Bright Q3 at paint firms drives earnings upgrades, crude price a concern

Improving urban demand, revival in construction activity paint a rosy picture, but high valuations and rising input costs are concerns

Paint companies have been trending on the bourses, with the recently concluded December quarter (Q3) results being a major factor. Asian Paints, Berger Paints, and Kansai Nerolac — the industry’s big three — reported better-than-expected numbers in the seasonally strong quarter.

Berger paints — the last of the three to post its Q3 results — on Tuesday reported its highest ever quarterly sales, earnings before interest, tax, depreciation and amortisation (Ebitda), as well as net profit for Q3.

Revenue jumped 25 per cent year-on-year (YoY) to Rs 2,118 crore, led by the 32-per-cent growth in decorative segment volumes, similar to industry leader