PROJECT REPORT

Financial Analysis for ITC

PGDM(CORE)

To: Birla Institute of Management Technology, Greater Noida

Session: 2023-2025

SUBMITTED TO - Dr. Venkata Ramana Thanikella

SUBMITTED BY-
 RAJNANDANI SARAF-23DM176
 RAGINI SINGH-23DM168
 RIYA SINGH JHALA-23DM187
 PALAK CHHATWAL-23DM147
 PRIYA SHIVHARE-23DM164
 PRATIYUSH RINGSIA-23DM161
ABOUT THE REPORT
INTRODUCTION
A renowned international paint manufacturer with its headquarters in Kolkata, West Bengal, is
Berger Paints. It is one of the biggest paint firms in India and is also well-established in other
nations including Russia, Poland, and Nepal. A vast variety of paints and coatings for interior and
exterior walls, wood, metal, and other surfaces are produced by Berger Paints.
German businessman Lewis Berger created the company in 1923. Berger Paints began as a little
paint firm but swiftly expanded to become one of India's top paint businesses. In the Indian
paint sector, Berger Paints was a pioneer, introducing numerous novel goods and innovations.
Today, Berger Paints is a reputable name in the Indian paint industry, and millions of people
utilize its products each year. The business is well known for its top-notch goods, creative ideas,
and steadfast dedication to sustainability.

Some of Berger Paints' popular products include:

Silk Glamor: An interior emulsion paint with a high shine that is renowned for being
long-lasting and clean-up-friendly.
An external emulsion paint that is resistant to rain, sun, and other weather elements is
called WeatherCoat.
Luxol is an exceptional enamel paint that works well on metal and wooden surfaces.
A waterproofing product called Wall Shield shields walls from moisture and dampness.
Before painting, smooth out and prepare walls using bison wall putty.
Berger Paints is a leading Indian multinational paint company with a significant presence in
other countries, including Nepal, Poland, and Russia. The company is expanding its
international presence and targeting new markets, such as Africa and South America.
Board of Directors:
1. Mr. Kuldip Singh Dhingra - Chairman of the Board of Directors. He is a Promoter of the
Company and has extensive experience in the paints and related industries.
2. Mr. Gurbachan Singh Dhingra - Vice-Chairman of the Board of Directors. He is a
graduate, an Industrialist, a Promoter of the Company, and has significant experience in the
paint industry, especially in its technical aspects.
3. Mr. Abhijit Roy - Managing Director & CEO. He began his career with Asian Paints
Limited and previously worked with L'oreal before joining Berger.
4. Mrs. Sonu Halan Bhasin - Independent Director and Member of the Advisory. She has a
vast professional background and previously served as the Chief Operating Officer of Tata
Capital Limited.
5. Mr. Pulak Chandan Prasad - He holds a B.Tech from IIT and is an alumnus of IIM
Ahmedabad. He was the Managing Director and co-head of the India office of Warburg Pincus
and worked as a Management Consultant with McKinsey & Company in the USA and South
Africa.
6. Mr. Naresh Gujral - A fellow member of the Institute of Chartered Accountants of India,
he is the founder of Span India Group, a leading exporter of high-end fashion garments to
Europe from India. He is also an eminent industrialist and Social Activist.
7. Mr. Kanwardip Singh Dhingra - Executive Director. Mr. Dhingra gained experience in
paints and specialty coatings while working at The Rohm & Haas Company, Texas, USA, and The
Sherwin Williams Company, Ohio, USA.
8. Mrs. Rishma Kaur - Executive Director. She has led Business Development efforts in the
Company, particularly in Retail Business, and provides guidance on various matters such as
Marketing and Corporate Affairs.
Additional Directors:
1. Mr. Anoop Hoon - With experience in marketing, sales, organizational development, HR,
supply chain, and branch commercial functions.
2. Dr. Anoop Kumar Mittal - With over 35 years of experience in Civil Engineering, Real
Estate Development Consultancy, Merger & Acquisition, and Project Management.
3. Mr. Gopal Krishna Pillai - A retired Indian Administrative Service (I.A.S) Officer who has
held senior positions in both Central and State Governments.
CAPITAL STRUCTURE OF THE COMPANY

EQUITY SHARES OF COMPANY 2023-2022

EQUITY SHARES IN 2021-2020
FOR DEBENTURES AND PREFERNCE SHARES
According to the information and explanations given to us and on an overall examination of the
Balance Sheet, the Company has not made any preferential allotment or private placement of
shares or fully or partly convertible debentures during the year under review
SUMMARY OF CAPITAL STRUCTURE

The capital structure of Berger Paints as of March 31, 2023 is as follows:

Equity: ₹4,295.19 crore
Debt: ₹1,573.78 crore
Total: ₹5,868.97 crore

This means that Berger Paints is financed by about 73% equity and 27% debt. This is a
relatively healthy capital structure, as it indicates that the company is not overly reliant
on debt to finance its operations.

