(Reuters) – Berger Paints India on Wednesday reported a bigger-than-expected 40% rise in profit, aided by robust demand for decorative paints and easing raw material costs.
The paintmaker’s consolidated net profit rose to 3.54 billion rupees ($42.76 million) for the quarter ended June 30 from 2.53 billion rupees a year earlier.
Analysts, on average, had estimated a profit of 3.29 billion rupees, according to Refinitiv IBES.
Berger’s cost of raw materials consumed fell 9% in the quarter helped by a drop in crude prices. Crude is a key raw material for paintmakers and comprises about 30% of their input costs.
The company said its decorative segment delivered 11.4% growth during the quarter and its waterproofing and protective divisions also saw robust growth.
Revenue from operations climbed nearly 10% to 30.3 billion rupees.
Berger expects “to end the year with double-digit revenue growth as demand outlook remains good on the back of positive monsoon progress, infrastructure spends and extended festive season,” it said in a statement.
The company is, however, likely to face stiff competition in the coming quarters, with Pidilite Industries and J.K. Cement preparing to foray into the space. Grasim Industries is also on track to launch its paint business this year.
Its peers Kansai Nerolac, Indigo Paints and Asian Paints also reported a rise in first-quarter profit.
Additionally, Berger also approved a bonus issue of shares in a ratio of 1:5.
($1 = 82.7920 Indian rupees)
(Reporting by Ashna Teresa Britto; editing by Eileen Soreng)