Berger Paints Stock Falls as NSE Delists It from F&O Segment
Berger Paints Stock Falls : The stock of Berger Paints India Ltd witnessed a decline of up to 2% after the National Stock Exchange (NSE) announced its decision to remove the company from the Futures & Options (F&O) segment. This move has sparked investor concerns, leading to bearish sentiment around the stock.
Stock Price Movement
With a market capitalization of ₹56,802.39 crore, Berger Paints’ share price was trading at ₹487.20 per share, down nearly 1% compared to the previous close of ₹491.65 apiece. The removal from the F&O segment has contributed to this decline, raising questions about the company’s short-term prospects.
Why Did NSE Remove Berger Paints from F&O?
The NSE decided to exclude Berger Paints from the F&O segment, effective April 25, 2025. The existing unexpired contracts for February, March, and April 2025 will continue to trade until their respective expiry dates, with new strike prices introduced for the existing contract months.
The decision comes as part of NSE’s periodic review, where stocks are assessed based on trading volume, liquidity, and market interest. Companies with low derivative trading volumes or failing to meet specific eligibility criteria are removed from the F&O segment. This exclusion generally reduces speculative trading in the stock, sometimes leading to short-term price fluctuations.
Financial Performance Overview
Despite the stock’s recent dip, Berger Paints’ financials remain stable. The company reported a 3.2% rise in revenue, increasing from ₹2,882 crore in Q3FY24 to ₹2,975 crore in Q3FY25. However, its net profit declined by 1.3%, falling from ₹300 crore to ₹296 crore in the same period.
Product Performance
The decorative paint segment witnessed high single-digit volume growth, primarily fueled by increased demand for waterproofing and construction chemicals. The company expanded its exterior premium category significantly, adding:
- 2,000+ new retail touchpoints
- 1,800 color bank machines
Berger Paints also enhanced its urban presence by launching exclusive brand stores, improving customer engagement before purchase.
Competitive Landscape and Market Challenges
Berger Paints faces rising competition, with a new entrant capturing 3.5% of the market share. However, the management remains optimistic about countering the impact through aggressive distribution expansion and urban-focused initiatives. Despite competitive pressures, Berger Paints aims to maintain its market position and restore growth.
Margin Outlook and Future Growth
The company expects operating margins to remain within 15-17%, despite challenges such as fluctuations in raw material prices and competitive pricing pressures. Several factors are expected to drive growth in the coming quarters:
- Improved consumer sentiment
- Favorable government budget policies
- Stabilizing pricing trends in the paint industry
Management is also confident about narrowing the gap between volume and value growth as the effects of past price cuts fade.
Company Profile
Berger Paints India Ltd is one of India’s leading paint manufacturers, offering a range of products including:
- Interior & exterior wall coatings
- Exterior textures
- Metal and wood finishes
- Waterproofing solutions
With a strong retail presence and expanding product lines, the company remains a key player in the Indian paint industry.
Key Financial Ratios & Market Indicators
Below is a detailed financial snapshot of Berger Paints:
| Metric | Value |
|---|---|
| Market Cap | ₹57,321 Cr. |
| Current Price | ₹491 |
| 52-Week High/Low | ₹630 / ₹438 |
| Stock P/E | 50.3 |
| Book Value | ₹48.0 |
| Dividend Yield | 0.71% |
| ROCE (Return on Capital Employed) | 27.5% |
| ROE (Return on Equity) | 23.5% |
| Face Value | ₹1.00 |
| Promoter Holding | 75.0% |
| Debt-to-Equity Ratio | 0.14 |
| P/E Ratio | 50.3 |
| Pledged Percentage | 0.00% |
| QoQ Profits Growth | 9.66% |
| Quarterly Profit Variation | -1.51% |
| Industry P/E | 40.5 |
| Graham Number | ₹103 |
| Intrinsic Value | ₹128 |
| RSI (Relative Strength Index) | 57.6 |
| EPS (Earnings Per Share) | ₹9.78 |
| Total Equity Shares | 117 Cr. |
| PEG Ratio | 2.63 |
| 200-Day Moving Average (DMA) | ₹511 |
| Free Cash Flow (Last 3 Years) | ₹1,359 Cr. |
| Current Free Cash Flow | ₹1,321 Cr. |
| Total Debt | ₹797 Cr. |
Conclusion
While the NSE’s decision to remove Berger Paints from the F&O segment has led to short-term volatility, the company’s financial fundamentals remain strong. With a strategic focus on urban expansion, waterproofing solutions, and premium products, Berger Paints aims to sustain growth despite market competition.
Investors should closely monitor future earnings reports, competitive landscape developments, and broader industry trends to gauge the stock’s long-term performance.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.