ET NowIn a chat with ET Now, Abhijit Roy, MD, Berger Paints, shares his business outlook. Excerpts:
ET Now: At 10% top line growth, you've had a good quarter. How does the current scenario look like?
Abhijit Roy: Volume growth was much higher at around 14%; the value growth came in at 10%. We could have done slightly better than what we have done in the top line.
As for the bottom line, no complaints really. It was mostly due to the drop in raw material prices. Some of it is also due to a change in the mix — both on the decorative and industrial side.
As regards future prospects, I think we should continue on similar lines on the profit side. As far as the demand side — which is the revenue driver — is concerned, I think it will be more or less similar to what the third quarter was.
ET Now: What has been the exact amount of saving because of decline in crude/raw material prices?
Abhijit Roy: Most of the uptick we've seen is because of the fall in crude prices. If you talk of percentage, it will probably be around 75%. The rest, 25%, will be because of the change in the mix that I've spoken of.
ET Now: That volume growth was driven by festive demand. What about the period after that?
Abhijit Roy: You are right in saying that that October was a big month for most of the paint companies. The season got postponed a little bit this year; therefore everyone had an advantage.
January was relatively okay as well. It was probably due to the fact that this winter has been relatively mild in the northern areas. Normally in peak winters, paints sales tend to go down. But that has not happened this time. So, I think this quarter should also be reasonably good.
ET Now: What has been the market share for you as of now?
Abhijit Roy: We have gained a little bit in terms of market share. On an YTD basis, we are ahead of all other paint companies. We are seeing the highest growth rate — at least in decoratives.
I would not say that the gain in market share is significantly visible, but it is moving upward all the same. We are hoping that this trend will continue in the near future as well.
ET Now: Is 14% volume growth sustainable?
Abhijit Roy: Our volume growth on YTD basis is near about 11-11.5%. I do think that is sustainable. At least so far it looks like it.
ET Now: At 10% top line growth, you've had a good quarter. How does the current scenario look like?
Abhijit Roy: Volume growth was much higher at around 14%; the value growth came in at 10%. We could have done slightly better than what we have done in the top line.
As for the bottom line, no complaints really. It was mostly due to the drop in raw material prices. Some of it is also due to a change in the mix — both on the decorative and industrial side.
As regards future prospects, I think we should continue on similar lines on the profit side. As far as the demand side — which is the revenue driver — is concerned, I think it will be more or less similar to what the third quarter was.
ET Now: What has been the exact amount of saving because of decline in crude/raw material prices?
Abhijit Roy: Most of the uptick we've seen is because of the fall in crude prices. If you talk of percentage, it will probably be around 75%. The rest, 25%, will be because of the change in the mix that I've spoken of.
ET Now: That volume growth was driven by festive demand. What about the period after that?
Abhijit Roy: You are right in saying that that October was a big month for most of the paint companies. The season got postponed a little bit this year; therefore everyone had an advantage.
January was relatively okay as well. It was probably due to the fact that this winter has been relatively mild in the northern areas. Normally in peak winters, paints sales tend to go down. But that has not happened this time. So, I think this quarter should also be reasonably good.
ET Now: What has been the market share for you as of now?
Abhijit Roy: We have gained a little bit in terms of market share. On an YTD basis, we are ahead of all other paint companies. We are seeing the highest growth rate — at least in decoratives.
I would not say that the gain in market share is significantly visible, but it is moving upward all the same. We are hoping that this trend will continue in the near future as well.
ET Now: Is 14% volume growth sustainable?
Abhijit Roy: Our volume growth on YTD basis is near about 11-11.5%. I do think that is sustainable. At least so far it looks like it.
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