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paint companies increase hiring to combat market challenges and competition

Indian paint companies are increasing their sales team hires to capture market share amid weak growth and fierce competition. Firms like Asian Paints and Berger Paints are investing 5-15% more in staffing to target smaller retail markets, responding to a slowdown that began in Q4FY24, exacerbated by rising crude prices and declining demand in the decorative segment, particularly in rural areas. Despite these efforts, companies continue to face challenges with moderate revenue and profit growth due to rising input costs and sluggish volumes.

quarterly earnings reports reveal mixed results across various sectors

The Q2 earnings season for FY25 is underway, with major companies like Apollo Hospitals, Kansai Nerolac Paints, and Trident set to release their results. While many firms have reported, the overall corporate earnings scorecard has been weak, with only 62% meeting or exceeding profit expectations, particularly in the consumption sector. Notably, GAIL's earnings missed expectations due to lower gas trading margins, while Power Grid's profit remained flat year-on-year.

Berger Paints faces challenges as competitive pressures rise and growth slows

ICICI Securities has downgraded Berger Paints to a REDUCE rating with a target price of Rs 470, citing a 2% decline in the paint industry and increased competitive pressures. Despite a 3.6% YoY volume growth and a slight EBITDA margin contraction, the company is investing in urban markets and expanding its retail presence. However, the entry of Grasim is expected to impact industry profitability and valuation multiples.

Berger Paints reports profit decline but shares rise on growth outlook

Berger Paints reported a 7.6% decline in Q2 net profit, totaling Rs 269.6 crore, attributed to challenges like extended monsoons and adverse weather. Despite this, shares rose as the company anticipates improved topline growth in H2 and achieved its highest gross margins in a decade at 41.7%. The premium segments, including waterproofing and wood coatings, showed robust growth.

companies report mixed q2 results with notable profit declines and growth

Several companies, including Titan Company, GAIL, Mankind Pharma, and Dr Reddy's, are set to release their Q2 earnings today, following reports from major firms like TCS, Infosys, and HCL Technologies. GAIL reported a profit increase of 10.1% to Rs 2,689.67 crore, while Saregama India saw a profit drop of 6.7% to Rs 44.90 crore despite a revenue rise of 40.3%. Gland Pharma's profit fell by 15.7% to Rs 163.53 crore, with revenue up 2.4% to Rs 1,405.83 crore.
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