#PAT #GROWTH 5 Year CAGR 12.6%

During CY23, the PAT stood at ₹658 cr, recording a growth of 17% YoY. The impact of foreign exchange movement was not favorable as compared with the same period last year. During 9M CY24, the PAT stood at ₹459 cr, recording a growth of 2.4% YoY. The effective tax rate of the company inched up on account of increase in tax rates in one of the ex-India jurisdictions.

#Management

Mr. Yann Le Pallec is Executive Managing Director and Global Head of Ratings for S&P Global Ratings. He oversees a group of 2,200 analysts and support staff present in 28 countries and covering more than one million outstanding ratings on entities and securities across a wide range of sectors including governments, corporations, financial institutions and structured finance. Amish Mehta is the MD and CEO of CRISIL. He leads CRISIL’s Indian and global businesses, steering its efforts to deliver high-quality analytics, opinions & solutions to corporations, investors, financial institutions, governments. policymakers and The management believes that the two pillars of business growth & traction would be talent and technology. They would continue to invest in the same over medium to long term which would drive the revenue.

#Future #Plans

• In CY23, wholesale bank credit is expected to maintain its growth trajectory in comparison to the past two years, supported by continuing economic recovery and higher working capital funding requirements in an inflationary environment. • Beyond the credit growth certain structural changes from SEBI like framework for AA and above rated companies to borrow 25% from the bond market, incentives from RBI to corporates to borrow from bond market rather than banks, could auger well for the bond market. • This year has another geopolitical risk in the form of elections in more than 60 countries, including US. The outcome of these elections has potential to impact global business sentiments. • They would make accelerated investment towards talent and technology. • They would also continue to focus on customer centric innovation and solutions which would address the niche needs of their clients. • They continue to focus on expanding their reach to Tier 2 & Tier 3 institutions through its partnership channels in the research division. • They anticipate the capital market issuances will revive in the H2 CY24 with softening interest rates and gradual revival of private sector capex. • As majority of the revenue is generated outside India, so the company faces the currency risk which would be a key monitorable factor going forward. • They continue to drive opportunity in emerging markets, Middle East, South Asia and Africa for the infrastructure advisory space. They are also in discussion across multilateral agencies and different countries to increase investments on infrastructure. • The ESG rating is likely an opportunity for the company in the ratings business, going forward.

CRISIL 4800-5240
Expected level 6000
Support 4400

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Tata Consumer 870-970
Expected level 1200
Support 800

Nuclear Energy Stocks in India 🏭

1.NTPC – builds Nuclear Power Plants 

2.BHEL - builds Nuclear Power Plants

3.Hindustan Construction Company (HCC) - builds Nuclear Power Plants

4.MTAR Tech - makes components for Nuclear Reactors 

5.Power Mech Projects – makes components for Nuclear Reactors 

6.Walchandnagar Industries - makes components for Nuclear Reactors 

7.  Kirloskar brother: Global leader in manufacturing pumps for nuclear power plants

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Jefferies on Sun Pharma 💊

● Buy Call: Target Price ₹2,150/share 📈
● Peak Sales: Latest cancer treatment assets could hit $100M 🎯
● Other Trials: Indications still in trials, offering optional value 🔬
● Sales Outlook: Peak sales seen as modest 📉
● Cost Leverage: Existing infra can commercialize products with minimal cost 🏭
● NPV Impact: Combined NPV of $380M (<1% of market cap) 💼

Motilal Oswal on RELIANCE INDUSTRIES ⚡

● Buy Call: Target Price ₹1,580/share 📈
● Risk-Reward: Compelling with improving FCF generation 💰
● Reliance Jio: Tariff hikes, market share gains, and FWA ramp-up to drive growth 📡
● Reliance Retail: Growth recovery critical for re-rating 🛒
● O2C: Refining margin recovery underway; Petchem remains soft 🛢️

Motilal Oswal on Tata Power ⚡

● Buy Call: Target Price ₹509/share 📈
● Growth Vision: EBITDA & PAT to double by FY30 🚀
● Renewables Focus: Share in PAT to rise to ~50% by FY30 (FY24: 21%) 🌞
● Decline in Coal: Conventional generation & coal share to drop to 11% by FY30 🏭
● Capex Surge: ₹1.46 lakh crore planned over 5 years, 3x the previous period 💸

