Berger Paints Q4 FY26 PAT up 28%, stock jumps 9%

Stock surges after results and brokerage support

Berger Paints India shares saw strong buying interest on Wednesday, May 13, after the company reported its March-quarter (Q4FY26) and FY26 earnings. The stock rose as much as 9.21% to ₹532.75 per share on the BSE, reflecting optimism around volume recovery and margin improvement. At 10:34 AM, the stock traded at ₹517.10, up about 6% from the previous close. The broader market was steady, with the BSE Sensex up 140 points, or 0.19%, at 74,699.

Brokerage commentary added to sentiment, with analysts pointing to a potential industry upcycle in FY27. Their view is that easing competitive pressure and price hikes could support both revenue growth and profitability. The results also showed a clear improvement in quarterly profitability, even as full-year profit declined due to specific one-offs and policy-related cost impacts.

Q4FY26: Consolidated profit up 27.5% year-on-year

In Q4FY26, Berger Paints reported a consolidated profit after tax (PAT) of ₹335.25 crore, up 27.5% year-on-year from ₹262.91 crore in Q4FY25. Consolidated total income from operations rose 6.1% year-on-year to ₹2,868.03 crore from ₹2,704.03 crore. The company also reported EBITDA of ₹481.7 crore in the March quarter, up 12.6% year-on-year.

A key operating highlight was volume growth of 11.8% in the quarter, which the company said was the strongest since Q1FY23. Management attributed the performance to gradual demand improvement, an improved product mix, and softer raw material prices. Gross margin for the quarter stood at 42.3%, which the company described as the highest level seen in the last three financial years.

Standalone numbers show sharper profit growth

Alongside consolidated reporting, Berger Paints disclosed stronger growth in standalone profitability for Q4FY26. Standalone revenue for the quarter came in at ₹2,504.00 crore, up 6.7% year-on-year. Standalone PAT rose 38.1% year-on-year to ₹327.28 crore, compared with ₹236.9 crore in the year-ago quarter. The standalone EBITDA margin reached 18.3%, described as the highest in the past ten quarters.

The company linked margin improvement to mix enrichment and raw material softness. It also cited partial benefits from the withdrawal of anti-dumping duty on titanium dioxide, an input used in paints. These factors helped offset the impact of competitive pricing pressure, especially in the economy segment.

What management said about demand, pricing, and segments

Managing Director and CEO Abhijit Roy said the progressive improvement in demand seen in the previous quarter continued into Q4FY26, supporting healthy volume growth of 11.8%. He added that the performance was aided by a better product mix and softer raw material prices. Berger Paints also said it continues to monitor demand conditions, with a gradual recovery expected across decorative and industrial businesses.

Roy flagged strong performance in the automotive segment, supported by increased demand after GST cuts and lower financing costs. The general industrial segment also saw good growth, according to management commentary. Protective and powder coatings improved month-on-month, suggesting a recovery in growth levels toward the end of the quarter.

On pricing, the company said staggered price hikes introduced from March onwards are expected to support gross margins amid rising raw material costs. Roy specifically referred to a calibrated price increase of over 11% initiated in a staggered manner from end-March 2026.

FY26: Revenue growth, but profit fell due to labour codes and a one-off

For the full year FY26, Berger Paints reported consolidated revenue from operations of ₹11,880.3 crore, up 2.9% year-on-year. Consolidated net profit for FY26 was ₹1,128.8 crore, down 4.6% from the previous year, while FY26 EBITDA declined 1.2% year-on-year to ₹1,833.3 crore.

The company said annual profitability was impacted by the implementation of newly notified labour codes and a one-time loss arising from a warehouse fire in Barasat, West Bengal. Even with these headwinds, management said it expects operating margins to remain within the guided range, supported by cost optimisation and the benefit of pricing actions.

Brokerages: ICICI Securities and Equirus remain constructive

ICICI Securities retained its ‘Add’ rating, citing Berger’s potential to gain market share as the paint industry recovers in FY27. The brokerage revised its DCF-based target price to ₹550 from ₹530 earlier, implying a target P/E of 40x on FY28E EPS. ICICI Securities said the target implies an upside of nearly 3.23% from the current market price referenced in its note.

The ICICI Securities team of Aniruddha Joshi, Manoj Menon, Akshay Krishnan, and Aniket Kamble expects FY27 to be a turnaround year for Berger and the broader paint industry after a weak FY24–26 period. The reasons cited included price hikes in the low teens and a revival in volume growth. The analysts also noted that as Birla Opus raised prices more than peers, competitive intensity has likely eased.

Equirus Securities retained its ‘Long’ rating, highlighting steady volume growth with market share gains and a stable margin profile. Equirus cut FY27 and FY28 EPS estimates by 5% and 3%, respectively, to factor in higher raw material costs. It set a June 2027 target price of ₹577 (from ₹578 earlier), pegged at 46x TTM EPS of ₹12.6, implying an upside of nearly 8.30% from the current market price referenced in its report.

Guidance and margin cues: 15%–17% remains the band

On margins, Equirus expects EBITDA margins to remain within the guided 15%–17% range, with FY27 likely at the lower end. ICICI Securities, however, said a reduction in competitive intensity, operating leverage, and cost-saving initiatives could drive EBITDA margin upwards in FY27 over the favourable base of FY26, which it noted at 15.4%.

Both notes underline the same variables investors will track: the extent of price hike pass-through, raw material movements, and how quickly the industry returns to healthier value growth. Equirus also pointed to a narrowing value-volume gap of around 5% in Q4FY26 and expects the gap to reverse in FY27 as price hikes flow through.

Key risks highlighted by the company

Berger Paints cautioned that global and macro developments remain important watchpoints. It specifically flagged developments in West Asia, volatility in crude-linked derivatives, rupee depreciation, and supply-side disruptions as factors that could add inflationary pressure. These risks matter for a paint manufacturer because many inputs are linked to crude derivatives and global supply chains.

The company’s commentary suggests it is preparing for a period where pricing and procurement discipline will be tested, even as demand indicators improve. This is also why brokerages have built in some conservatism through EPS estimate cuts, despite constructive medium-term views.

Key numbers at a glance

Broker targets and ratings

Market impact and why the results mattered

The immediate market reaction reflected two clear positives from the March-quarter print: strong volume growth and improved profitability. The 11.8% volume growth signal mattered because it suggests demand recovery is broadening after a weak FY24–26 period referenced by analysts. Gross margin at 42.3% also reinforced the view that mix and input-cost trends helped the quarter.

For investors, FY26 full-year profit decline highlighted that one-offs and cost changes can still affect earnings quality. The company’s reference to labour codes and the Barasat warehouse fire provides context for why a strong quarter did not translate into full-year profit growth. Brokerages, meanwhile, focused on FY27 as a potential inflection year, but also acknowledged raw material risks by trimming EPS estimates.

Conclusion

Berger Paints’ Q4FY26 results delivered a sharp year-on-year jump in profit, backed by 11.8% volume growth and improved margins, driving a strong stock move on May 13. Management expects staggered price hikes and cost optimisation to help protect margins, while monitoring macro risks such as crude volatility and currency movement. Brokerages maintained positive ratings, with ICICI Securities raising its target to ₹550 and Equirus reiterating a June 2027 target of ₹577. Investors will watch how price increases flow through in FY27 and whether demand recovery sustains across decorative and industrial segments.