Shares of Berger Paints India were trading in the red on Tuesday despite the firm’s fully automated manufacturing facility at Sandila commencing production on Monday. Berger Paints stock opened on a flat note at Rs 564.50 against the previous close of Rs 563.50 on BSE. The stock touched an intraday low of Rs 553.30, falling 1.81% on BSE. The stock has fallen after 2 days of consecutive gain.
Share of Berger Paints was trading 4.92% away from 52 week low of Rs 527.60 hit on February 3, 2023.
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Berger Paints stock price is trading higher than the 5 day moving averages but lower than 20 day, 50 day, 100 day and 200 day moving averages.
The share has fallen 6.5% in a month. Year-to-date, the stock is down 4.2% and lost 22.5% in one year. Market capitalisation of the firm fell to Rs 54,422 crore.
Total 0.11 lakh shares of the firm changed hands amounting to a turnover of Rs 63.7 lakh on BSE. The market cap of the firm fell to Rs 54,495 crore.
“The company’s state-of-the-art, fully automated manufacturing facility at Sandila Plot No. 84, 85 Industrial Area, Sandila Phase I, Sandila, District: Hardoi, Uttar Pradesh – 241 204 has commenced its commercial production today. l.t is the largest manufacturing facility of the Company in India with capability to produce 15000 KUMT per month of water-based paint, 4800 KL per month of solvent-based paint, 7000 MT per month of putty, 6000 MT per month of construction chemicals, 2000 MT per month of resin and 6000 MT per month of emulsion under one roof. The Company has made an investment of more than Rs 1000 crore for setting-up the said manufacturing facility and the facility is expected to cater to the rising demand for the Company’s products and bring down its cost of production,” the company said on February 6.
Berger Paints logged a 20.5% on-year decline in its consolidated net profit for the December quarter to Rs 201.17 crore . Revenue climbed 5.6% YoY to Rs 2,693.59 crore in the quarter.
EBITDA in the December quarter was Rs 349.65 crore as against Rs 392.11 crore in the corresponding quarter of last year, signaling a decline of 10.83%.
On a standalone basis, net profit fell 5.99% to Rs 207.10 crore as against Rs 220.29 crore in the corresponding quarter of last year.
Abhijeet from Tips2trade said, “Rs 569 will be a strong resistance on Daily charts. A daily close above this level could lead to targets of Rs 582-600 in the near term. Support will be at Rs 539.”
Religare Broking has assigned a buy call to the stock with a target price of Rs 766 against the current market price of Rs 556. This implies an upside of 37.7% for the paints manufacturer.
“On the financial front, we incorporated the high cost of raw materials of Q3 impacting overall margins of FY23E and added FY25 estimates wherein we expect revenue/PAT to grow at 21%/23.8% FY22-25E. We maintain a Buy rating but have revised our target price downwards to Rs 766, giving a PE multiple of 47x FY25E EPS,” said the brokerage.
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