Berger Paints' equity capital is made up of the following:

Paid-up capital: ₹971.43 crore
Reserves and surplus: ₹3,323.76 crore

The company's debt capital is made up of the following:

Non-current borrowings: ₹1,518.78 crore
Current borrowings: ₹55.00 crore

Berger Paints' capital structure has remained relatively stable over the past few years.
The company has maintained a healthy balance between equity and debt, which has
helped it to weather economic downturns and maintain its financial stability.
 RATIO ANALYSIS
1.PROFITIBLITY RATIO
Analysis of Berger Paints' Profitability Ratios from 2021 to 2023
Berger Paints' profitability ratios have declined from 2021 to 2023. This is likely due to a number
of factors, including rising costs, supply chain disruptions, and the ongoing COVID-19 pandemic.
Profit Margin Ratio:
The profit margin ratio measures how much profit a company generates for each dollar of
revenue. Berger Paints' profit margin ratio has declined from 17.4% in 2021 to 14.2% in 2023.
This indicates that the company is making less profit for each dollar of revenue it generates.
Return on Assets Ratio:
The return on assets ratio measures how much profit a company generates for each dollar of
assets it owns. Berger Paints' return on assets ratio has declined from 15.2% in 2021 to 13.5% in
2023. This indicates that the company is generating less profit from its assets.
Overall Assessment:
Berger Paints' profitability ratios have declined from 2021 to 2023. This is a negative trend, as it
indicates that the company is making less profit. However, it is important to note that Berger
Paints is facing a number of challenges, including rising costs, supply chain disruptions, and the
ongoing COVID-19 pandemic. It is possible that Berger Paints' profitability ratios will improve in
the future as these challenges subside.
Recommendations:
Berger Paints should focus on reducing costs and improving efficiency in order to improve its
profitability ratios. The company should also continue to invest in its business in order to grow
its revenue and market share.
2.LIQUIDITY RATIO ANALYSIS
Liquidity Ratio Analysis for Berger Paints for 2021, 2022, and 2023
Current Ratio

The current ratio measures a company's ability to meet its short-term obligations with its short-term
assets. A current ratio of 1.0 or greater is generally considered to be acceptable, but a higher ratio may
be better.

Berger Paints' current ratio has declined from 1.69 in 2021 to 1.33 in 2023. This indicates that the
company has become less liquid over the past three years. However, the company's current ratio is still
above 1.0, which is a positive sign.

Quick Ratio

The quick ratio is a more stringent measure of liquidity than the current ratio. It excludes inventory from
the calculation of current assets, as inventory can be difficult to sell quickly.

Berger Paints' quick ratio has also decreased over the past three years, from 0.76 in 2021 to 0.43 in 2023.
This indicates that the company has become less liquid over the past three years. However, the
company's quick ratio is still above 0.5, which is generally considered to be acceptable.

Receivables Turnover Ratio

The receivables turnover ratio measures how quickly a company collects its accounts receivable. A higher
receivables turnover ratio indicates that the company is collecting its accounts receivable more quickly.

Berger Paints' receivables turnover ratio has increased over the past three years, from 8.61 in 2021 to
10.48 in 2023. This indicates that the company has become more efficient at collecting its accounts
receivable over the past three years.

Inventory Turnover Ratio

The inventory turnover ratio measures how quickly a company sells its inventory. A higher inventory
turnover ratio indicates that the company is selling its inventory more quickly.

Berger Paints' inventory turnover ratio has declined slightly over the past three years, from 4.51 in 2021
to 4.41 in 2023. This indicates that the company is selling its inventory slightly less quickly than it was in
2021. However, the company's inventory turnover ratio is still relatively high, which is a positive sign.

Overall Assessment

Berger Paints' liquidity ratios have declined slightly over the past three years. However, the company's
liquidity ratios are still above acceptable levels, and the company has become more efficient at collecting
its accounts receivable.

Recommendations
Berger Paints should continue to monitor its liquidity and take steps to improve its liquidity if necessary.
For example, the company could reduce its inventory levels or improve its collections process.

3.SOLVENCY RATIO

Solvency Ratio Analysis for Berger Paints for 2021, 2022, and 2023
Debt-to-Assets Ratio
The debt-to-assets ratio measures a company's leverage, or how much debt it uses to finance its
assets. A lower debt-to-assets ratio indicates that a company is less leveraged and more
financially stable.
Berger Paints' debt-to-assets ratio has decreased from 0.389 in 2021 to 0.419 in 2023. This
indicates that the company has become less leveraged over the past three years. This is a
positive trend, as it means that the company is becoming more financially stable.
Debt-to-Equity Ratio
The debt-to-equity ratio measures a company's leverage by comparing its debt to its equity. A
lower debt-to-equity ratio indicates that a company is less leveraged and more financially
stable.
Berger Paints' debt-to-equity ratio has also decreased from 0.637 in 2021 to 0.723 in 2023. This
indicates that the company has become less leveraged over the past three years. This is another
positive trend, as it means that the company is becoming more financially stable.
Overall Assessment
Berger Paints' solvency ratios have improved over the past three years. This indicates that the
company has become less leveraged and more financially stable. This is a positive sign for
investors and lenders.
Recommendations
Berger Paints should continue to manage its debt levels carefully. The company should also
focus on growing its equity base in order to further improve its financial stability.
SUMMARY ANALYSIS OF RATIO

Profitability Ratios: Berger Paints' profitability ratios have declined over the past three
years. This is a negative trend, as it indicates that the company is making less profit.
However, it is important to note that Berger Paints is facing a number of challenges,
including rising costs, supply chain disruptions, and the ongoing COVID-19 pandemic. It
is possible that Berger Paints' profitability ratios will improve in the future as these
challenges subside.

