The week ahead is going to be one of the most awaited in recent times for stock brethren. All eyes will be strictly glued to the US Presidential election’s outcome, as it would be a decisive factor for financial markets around the world. The week will also witness the Indian Finance Minister announcing the final tax structure of the unified tax regime, the GST. Both the major benchmark indices, Nifty and the Sensex, trended on a downward bias, closing 1% on the lower side for the week gone by. Sectors in the positive territory like auto and metal were star performers, while IT and pharmaceutical stocks were the biggest drag on the indices. The Sensex closed 156 points down to close the US poll anxiety week at 27,274, while the Nifty fell 51 points to settle at 8,433. The fund flow data was a little mixed, with domestic institutions pumping in Rs 2,580 crore, while the foreign institutional investors were net sellers to the tune of Rs 3,585 crore in the domestic equity markets. The near term picture is confusing for most market men.
Berger Paints Ltd has reported over two-fold rise in its net profit at Rs 161.32 crore for the quarter ended 30 September 2016, as compared to Rs 76.27 crore for the same quarter in the previous year. The total income of the company increased by 7.20% at Rs 1,159.38 crore for the quarter under review, as compared to Rs 1,081.55 crore for the corresponding quarter of previous year. On a consolidated basis, Berger Paints has reported 55% rise in its net profit at Rs 138.78 crore for the quarter ended September 2016, as compared to Rs 89.33 crore for the same quarter in the previous year. The total income of the company has increased by 8.50% to Rs 1,289.75 crore for quarter under review, from Rs 1,288.82 crore for the quarter ended 30 September 2016.
With a modest beginning in India in 1923, Berger Paints Ltd is the second largest paint company in the country, with a consistent track record of being one of the fastest growing paint companies for the past few years. Starting with only one manufacturing unit in West Bengal, the company currently has ten manufacturing facilities, with an international presence in four countries and a combined employee strength of over 2,800 people. The Berger management has announced that margins have been robust due to benign raw material costs and double digit growth in decorative segment volumes. Moreover, the company expects margins to be even better in Q3FY17 on the back of lower advertisement spend, and lower commodity costs, particularly lower oil cost benefit. Unfortunately, on the industrial side, the protective coating segment volumes have still not picked up. Analysts are quite bullish on the Berger stock and term it as an excellent portfolio buy for the medium term perspective. The stock currently quoting at Rs 258 on the Indian bourses can scale to Rs 320 in the next two quarters.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.