Berger, the market leader in the paint industry of Bangladesh, posted their Q1 financial report for FY 2026-27 (April’26–June’26). The company posted a net profit of BDT 1,807.7 million, up 111.0% from the same quarter last year. This is by far the strongest profit growth posted by the company in the last 5 years. The jump was driven by a much wider gross margin, growth from associate business, and a sharply lower tax charge, which together pushed profit growth well ahead of the 14.9% rise in revenue.
Berger | Double-Digit Revenue Growth
Q1 revenue rose 14.9% to BDT 8,141.9 million. This is by far the largest increase in the five-year period. The company’s attribute the growth to strategic price adjustments made in response to rising raw materials and packaging costs. Since Q1 FY 2022-23, revenue has grown at a compound annual rate of 4.4%, so this quarter’s growth is well above trend.
Gross Margin Jumps to a Five-Year High
Gross profit rose 38.4% to BDT 3,100.0 million, nearly 82% of the entire increase in revenue. This is a sharp turnaround after a 5.8% decline last year. Cost of sales grew only 4.0% to BDT 5,041.9 million, far slower than the 14.9% growth in revenue, so most of the price increase flowed straight to gross profit.
The gross margin expanded by 646 basis points to 38.1% from 31.6%, the highest in the five years compared and well above the 30.8%-34.0% range of the four preceding years.
Lower Tax and Stronger Associate Income Drive Profit Higher
Operating profit rose 64.0% to BDT 1,866.4 million, and the operating margin widened to 22.9% from 16.1%. Selling, distribution and warehousing expenses grew 11.6% to BDT 994.3 million (12.2% of revenue, down from 12.6%), and administrative and general expenses grew 21.0% to BDT 281.4 million (3.5% of revenue, up from 3.3%). Combined operating expenses grew slower than revenue, so both cost lines eased as a share of sales apart from the administrative line. A foreign exchange loss of BDT 2.6 million was much smaller than the BDT 18.0 million loss a year earlier, and other operating income rose 17.8% to BDT 83.5 million.
Below operating profit, finance costs fell 78.0% to BDT 12.2 million from BDT 55.2 million; the company’s attribute this to a reduced interest rate on UPAS loans. Investment income was flat at BDT 128.1 million. Share of profit of associates nearly quadrupled, up 272.5% to BDT 57.8 million from BDT 15.5 million, adding BDT 42.3 million. Profit before WPPF rose 66.7% to BDT 2,044.0 million; of the BDT 817.6 million increase, BDT 728.5 million came from operations, BDT 43.0 million from lower finance costs, and BDT 42.3 million from the stronger associate result.
WPPF was BDT 98.9 million, leaving profit before tax at BDT 1,945.1 million, up 67.0%. Tax expense fell 55.3% to BDT 137.4 million from BDT 307.6 million, even as pre-tax profit rose sharply. As a result, the effective tax rate dropped to 7.1% from 26.4%, the lowest in the five years by a wide margin. Had the prior year’s effective tax rate applied, tax expense would have been roughly BDT 376 million higher.
Net profit reached BDT 1,807.7 million, up BDT 950.8 million and more than double last year’s BDT 856.9 million. The net margin widened to 22.2% from 12.1%, also a five-year high.
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