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Berger Paints India Limited Company Research Report

Berger Paints India Limited is a leading paint company in India with 29 manufacturing units globally, including 25 in India (including subsidiaries), 2 in Nepal, and one each in Poland and Russia. The company launched 43 new products during the year. In FY24, its capacity stood at 1.27 million metric tonne. In the decorative paints sector, Berger Paints is the second-largest company in India. It leads in protective and infrastructure coatings, and is a notable player in auto paints, serving two-wheelers, commercial vehicles, and tractors, as well as passenger cars, threewheelers, and SUVs through a joint venture with Nippon Paints. The company is also dominant in the general industrial segment, supported by its subsidiary SBL Specialty Coatings Ltd., and extends its services to white goods and consumer durables through powder coating, which contributes a smaller share to its overall revenue mix. Company’s Prolinks division, catering to the B2B and architectural segment looks into the protection and aesthetic needs of landmark and heritage buildings, flyovers, metro stations, airports as well as large residential complexes and industries in all parts of the country and are addressed by a specialized business team. The Berger’s Protecton caters to pipe coatings, refinery projects, railways, iron and steel plants, road marking business, thermal power plants, floorcoating and airport. Protecton has coated more than 5,000 Rajdhani coaches in the last two years. Its involvement in key ventures like Vande Bharat and projects at the Rajasthan Refinery and Lucknow Adani Airport underscores its leadership position and continued advantage in the infrastructure landscape. The company's pan-India presence is reinforced by a robust distribution network of over 64,000 dealers and retailers. In Q2 FY25, the company undertook distribution expansion and added 2,200 retail touchpoints. Additionally, 2,000 Colorbank machines were added, and new advanced machines were acquired for R&D activities. Notable projects in the powder coating business included Chenab Bridge, IICC (India International Convention & Expo Centre) Yashabhoomi and Chennai airport. The company has five wholly-owned subsidiaries: Beepee Coatings Private Limited in Gujarat, Berger Paints (Cyprus) Limited and Lusako Trading Limited in Cyprus, Berger Jenson & Nicholson (Nepal) Private Limited in Nepal, and SBL Specialty Coatings Private Limited in Chandigarh.

#SALES #GROWTH 5 Year CAGR 13.1%

In FY24, the net sales increased by 6% YoY and stood at ₹11,199 cr. Value and volume growth were 5.6% and 11.6%, respectively, with value growth moderating due to product price reductions. Projects business constitutes ~8% of decorative paints category. In the industrial segment, the Protective Coating business maintained its market dominance, achieving consistent growth and profitability enhancements. In H1 FY25, revenue witnessed a growth of 1% YoY at ₹5,866 cr. Volume growth outpaced value growth, however still remained moderate due to extended monsoon and flooding in certain key markets. Price hike of ~2.3% was undertaken in Q2 FY25. During the quarter, premium and luxury products witnessed good traction with double-digit volume growth.

#EBITDA #GROWTH 5 Year CAGR 14.7%

In FY24, EBITDA stood at ₹1,861 cr and grew by 25% YoY. Softening of raw material prices compared to previous years led to this growth. To address the drop in raw material prices, the company implemented two price cuts: ~1.2% in November 2023 and ~4% in mid-January 2024. In H1 FY25, EBITDA de-grew by 7% YoY to ₹957 cr impacted by high cost inventory. However, moderation in the cost was witnessed in September 2024. Employee cost increased by 16% as additional manpower was hired to increase penetration in the urban markets. Gross profit improved by 2% to ₹2,390 cr on the back of improvement in product mix.

#PAT #GROWTH 5 Year CAGR 18.8%

In FY24, the net profit growth was 29% YoY at ₹1,129 cr. Majority of the growth can be attributed to rise in operating profit and also there was profit from its joint venture entities which had reported losses last year. Tax rate for the year was ~25%. In H1 FY25, PAT stood at ₹605 cr, decreasing by 5% YoY. Other income doubled to ₹57 cr from ₹29 cr in H1 FY25.

