Bonanza is bullish on Berger Paints has recommended buy rating on the stock with a target price of Rs 305 in its research report dated March 05, 2018.
Bonanza's research report on Berger Paints
Recently, the stock price of Berger Paints India Ltd. (Berger Paints) corrected by ~18% from 52-week high of Rs.286 despite reporting good set of numbers in the recent quarters. Berger Paints is the 2nd largest company in decorative paint segment with market share of 19%, just after Asian paints. Over the last couple of years, it has gained market share by implementing various strategies. It has registered a phenomenal CAGR of 12% in its topline as well as CAGR of 21% in bottomline during FY11-17.
Outlook
With 2nd largest company in decorative paint segment, favorable Indian demographics and government’s initiatives, capacity expansion plans, focus shifted to premium products and foray into the home decor business, we value Berger Paints at 47.00x FY19E EPS of Rs.6.50 to arrive at target price of Rs.304.00, an upside of ~22%.
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