Berger Paints India reported a 5 per cent year-on-year increase in consolidated net profit attributable to owners to Rs. 2.17 bn for the quarter ended 30 September. The result was below the Bloomberg consensus estimate of Rs. 2.74 bn, while revenue from operations rose 13.2 per cent to Rs. 32 bn, also missing the Rs. 32.17 bn estimate. Raw material prices increased by 25 per cent during the quarter, outpacing price increases and putting pressure on profitability. Gross margin declined to 39.31 per cent from 41.57 per cent a year earlier, while earnings before interest, tax, depreciation and amortisation (Ebitda) increased 5.2 per cent to Rs. 3.71 bn from Rs. 3.52 bn. The company also spent an additional Rs. 220 mn on advertising and promotion for its new corporate campaign. The Kolkata-based paintmaker has introduced price increases across its decorative and industrial businesses and plans further action. It aims to recover most of the higher costs by the end of November, with the balance expected to be addressed by December. Margin recovery will depend partly on crude-linked input prices, which have softened from their June-quarter peak. The decorative business recorded 10 per cent value growth, supported by price increases of about 8 per cent, although volumes moderated. Extended rainfall in eastern markets and a shift in Diwali-related purchases to the December quarter affected demand, while a move towards better product categories weighed on sales of putty, textures and enamel. Waterproofing, wood coatings and other differentiated products performed better. The industrial business delivered high double-digit volume and value growth, helped by demand for automotive coatings, particularly in the two-wheeler segment. Berger Paints expects its operating margin to move closer to the guided 15 to 17 per cent range in the second half, supported by pricing, cost efficiencies and operating leverage. Its market share among six listed paintmakers declined marginally to about 20.2 per cent from 20.3 per cent. The company plans to expand its urban-market initiative from April and is considering new factories in West Bengal and Odisha. Rival Asian Paints reported a 7.5 per cent rise in profit to Rs. 10.68 bn and 16.9 per cent revenue growth to Rs. 99.77 bn.