Berger Paints India has decided to go in for third round of price increase in the current financial year to counter raw material cost push.
The company had already increased prices by two per cent in May and 1.2 per cent in August.
According to K.S. Dhingra, Chairman, prices will be hiked by another 2.5 per cent in September.
This was to protect its margins erosion from rising dollar denominated input costs owing to rupee depreciation, Dhingra told reporters after its AGM here on Friday.
“Till September, we will have raised our prices by about 5.7 per cent, which protects us from the adverse impact of rupee depreciation up to the level of Rs 60 a dollar,” Berger Chairman said.
Last year Berger raised prices once, in May, by about four per cent to combat the impact of rise in raw materials.
During the Q1FY14, the company reported a net profit of Rs 55 crore against Rs 48 crore in the corresponding quarter in the previous fiscal. The company said the retail business posted double-digit growth with industrial business facing sluggish demand.
Projects
Dhingra said that the first phase expansion project of the water based paint plant at Hindupur in Andhra Pradesh would be complete by the early October. After the first phase, the capacity of the plant will be 80,000 tonnes a year.
Parallel to this project, Berger has decided to take up a separate project at Hindupur for 30,000 tonnes of paints and 6,000 tonnes of resins a year for its British Paints division.
Berger Paints’ upcoming powder coating project at Jejuri in Pune with an initial capacity of 1,800 tonnes a year is expected to be commissioned during the second-half of the current financial year.
On Friday, the Rs 2-Berger stock closed three per cent up at Rs 204.6 on the BSE.