Berger Paints Initiating Coverage - Myiris.com

Annexure - II
Growth comparison
Berger Paints Initiating Coverage
Berger Paints Asian Paints
Growth (%) Volume Revenue EBITDA PAT Volume Revenue EBITDA PAT
FY05 15.3 23.0 16.1 31.1 13.2 15.2 8.1 13.3
FY06 11.4 18.8 27.9 22.1 13.8 18.7 20.3 26.4
FY07 13.0 18.9 13.9 17.7 17.8 21.7 19.5 21.1
FY08 14.0 15.0 16.6 11.1 17.5 21.2 31.7 40.4
FY09 3.2 12.6 (5.4) (3.9) 13.4 24.9 3.4 (3.3)
FY10 14.7 11.7 38.8 35.4 16.4 20.0 75.6 86.5
FY11 19.0 24.5 19.6 23.4 16.8 23.4 13.0 14.1
FY12E 14.6 26.0 20.4 15.6 15.1 25.9 16.7 13.7
FY13E 15.0 15.0 24.0 23.7 15.1 14.8 17.3 17.0
Margins and return ratio comparison
Ratios (%)
EBITDA
margin
PAT
margin
Berger Paints Asian Paints
RoE RoCE
EBITDA
margin
PAT
margin
RoE RoCE
FY05 9.7 7.0 29.4 29.6 15.1 9.0 31.8 41.0
FY06 10.4 7.2 32.5 35.0 15.3 9.6 37.1 47.8
FY07 10.0 7.1 32.9 32.7 15.0 9.5 39.3 50.8
FY08 10.1 6.9 29.6 29.8 16.3 11.0 45.0 58.9
FY09 8.5 5.9 23.2 26.3 13.5 8.5 36.0 49.1
FY10 10.6 7.1 23.1 29.5 19.8 13.3 51.2 70.8
FY11 10.2 7.1 22.7 31.3 18.1 12.3 43.3 59.7
FY12E 9.7 6.5 23.2 31.8 16.8 11.1 38.0 53.9
FY13E 10.5 7.0 24.3 33.4 17.1 11.3 34.9 49.9
Raw material mix comparison
Raw material cost
as a % to sales
Pigments Solvents
Berger Paints Asian Paints
Resins and
Oils
Others Pigments Solvents
Resins and
Oils
FY05 11.3 12.9 14.9 13.4 15.8 7.1 7.6 17.8
FY06 10.5 13.6 12.8 13.6 14.7 7.4 7.3 16.6
FY07 11.1 14.9 11.9 15.3 15.8 8.1 8.6 16.2
FY08 9.5 13.4 12.2 16.3 14.7 7.1 8.4 16.5
FY09 10.3 15.2 12.1 14.7 16.2 7.7 8.8 17.0
FY10 11.2 12.1 12.1 13.9 17.0 5.8 7.2 16.1
Note: Standalone financials
Highlights
Emkay Research 27 June 2011 14
Others
� Volumes for Berger Paints and Asian Paints have grown at an average velocity of 1.6x
and 1.9x to GDP, respectively. Only remarkable difference between the growth rates has
been in FY09, when Berger Paints witnessed a weak volume growth of 3.2% against
13.4% for Asian Paints.
� Historically, Berger Paints has witnessed lower margins than Asian Paints. However,
with increasing scale, higher backward integration and shifting product mix towards
premium -end of water based paints; there is a possibility that the margin gap could
narrow in future.
� Similarly, due to Berger Paints’ lower margin profile, the company has relatively lower
RoE compared to Asian Paints. Nevertheless, we expect it to remain at healthy levels of
24%.