cuts and the eighth pay commission.

Chapters

• 00:00 - 00:30: Introduction to Q4 Paint Company Earnings This chapter introduces the earnings report for the fourth quarter from major paint companies. Specifically, it mentions companies like Berger Paints, Asian Paints, and Axonobel. The chapter highlights that Asian Paints did not meet the market expectations for this quarter. Maya is introduced as someone who will further breakdown the performance of these companies.
• 00:30 - 01:00: Q4 Earnings Overview The chapter titled 'Q4 Earnings Overview' discusses the financial results and performance of various companies in the paint industry for the fourth quarter. Burgger Paints outperformed its estimates, while Axonal's figures aligned closely with market expectations. In contrast, Asian Paints reported a decrease in revenue by 4.3% and a significant decline in Profit After Tax (PAT) by approximately 45%. Conversely, Burgger Paints experienced a revenue increase of 7.3% and made substantial market share gains of about 20%, accompanied by a PAT growth of roughly 18%. The performance of Axonobyl is also mentioned but not detailed in the provided transcript.
• 01:00 - 01:30: Company Financial Performance The company financial performance chapter outlines the revenue and PAT growth for the decorative paint segment for Axonobyl and Burgger Paints. Axonobyl experienced a revenue growth of around 9%, with PAT remaining flat for the quarter. In the volume versus value growth comparison, Asian Paints witnessed a volume growth of approximately 21% and a value growth of 1.4%, whereas Burgger Paints experienced a significant volume growth of 7.4% and a value growth of about 4%. Asian Paints also commented on the overall demand outlook.
• 01:30 - 02:00: Volume vs Value Growth The chapter discusses the contrasting demand projections for different companies, with a subdued demand expected in the first half of FY26, while Burgger paints anticipates an improvement in the same period for its decorative segment. Asian Paints is experiencing tough competition and losing market share to both new entrants and established players.
• 02:00 - 02:30: Market Share & Competition Insights The chapter discusses market share gains and competition insights, focusing on a paint company named Burgger Paints.
• 02:30 - 03:00: Common Takeaways from FY25 and Q4 The chapter discusses the outlook for decorative paints and their demand, noting that the gap between value and volume is expected to narrow in the future. Additionally, it mentions that tax cuts, rate cuts, and the eighth pay commission are anticipated to boost demand in FY26. In terms of company valuations, paint companies have historically not been inexpensive, with Asian Paints currently having a trading 12-month P/E ratio of 60 times, expected to decrease to 44 times by 2027.
• 03:00 - 03:30: Valuations and Analyst Recommendations This chapter discusses the valuations and analyst recommendations for three paint companies: Asian Paints, Burgger Paints, and Axonobyl. Asian Paints is valued at 54 times earnings but is expected to decrease to 46 times by 2027. It has 22 sell and 6 buy recommendations from analysts. Burgger Paints is slightly lower in valuation than Asian Paints and has 11 sell and 8 buy recommendations. Axonobyl is currently the cheapest, valued at 37 times earnings, but not many analysts track it; there is only one buy and one hold recommendation.

Paint Cos Q4 Showdown: Berger Paints Beats Estimates, Asian Paints Losing Market Share? Transcription

• 00:00 - 00:30 with their fourth quarter earnings as we move into the last leg of the earnings that we are seeing. I have Maya joining in to tell us how these paint companies have compared in terms of the fourth quarter performance breakdown and to break down it for us. Maya over to you. Right. So in terms of paint companies uh three main companies have come out with their earnings uh with has market shares Burgger paints as well as Asian paints and we have Axonobyl also that came out with its earnings yesterday. Now in terms of how Q4 fair fared for all of these companies, Asian Paints completely missed in terms of its estimates. Uh
• 00:30 - 01:00 Burgger Paints did beat its estimates and Axonal numbers were largely in line with what the street was expecting. Now in terms of how the financial performance fared in terms of the overall revenue growth, Asian Paint saw a degrowth of 4.3% and a PAT degrowth of almost 45%. Burgger paints on the other side has seen a revenue growth of 7.3% and has also seen a market share gain of around uh 20 odd percent since FI22 as well and a PAT growth of around 18 odd percent. Axonobyl and this is in the
• 01:00 - 01:30 decorative uh paint segment for Axonobyl uh for for Burgger Paints and Axonobyl has seen a revenue growth of around 9 o% and PAT growth has remained flat for this particular quarter. In terms of volume versus value growth, Asian paints saw volume growth of around 2 one odd percent and a value growth of 1.4% whereas Burgger paints saw a significant volume growth of 7.4% and a value growth of 4 odd%. In terms of uh the overall uh demand outlook, Asian paints has said that
• 01:30 - 02:00 demand to remain subdued in first half of FY26. Whereas Burgger paints on the other side, the commentary indicates that demand will improve from for them in the start of FY26 only for their decorative segments. In terms of um the overall view uh in terms of uh what they are saying in terms of market share, Asian Paints has been saying that competition is hitting them hard and the competition is not just from the new entrance but also from already established payers. They are losing market shares and this is due to high
• 02:00 - 02:30 competition one thing and higher urban penetration as well. But Burgger Paints as I mentioned earlier also has witnessed market share gain which was 18% in FY22 which has gone to almost 20% in FI25. Uh in terms of um the common takeaways that uh as to how paint companies have done in FI25 as well as this quarter competition to tighten further in FI26 is something that the management has guided. Uh automotive segment growth has been ahead of
• 02:30 - 03:00 decorative paints for most of these companies. And in terms of uh the overall demand outlook plus uh the the value versus volume gap that will narrow going ahead as well. And lastly um tax cuts, rate cuts and eighth pay commission to improve uh demand going in FY26. Now in terms of uh the valuations for these companies well paint companies were never cheap. uh Asian paints right now uh the trading 12 month uh piece stands at 60% uh 60 times which will go to around 44 times in uh 2027 for
• 03:00 - 03:30 Burgger paints slightly lower than Asian paints at 54 times which will go to around 46 times in 2027 and Axonobyl is the cheapest right now of all which stands at around 37 times. Lastly, in terms of what analyst recommendations are, for Asian paints, there are around 22 sells and six buys. For Burgger paints, around 11 sells and six eight buys. And for Axenoval, not a lot of analysts track this particular counter. So, we have one buy and one hold. So, this is the overall view as to how
• 03:30 - 04:00 things have panned out for paint companies this particular financial year as well as quarter for FI25. Where?