Berger Paints India, the country’s second-largest paints company, is expecting revenues to double to about `20,000 crore in the next five years, led by an overall growth in its paints business. The company has also earmarked a capex of about 400 crore for FY24.
“We have posted `10,560 crore in revenues in FY23. We have been posting a CAGR of 15% for the past 22 years, and that during the last three years has been in excess of 18%.
“If we grow at 14.5% also in the next five years, we will double our revenues from `10,000 to `20,000 crore and that plan is definitely on track,” Berger Paints MD & CEO Abhijit Roy told FE in an interview.
The growth would come in from decorative business which has a lot of scope for expansion and distribution. “The second is the protective coatings and general industries categories, where infrastructure spending is on the rise, and the third growth opportunity is in the construction, chemical and waterproofing segment,” he added.
However, the capex for this year — which includes expenses related to refurbishment and capacity expansion across existing factories — would be lower than about `1,100 crore spent for FY23.
The FY23 capex was higher due to the setting up and commencement of commercial production at its Sandila plant in Uttar Pradesh. The firm has invested more than `1,000 crore in the plant, which is expected to cater to the rising demand for its products and bring down production cost.
Following the commencement, its production rose to 95,000 metric tonne from the earlier 63,000 metric tonne per month.
A part of the capex would also be used to hike production capacity by another 5,000 metric tonne, which he added. On the competition that is hotting up in the industry, Roy said it was not a great threat to Berger Paints and he would continue to focus on what it had been doing.
“We have our own strengths, we have our own plan of action.”
On its organic expansion plans, Roy said that the company has already acquired land in Panagarh, West Bengal and is awaiting approvals, including environment clearances, which would take another 8-9 months. It would take another 12-18 months to finish construction while the company is scouting for land in Odisha.
The company, which is focused on paints and water-proofing segment primarily in India, would also go in for acquisitions if a “right buy” comes by.
By February, the demand from the rural segment bounced back, which was maintained in March and April, and with the expectations of a good monsoon, demand is expected to be strong going forward. Berger Paints will also celebrate its centenary year of operations in India, with it completing 100 years in December this year.