In a move aimed at rewarding its shareholders and further enhancing investor sentiment, Berger Paints announced a bonus issue of shares in a 1:5 ratio. The decision was unveiled along with the company’s impressive financial results for the first quarter of the fiscal year. The bonus issue, which is subject to shareholder approval, entails the issuance of one bonus share with a face value of Re 1 each for every five shares held, also with a face value of Re 1 each.
Berger Paints, one of the leading paint manufacturers in India, reported a robust net profit growth of 39.9 per cent Year-on-Year (YoY) for the quarter ending June 30. The net profit surged to Rs 354.91 crore, marking a substantial increase from the Rs 253.71 crore recorded during the corresponding quarter in the previous year. The company attributed this remarkable growth to a combination of favorable raw material costs and operational efficiencies.
The company’s performance in terms of revenue was equally impressive, with revenue from operations witnessing a significant YoY growth of 9.8 per cent. The revenue surged from Rs 2,759.70 crore in the same quarter of the previous year to Rs 3,029.51 crore. This substantial growth was underpinned by high double-digit volume expansion, driven by strong demand across both urban and rural markets.
One of the key highlights of Berger Paints’ first-quarter performance was the robust Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) excluding other income. For the quarter ending June 30, the EBITDA stood at Rs 556.75 crore, representing a remarkable 37.5 per cent increase from the Rs 404.84 crore recorded during the corresponding period of the previous year.
Mr. Abhijit Roy, the Managing Director and CEO of Berger Paints, expressed his satisfaction with the company’s performance and its ability to surpass its own benchmarks. “Berger Paints continued to deliver on its promise of excellence and outperformed the market. The decorative business saw double-digit growth both on value and volume fronts on high bases. Our operating profit-to-sales percentage also increased substantially to 18.8 per cent, a growth of 37.5 per cent and a 2-year CAGR of 52.5 per cent,” said Mr. Roy.
The bonus issue announcement serves as an additional boost to shareholders’ confidence in the company’s growth trajectory. Such initiatives are often perceived positively by investors as they not only enhance the overall shareholding but also indicate the company’s confidence in its future performance.
The decision to issue bonus shares reflects Berger Paints’ commitment to rewarding its shareholders while maintaining its competitive edge in the market. The gesture also aligns with the company’s vision of creating long-term value for its stakeholders.
As with any corporate action, the bonus issue is subject to the approval of the company’s shareholders. Typically, such decisions are voted upon during the Annual General Meeting (AGM) of the company. Once the proposal receives the necessary shareholder approval, eligible shareholders will be entitled to the bonus shares as per the defined ratio. This issuance essentially increases the number of outstanding shares without affecting the company’s underlying fundamentals, such as assets, earnings, and net worth.
Berger Paints’ announcement of the bonus issue, combined with its strong Q1 financial performance, underscores the company’s commitment to sustaining its growth trajectory and rewarding its shareholders. As the global and domestic economic landscapes continue to evolve, the company’s strategic initiatives and prudent financial management will likely play a pivotal role in driving its future success.
In conclusion, Berger Paints’ decision to declare a bonus issue in a 1:5 ratio, coupled with its impressive Q1 results, demonstrates the company’s strong financial health and growth prospects. This move is expected to garner positive reactions from investors and analysts alike, positioning the company on a favorable trajectory for the quarters ahead.
