Berger Paints warns of softer demand due to inflation as FY26 profit falls 4.5%

Berger Paints India Ltd, India’s second-largest paint maker, expects demand to soften as paint manufacturers raise prices to offset the rise in input costs due to the West Asian war.

“Inflation will be on the higher side, which may moderate demand a bit,” chief executive and managing director Abhijit Roy said during a post-earnings interaction with analysts.

Berger Paints has made three price increases since the beginning of April, with the fourth expected on May 15, Roy said. The company expects these gradual price increases to support margins and offset rising raw material costs.

Amit Purohit, senior vice president at Elara Securities, said: “Berger Paints reported high single-digit volume growth in FY26, but rising inflation is now emerging as a key risk to demand and is being closely monitored by the company. Although it ended the year with muted growth, FY27 is likely to be better than FY26.”

The Kolkata-based paint manufacturer is also recalibrating its media strategy to increase brand visibility. According to Roy, Berger Paints India had earlier had a lower presence in sports advertising than its larger rival Asian Paints and new entrants, focusing more on news and general entertainment channels.

“We have reduced spending there and increased our spending on sports this year. So you will see more visibility of our brand on sports channels as well,” Roy said.

Berger Paints said the intensity of competition in the industry remains high, but the aggressiveness of new entrant Birla Opus has diminished as the company focuses on improving profitability. Roy said Birla Opus had signaled a more “responsible” industry approach by increasing dealer prices, narrowing discounts against incumbents and reducing painter incentive schemes. “It is clear from current actions that they are trying to rectify situations and make operations profitable,” he said.

The company said it was also closely monitoring disturbances linked to the West Asian conflict, such as volatility in crude oil-based derivatives, rupee depreciation, supply-side disruptions and potential inflationary pressures.

Profit declines

Berger Paints India’s FY26 profit fell short of analyst estimates as prolonged monsoon reduced demand for premium products and put pressure on volumes, while aggressive competition squeezed pricing power. FY26 net profit attributable to owners fell approximately 4.5%. ₹1,126.87 crore compared to FY25, as per the company’s stock exchange filings. ₹1,133 crore estimate from 25 analysts surveyed by Bloomberg.

Revenue from operations increased by 2.9% ₹11,880.20 in FY26, while earnings before interest, taxes, depreciation and amortization (EBITDA) decreased by 1.2% ₹1833.23 crore.

Revenue from operations increased by 6.1% in 2Q26 ₹2,868.03 crore onwards ₹2,704.03 crore in Q25. Net profit increased by 27.7% ₹334.77 crore in Q2FY26 ₹262.05 crore in Q1FY26, aided by one-time gain from insurance claim.

“The company ended the year with muted revenue growth and low profits, hurt by unfavorable product mix, long monsoon rains affecting premium paint sales, and intense competition keeping prices under pressure,” Purohit said.

West Bengal optimism

While the company expects growth prospects to improve in West Bengal following the change of government in the state, Roy said alignment between the state and central governments could boost infrastructure activities and economic growth.

Berger is “over-indexed” in West Bengal, where it has its headquarters, two factories and a strong brand presence, making the state strategically important for the company, Roy said. He also acknowledged that West Bengal was weak last year, which affected the company’s performance, but added that he now expects “significant growth” from the region, helped by faster infrastructure implementation and stronger economic activity.

Meanwhile, the board of directors recommended Roy be reappointed as chief executive officer and chief executive officer for another four-year term, from July 1, 2027 to June 30, 2031, subject to shareholder approval. Roy, who has led the company since 2012, is credited with strengthening Berger’s market position.