PACRA Maintains Entity Ratings of Berger Paints Pakistan Limited

Berger Paints Pakistan Limited (“Berger” or “the Company”)’s ratings reflect its well-established market position, strong brand equity, diversified product portfolio, and sustained presence in Pakistan’s paints and coatings industry. The Company benefits from an established operating platform, supported by modern manufacturing facilities and extensive distribution capabilities, enabling it to cater to a broad customer base across retail and institutional markets. Berger’s business profile is underpinned by three key segments: Retail Business (B2C), comprising decorative paints distributed through a nationwide network; Non-Retail Business (B2B), encompassing powder coatings, protective coatings, and automotive paints; and Allied Business, comprising road safety products, construction chemicals, and adhesives. The Company also undertakes toll manufacturing for Buxly Paints Limited, supporting capacity utilization and strengthening its operating base. This diversified business mix provides exposure to multiple end-markets and enhances resilience against fluctuations in individual segments. The global paints and coatings industry was valued at ~USD 193.9bn in CY25 and is projected to reach ~USD 293.5bn by 2035, reflecting a CAGR of ~4.2%. Pakistan’s paints industry remains highly fragmented, with the organized segment accounting for ~40% of the market. Prominent players includes Berger, AkzoNobel, Nippon, and Kansai are supported by strong brands, extensive distribution networks, and diversified product portfolios. The sizeable unorganized segment remains a key source of competitive and pricing pressure. Demand is primarily driven by construction, renovation, infrastructure, and manufacturing, while subdued construction activity and weak purchasing power have constrained volumes. Industry production declined ~6.7% in FY25; however, sector profitability remained broadly stable during 9MFY26, supported by lower input and finance costs. Going forward, sector growth is expected to remain moderate, with subdued construction activity and input-cost pressures likely to constrain volumes and margins, while lower financing costs and a recovery in construction and infrastructure activity could provide support. Against this backdrop, Berger maintains a strong competitive position, supported by product quality, brand recognition, and an established customer base. The Company recorded topline revenue of ~PKR 6,872mln in 9MFY26 (FY25: ~PKR 8,945mln; 9MFY25: ~PKR 6,760mln), reflecting a ~1.7% YoY increase. Margins improved marginally across levels, supported by effective pricing and prudent cost management. The Company’s diversified portfolio and established market presence continue to provide resilience amid challenging market conditions. The Company operates under a well-structured Board providing oversight and strategic direction, while day-to-day operations are managed by an experienced team of professionals. A robust internal control framework supports operational efficiency, risk management, and accountability. The financial profile is considered adequate, with comfortable coverage and stable cash flows, although working capital remains somewhat stretched. The capital structure remains leveraged, funded through a mix of short- and long-term borrowings.
The ratings are dependent upon the management’s ability to sustain the market operation amidst stiff competition. Generating operating cashflows along with maintaining an efficient supply chain and prudent working capital management is important.

About the Entity
Berger Paints Pakistan Limited was incorporated in 1950 and listed on the Pakistan Stock Exchange in 1974. In 1991, Slotrapid Limited (BVI) acquired a 52.02% stake from the former parent, Jenson & Nicholson Limited, assuming control. The Company is governed by an eight-member Board comprising four independent, three non-executive, and one executive director. The CEO, Dr. Mahmood Ahmad, a Slotrapid nominee with ~29 years of industry experience, is supported by an experienced management team.