Berger Paints India Ltd (BERGEPAINT) Q2 FY27 Results Analysis: EBITDA Margin Slips 88 bps, Revenue Grows 13%
Berger Paints India Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 3,200.37 Cr (+13.19% YoY) and PAT growth of +5.19% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | November 05, 2026 |
|---|---|
| Revenue (Q2) | Rs. 3,200.37 Cr (+13.19% YoY) |
| PAT (Q2) | Rs. 217.10 Cr (+5.19% YoY) |
| EBITDA margin | 11.58% (-88 bps YoY) |
| EPS (Q2) | Rs. 1.86 (+5.08% YoY) |
Quarter Snapshot
Berger Paints delivered 13.19% consolidated revenue growth but missed its own margin guidance, with consolidated EBITDA margin down 88 bps YoY to 11.58% and standalone down 184 bps to 10.82% as raw-material costs grew 25.59% YoY. Cash conversion was weak (H1 CFO/PAT 0.23x, FCF −Rs.81.56 cr) on inventory and receivables builds, though the balance sheet remains net cash Rs.540.65 cr. The investment case now hinges on November-onward price increases and raw-material inflation cresting to restore H2 margins into the guided 15-17% band.
Q2 FY27 Expectations vs Results
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Revenue | "revenue likely in-line to modestly ahead on price/mix" | +13.19% consolidated, +11.86% standalone | Played out |
| Volume | channel checks "+2–4% YoY", below the guide | Not disclosed in the filing | Not observable |
| Gross margin | "gross margin likely recovering from Q1's 39.3%" | 36.64% standalone (vs 39.28% Q1); 39.31% consolidated (vs 40.88%) | Contradicted |
| PBDIT margin | "flat-to-expanding YoY" within 15–17% | −88 bps consolidated / −184 bps standalone YoY | Contradicted |
| TiO₂ duty-free tailwind in Q2, duty lands in Q3 | "imports stayed duty-free all quarter" | Filing silent on TiO₂ | Not observable |
| Bolix & STP recovery | recovery guided for Q2 | Press release confirms strong subsidiary/JV topline and operating-profit growth — qualitative | Played out |
| Watch items: Hindupur utilisation/depreciation step-up; tinting cadence; competitive-spend normalization | — | Not addressed in the filing — remain open for the call | Open |
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Management Guidance vs Delivery
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| PBDIT margin within 15–17% band | Q1 FY27 earnings call ("operating margins expected to remain within the guided range of 15–17%") | Q2: 10.82% standalone / 11.58% consolidated; H1: 14.39% / 14.42% — below band — H1 below the low end; H2 must average ~16%+ | Stretch |
| Q2 FY27 YoY margin improvement | Q1 FY27 earnings call ("YoY margin improvement, as higher-cost inventory starts contributing positively") | Margin fell YoY: −88 bps consolidated, −184 bps standalone | Missed |
| Q2 "possibly slightly better than quarter one" | Q1 FY27 earnings call | Revenue, EBITDA and margin all below Q1 (revenue −10.70% QoQ consolidated) — though Q2 is seasonally weak | Missed |
| FY27 double-digit revenue growth | Q1 FY27 earnings call | H1 +12.54% consolidated / +12.32% standalone; Q2 +13.19% | On Track |
| Industrial double-digit trajectory | Q3 FY26 earnings call | "Good performance of our Industrial... businesses" (press release, qualitative) | On Track |
| Bolix & STP recovery in Q2 | Q1 FY27 call ("good results expected in the current quarter") | "All our subsidiaries and JVs... registered strong growth in topline and operating profit" (press release) — qualitative | Met |
Key Investment Insights
Key Positives
- Consolidated revenue grew 13.19% YoY to Rs.3,200.37 cr; H1 FY27 revenue up 12.54% to Rs.6,784.12 cr
- All subsidiaries and JVs, domestic and international, registered growth in topline and operating profit; subsidiaries/JVs contributed 24.70% of Q2 owners' PAT vs 14.45% in H1 aggregate
- Employee costs grew only 2.49% YoY and other expenses 10.12%, below revenue growth, despite funding the 'Rang Bana Rahe' brand campaign
- Net cash position of Rs.540.65 cr maintained despite Rs.431 cr incremental short-term borrowings; finance costs fell 4.89% YoY
- Hindupur plant (36,000 KL/MT) commissioned September 9, 2026; insurance proceeds from the Barasat warehouse fire realised in cash during Q2
- Effective tax rate declined to 23.91% from 24.85% YoY
Risk Factors
- Consolidated EBITDA margin fell 88 bps YoY to 11.58% and standalone 184 bps to 10.82%, missing management's guided 15-17% band and Q2 margin-improvement guidance
- Cost of materials consumed grew 25.59% YoY vs 13.19% revenue growth; gross margin compressed to 39.31% consolidated from 41.56%
- Standalone operating profit declined 4.39% and PAT declined 7.34% YoY
- H1 CFO/PAT of 0.23x with FCF of −Rs.81.56 cr; inventories built Rs.478.42 cr and receivables Rs.363.41 cr
- Management flags no sign of easing of raw-material inflation; H2 margins of ~14.9-18.1% needed to reach the 15-17% FY band
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.