Sec­ond quar­ter should be good, says Berger Paints

Mint ST - - BUSINESS OF LIFE - BY SURABHI UPADHYAY, LATHA VENKATESH & ANUJ SINGHAL CNBC-TV18

It (mar­ket) im­proved in July, is get­ting bet­ter in Aug; Sept will be even bet­ter

Berger Paints posted slightly weak first-quar­ter num­bers with 9% rev­enue growth and mid-sin­gle digit vol­ume growth. In an in­ter­view, Ab­hi­jit Roy, man­ag­ing di­rec­tor and chief ex­ec­u­tive of Berger Paints, dis­cussed earn­ings, the im­pact of the goods and ser­vices tax (GST) and the out­look for the com­pany. Roy said GST would in fact be slightly mar­gin ac­cre­tive for the com­pany. He how­ever said that it was too early to say whether there would be a shift to the or­ga­nized sec­tor from the un­or­ga­nized mar­ket. On the busi­ness front, Roy said de­mand re­cov­ery was seen in the months of July and Au­gust and that he ex­pects to see dou­ble-digit vol­ume growth in FY18 if Septem­ber too fares well. Edited ex­cerpts:

Now that a lot of this goods and ser­vices tax (GST) busi­ness is be­hind us, tell us if the mar­ket is sta­bil­is­ing and in the run up to the fes­tive season, what are the vol­ume trends look­ing like?

It is im­prov­ing. July, it im­proved from what it was in June and Au­gust is bet­ter and Septem­ber should be even bet­ter. So sec­ond quar­ter should be good.

Sec­ond quar­ter bet­ter than sec­ond quar­ter last year or sim­i­lar to last year?

No, it will be bet­ter than last year pos­si­bly. How much of your GST pay­ment you will re­cover back through in­put tax? What will be the split in your case? I am try­ing to go from the mi­cro to the macro. On Tues­day, we got this big GST num­ber Rs92,000 crore but some of it will have to be paid back as in­put tax credit. We do not know how much that num­ber is. So in your case, what part of the GST are you ex­pect­ing back as in­put tax credit?

We have not worked out the ex­act num­bers, but I can only say that as far as GST is con­cerned, ear­lier what­ever we were pay­ing in terms of taxes on var­i­ous plat­forms which is ex­cise, VAT, etc. here it will be slightly bet­ter off in the sense that in­put tax credit, when we take it, it will be marginally, mar­gin ac­cre­tive mean­ing it will im­prove mar­gin a little bit. So you will get more credit than you got in the pre­vi­ous regime? Slightly, be­cause we have some of the fac­to­ries in West Ben­gal where we were not get­ting credit for send­ing ma­te­rial out­side the state. Now, we will get that ben­e­fit as well.

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