Berger Paints

Berger Paints hit a 52-week high last week at Rs.164 and  this was on the back of the company announcing that its biggest shareholder, UK Paints India had acquired an additional 0.35 million shares in the company from open market purchase. Shares were purchased at an average price of Rs151/share. UK Paints stake stood at 45.56% and it is said to have purchased shares from another of its promoters, Meeta Dhingra.  

The company is on a firm financial footing too. For Q2FY13, it posted a 8% rise in consolidated net profit at Rs.53 crore on a net sales of Rs.808 crore, up 12% and this performance was despite Q2 not being traditionally the ‘season’ for paint companies given the monsoon. Currently it has a 20% market share in Indian paint sector and looking ahead, it is expanding its distribution network to south and west India and is also introducing new product lines. It is also increasing its capacity from 24,000 tonnes per month to 44,000 tonnes which is expected to be completed before end of FY13. It is setting up a new plant at Andhra Pradesh and that is also expected to get its Phase I online in Q4FY13. Many analysts are betting on Berger as the best value investment for future gains as Asian Paints seems to have run up pretty high.