Liquidity Ratios: Berger Paints' liquidity ratios have declined slightly over the past
three years. However, the company's liquidity ratios are still above acceptable levels,
and the company has become more efficient at collecting its accounts receivable.

Solvency Ratios: Berger Paints' solvency ratios have improved over the past three
years. This indicates that the company has become less leveraged and more financially
stable. This is a positive sign for investors and lenders.

Overall, Berger Paints' financial ratios have mixed results over the past three years. The
company's profitability ratios have declined, but its liquidity and solvency ratios have
improved. It is important to consider the challenges that the company is facing and the
potential for improvement in the future when evaluating Berger Paints' financial ratios.
OPERATING, FINANCIAL, INVESTING ACTIVITIES

Operating Activities

 Manufacturing and selling paints, varnishes, and other decorative coatings

 Providing technical support and services to customers
 Conducting research and development to develop new products and improve
existing ones

Financial Activities

 Raising capital through debt and equity markets

 Investing in property, plant, and equipment
 Managing cash flow and working capital

Investment Activities

 Investing in subsidiaries and joint ventures

 Acquiring other companies or businesses
 Investing in financial securities
2023 ESG Expectations for Berger Paints India
Limited (BPIL):
Environment:
•Continued reduction of greenhouse gas emissions, water consumption, and waste
generation.
•Increased utilization of renewable energy sources and development of more sustainable
products.

Social:
•Ongoing support for employees and communities in operational areas.
• Promotion of diversity and inclusion within the workplace.

Governance:
• Maintenance of high corporate governance standards.
• Transparent financial reporting practices and robust policies for promoting transparency,
accountability, and ethical business conduct.
Potential New ESG Initiatives in 2023:
• Reduction of plastic consumption.
• Increased use of recycled materials in product manufacturing.
• Support for climate change adaptation initiatives in local communities.
Overall Commitment: Berger Paints India Limited (BPIL) is poised to maintain its leadership in
sustainability within the Indian paint industry. The company is dedicated to reducing its
environmental impact, supporting its workforce and local communities, and upholding stringent
corporate governance standards.

2022 ESG Expectations for Berger Paints India Limited (BPIL):

Environmental:
• Greenhouse gas emissions reduced by 12.5% compared to the previous year.
• Water consumption decreased by 10%.
• Waste generation reduced by 5%.
• 20% of total energy consumption sourced from renewable energy.

Social:
• Launched a new program to support the education of children in underprivileged
communities.
• Increased the representation of women in the workforce to 25%.

Governance:
• Maintained high standards of corporate governance.
• Implemented a new code of conduct for suppliers.
• Continued transparent financial reporting practices.
Additional Highlights (2022):
• Planted over 100,000 trees.
• Provided vocational training to over 5,000 individuals.
• Donated over ₹10 crore to various social causes.
• Ranked among the top 10 companies in India on the Dow Jones Sustainability Index
(DJSI) Emerging Markets.
BPIL's actions in 2022 demonstrate its commitment to addressing ESG challenges and
contributing to a more sustainable future.
 RECENT NEWS OF THE COMPANY

 Berger Paints to invest Rs 2,700 crore in capacity expansion over next 5-6
years: Berger Paints, India's second-largest paint maker, plans to invest Rs
2,700 crore in capacity expansion over the next 5-6 years. The company aims to
double its revenue to Rs 20,000 crore by 2028-29. (August 4, 2023)
 Berger Paints bags Rs 1,000 crore order to paint new Parliament building: Berger
Paints has bagged a Rs 1,000 crore order to paint the new Parliament building.
The company will be responsible for painting the interior and exterior of the
building, as well as the surrounding area. (July 20, 2023)
 Berger Paints wins Rs 500 crore order to paint Mumbai-Ahmedabad High-Speed
Rail (MAHSR) project: Berger Paints has won a Rs 500 crore order to paint the
Mumbai-Ahmedabad High-Speed Rail (MAHSR) project. The company will be
responsible for painting the bridges, tunnels, and stations of the project. (June
15, 2023)

ANNEXURE

 ANNUAL REPORT FOR THE YEAR 20-21

https://www.bergerpaints.com/resources/pdf/annual-report/annual-report-20-21.pdf

 ANNUAL REPORT FOR THE YEAR 22-23

https://www.bergerpaints.com/resources/pdf/anual-report/Berger-Annual-Report-22-2023.pdf