Berger Paints Vs Indigo Paints: India is a nation witnessing rapid development, marked by a continuous surge in infrastructure and home construction. Regardless of the project’s complexity, its essence remains incomplete without the transformative touch of paint. Two such companies that work in this sector are Berger Paints and Indigo Paints.

In this article, we shall conduct a detailed comparison of Berger Paints Vs Indigo Paints and find out which of the two companies has a better outlook for the future.

Berger Paints Vs Indigo Paints

Industry Overview

Paint and coating: The Indian paint industry is currently experiencing a gradual shift in consumer preferences from traditional whitewashing methods to a preference for high-quality paints such as emulsions and enamel paints. This change in consumer choice is the main driving force behind the growth and stability of the Indian paint industry. The industry was valued at ₹62,000 Crore in FY23 and is expected to grow significantly, reaching a market size of ₹1 lakh Crore by FY28.

Construction Chemical: The construction chemicals market has been growing consistently in recent years and is expected to continue doing so. The key driver of this growth is the increasing demand for construction chemicals that offer both durability and sustainability. As the construction industry prioritizes sustainable building practices, there is a rising need for chemicals that enhance the longevity and resilience of structures while minimizing their ecological impact. 

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The construction chemicals market in India is currently valued at $1,617.8 million in 2023 and is expected to grow at a compound annual growth rate of approximately 13.1%. By 2033, the market is projected to reach a valuation of $5,541.8 million.

We learned a little about the industry in which the firms operate in the preceding part. Now, we’ll look at the similarities and differences between their businesses for our Berger Paints Vs Indigo Paints comparison.

Berger Paints

Berger Paints Logo

Berger Paints, formerly known as Hadfield’s Limited was founded in 1923. Today, the company has become India’s 2nd largest paint company and holds 7th position among the top 15 companies globally.

Currently, the company manufactures decorative and industrial products, including interior and exterior paints, wood finishes, metal coatings, and waterproofing solutions.

Under the industrial segment, the company has several reputed customers, some of which include: Tata Motors, Ashok Leyland, Mahindra & Mahindra, Hero MotoCorp, Royal Enfield, Force Motors, Tata Hitachi, Crompton, Orient, Havells, 

Furthermore, the company has conducted its business in 28 States and 8 Union Territories in India.

The company operates through its 25 manufacturing plants (including plants of subsidiaries) in India, along with two in Nepal, one each in Poland and Russia. It also has f over 60,000 dealers and retailers and 184 stock stations, which enables it to reach customers across residential, commercial, and industrial sectors. 

Indigo Paints

Indigo Paints Logo

incorporated in 2000, Indigo Paints Limited is an Indian multinational paint manufacturing company headquartered in Pune, Maharashtra. The company initially started with lower-end Cement paint manufacture and today stands out as one of the strongest players in the Indian paint industry.

The company has a product portfolio that encompasses a wide range of paints, including emulsions, enamels, waterproofing solutions, wood coatings, primers, putties, and cement paints. The Company has also acquired a 51% stake in Apple Chemie, which has given it expertise in waterproofing and construction chemicals.

The company operates through 5 manufacturing facilities located in Rajasthan, Kerala, and Tamil Nadu. It has an extensive dealer network spread across 28 states in India, with approximately 16,496 active dealers, 8,273 tinting machines, and 47 Depots.

Berger Paints Vs Indigo Paints – Financials

Revenue Growth

If we look at both companies’ financials, we can see that both have consistently increased their earnings year on year.

While Berger Paints has a greater revenue than Indigo Paints, the latter has a greater CAGR growth from FY19 to FY23.

During FY23, Berger Paints’ revenue from operations was reported at ₹10,568 Crores giving it a 4-year CAGR of 14.91%. On the other hand, Indigo Paints’ revenue from operations has grown at a CAGR of 18.98% and reported operating revenue of ₹1,073.33 crores during FY23.

The table below showcases the total revenue growth of Berger Paints Vs Indigo Paints for the last five financial years. (Figures in Rs. Crores):

Fiscal YearBerger PaintsIndigo Paints
20196,062535.62
20206,366624.79
20216,818723.32
20228,762905.97
202310,5681,073.33
4-year CAGR14.91%18.98%

Net Profit Growth

The net profits of both companies follow a similar trend as the operating revenues.

From FY19 to FY23, Berger Paints and Indigo Paints have grown at a CAGR of 14.87% and 48.86%, respectively. During FY23, Berger Paints reported a net profit of ₹860 crores and Indigo Paints reported a net profit margin of ₹131.93 crores

The figures below highlight the net profit growth of Berger Paints Vs Indigo Paints for the last five fiscal years. (Figures in Rs. Crores).

Fiscal YearBerger PaintsIndigo Paints
201949426.87
202065647.81
202172070.85
202283384.04
2023860131.93
CAGR growth14.87%48.86%

Profit Margins

When we compare the operating profits of the company, we can see that the operating profit margins of Indigo Paints are better than the operating profit margins of Berger Paints.