#EBITDA #MARGIN

In FY24, the EBITDA margin was 16.6% and expanded by ~255 bps. Gross margin increased by ~440 bps. The disparity in gross margin and EBITDA margin was due to additional advertising expenses and extra costs associated with the new Sandila plant. EBITDA margin contracted by 150 bps YoY to 16.3% in H1 FY25 majorly due to increased employee cost. Gross margin expanded by 30 bps on a YoY basis at 40.7%.

#PAT #MARGIN

In FY24, the PAT margin increased to 10.1%. The rise can be attributed to increase in operating profit. In H1 FY25, it stood at 10.3% down by 71 bps YoY led by depreciation & amortisation expense which increased by ~9% YoY.

#MANAGEMENT #MESSAGE

Abhijit Roy, MD & CEO of the company, graduated in Mechanical Engineering from Jadavpur University, Kolkata and completed his post graduation in Business Administration from IIM Bangalore. He started his career with Asian Paints Limited and prior to joining Berger was associated with L'oreal. He was appointed as the Managing Director & CEO with effect from 1st July 2012. Kaushik Ghosh was appointed as the Vice President & CFO w.e.f. 12th Jan 2023. He started his career with McNally Bharat Engineering Company Limited as Assistant Manager. He joined Berger Paints India Limited in June, 2000 as Assistant Manager – Internal Audit. During his 22 plus years stint with Berger Paints he has worked in various capacities.

#Company #Outlook

• The Indian paints and coatings industry market size in FY24 was $9.56 billion (₹80,000 crore), with the decorative paints segment comprising 75% and the industrial paints segment comprising 25%. • Key drivers of the paint industry in India include growing residential demand, increasing need for contemporary office space, and the expanding hospitality and retail sectors. Additionally, a growing population, rising income levels, and the Indian Government’s emphasis on affordable housing further boost the real estate sector's growth, contributing to the paint industry's momentum. • The Indian Government’s constant focus on enhancing the country’s infrastructure has led to increased investment, thereby accelerating the demand for industrial paints. in urban centers in India. and superhydrophobic coatings. • Robust economic activities in the country drive growth in consumer durables, automobiles, and allied industries, leading to strong demand for coatings. The urbanization rate, currently at 36.5%, is expected to rise to 42.5%, with 164 million households residing • Customers seek durable paints that can withstand harsh weather, wear, stains, dirt, mildew, and corrosion. The industry responds by innovating with advanced technologies such as nanotechnology, smart coatings, self-healing coatings, antimicrobial coatings, • With rising incomes and higher aspiration levels, the repainting cycle is steadily declining, leading to increased demand for paints in the country. The repainting cycle is estimated to shorten from 6.9 years in 2019 to 5.6 years by 2031.

#Future #Plan

Better capacity utilisation is expected at its Sandila plant this year. The Sandila plant in Uttar Pradesh commenced commercial production on 6th February 2023. Spanning 37 acres, it is the largest manufacturing facility in India, designed to enhance long-term profit margins. This state-of-the-art, automated plant reduces production costs while maintaining quality and consistency. It produces a variety of products, including water-based and solvent-based paints, construction chemicals, and emulsions. • The decorative business is projected to sustain strong throughout FY25, albeit with a slightly lower value growth. The industrial business is anticipated to perform well and uphold its robust profitability. planning, enabled just-in-time delivery, and ensured operational efficiency and cost-effectiveness. • Expansion has also taken place at the Rishra plant and Beepee Coatings plant in Gujarat, a subsidiary, to reduce reliance on external vendors for intermediate binder procurement in polymeric emulsion manufacturing. This has improved production • The Odisha Industrial Infrastructure Development Corporation has allocated approximately 80 acres in Kalibeti, Khurda, Odisha, for a new manufacturing unit producing paints, intermediates, and allied products with an annual capacity of about 4,10,000 KL/MT. The planned facility will feature modern, environmentally sustainable technology. Additionally, 29 acres have been acquired at Panagarh Industrial Park, West Bengal, for a construction chemicals, putty, and resin manufacturing plant. This plant is expected to be commissioned by the end of 2025, pending necessary approvals. • The company plans on increasing its presence in the urban markets, where it currently has ~10% market share. It aims to increase the market share to ~12%-12.5% in the near term and reach ~15% in the next 2-3 years. A new team is in place for the same, since CASE STUDY August 2024.