Berger Paints’ margins took a toll due to the high raw material cost in the first half of FY23. On the other hand, the increase in the margins of Indigo Paints was a result of its differentiated product mix, proactive cost-optimization measures, and moderating raw material costs.

During FY23, Berger Paints and Indigo Paints reported an operating profit margin of 11.45% and 16.91%, respectively.

The figures below compare the operating profit margins of Berger Paints Vs Indigo Paints over the last five fiscals.

Fiscal YearBerger PaintsIndigo Paints
201916.41%10.10%
202017.61%14.56 %
202118.10%16.94 %
202212.65%15.01 %
202311.45%16.91%

The net profit margins of both companies have followed a similar trend as the operating profit margins. Comparatively, Indigo Paints has a greater net profit margin of 12.18% than the 8.14% margins of Berger Paints.

The figures below compare the Net profit margins of Berger Paints Vs Indigo Paints over the last five fiscals.

Fiscal YearBerger PaintsIndigo Paints
20198.15%5.00%
202010.31%7.65%
202110.56%9.80%
20229.51%9.17%
20238.14%12.18%

Return Ratios

Coming to the return ratios, we can see that Berger Paints has given better returns on the capital invested by the shareholders than Indigo Paints. During FY23, Berger Paints reported an ROE of 20.40% and Indigo Paints reported an ROE of 17%.

The figures below highlight the RoE of Berger Paints Vs Indigo Paints for the last five fiscal years.

Fiscal YearBerger PaintsIndigo Paints
201921.40%18.22%
202025.71%24.26 %
202123.84%12.57 %
202222.81%12.93 %
202320.40%17.00%

The ROCE of both companies has followed a similar trend as the RoE. During FY23, Berger Paints reported an ROCE of 25.60% and Indigo Paints reported an ROCE of 20.90%.

The figures below highlight the ROCE of Berger Paints Vs Indigo Paints for the last five fiscal years.

Fiscal YearBerger PaintsIndigo Paints
201929.12%17.26%
202030.20%34.33 %
202129.44%18.84 %
202228.10%18.42 %
202325.60%20.90%

Leverage Ratio

The debt-to-equity ratio of both companies during the last 5 years indicates a positive signal.

Over the years, Berger Paints has maintained low debt-to-equity indicating that the company primarily uses its funds to run its business.

Coming to Indigo Paints, the debt-to-equity ratio of the company has been Nil over the past 3 financial years. This indicates that the company is debt-free.

The figures below highlight the debt-to-equity of Berger Paints Vs Indigo Paints for the last five fiscal years.

Fiscal YearBerger PaintsIndigo Paints
20190.20.41
20200.20.25
20210.11Nil
20220.26Nil
20230.26Nil

Berger Paints Vs Indigo Paints – Future Plans

So far, we studied the financial statements of the company and understood how each company is performing. Let us now look at the futures of both companies to see what the company has on hold;

Berger Paints

  1. The company plans to strengthen its retail touchpoints by adding 8000 retailers by FY23
  2. The company has introduced several innovative products during FY23 and has more products in the pipeline.
  3. The company has successfully set up its biggest manufacturing facility in Sandila, with an investment of ₹1037 Crores.
  4. The company has equipped its manufacturing units with rooftop solar power projects. The recently commissioned Sandila plant is capable of running entirely on solar power through a 2 MW capacity rooftop solar power plant.
  5. The company has entered into the construction chemical business and has achieved a revenue of ₹1000 crores along with its subsidiary, STP Ltd.

Indigo Paints

  1. The Company has acquired a 51% stake in Apple Chemie, which has given it the required expertise in the waterproofing & construction chemicals product range. 
  2. The company is emphasizing its advertising spending as a part of its long-term brand-building strategy
  3. The company is accelerating the pace of expansion of its manufacturing capacity. It is commencing work on setting up a water-based paint plant at Jodhpur with a 90,000 KL annual capacity.
  4. The company is widening its portfolio of value-added offerings to customers across Tier-1 cities, and Tier-2 cities, as well as smaller towns.

Berger Paints Vs Indigo Paints – Key Metrics

We’re nearly done with our Berger Paints Vs Indigo Paints comparison. Let’s have a look at some critical metrics for the stock that weren’t included previously.

ParticularsBerger PaintsIndigo Paints
CMP₹ 587₹ 1,516
Market Cap (Cr.)₹ 68,450 Cr₹ 7,218 Cr
EPS₹ 8.86₹ 27.8
Stock P/E66.354.5
RoE20.40%17.00%
RoCE25.60%20.90%
Price to Book Value14.18.8
Promoter Holding75.0 %54.0 %

In Conclusion

From our comparative study of Berger Paints vs Indigo Paint. While Berger Paint has delivered constant returns to its shareholders, Indigo Paint has been growing at a faster rate than the former.

With the plans the companies have set in place, the outlook of both companies looks favorable for the future.

Which of the two stocks do you think is superior? What can investors anticipate from both firms in the future? Share your thoughts in the comments section below.

Written by Aaron Vas

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