Berger Paints India Limited has disclosed the imposition of fines and penalties by tax authorities for violations during FY 2021-22, as per regulatory requirements under SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015.

Penalty Details and Financial Impact

The Deputy Commissioner DGSTO-6, Bengaluru, Karnataka issued an order dated December 31, 2025, following a show cause notice for FY 2021-22. The financial implications of this order are detailed below:

Nature of Violations

The demand arose from an audit conducted for the period FY 2021-22, specifically related to:

• Outward liability issues
• Input tax credit contraventions

These violations were identified during the regulatory audit process, leading to the imposition of the penalty and additional financial charges.

Company's Assessment

Berger Paints India Limited has assessed that despite the penalty, there will be no material impact on the company's financials, operations, or other business activities. The company made this disclosure on December 31, 2025, in compliance with regulatory requirements.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, specifically under sub-para 20 of paragraph A of part A of Schedule III of the LODR Regulations. This follows SEBI Circular No. SEBI/HO/CFD/CFD-PoD-2/CIR/P/2024/185 dated December 31, 2024, which mandates such disclosures for listed entities.

Berger Paints India , one of the country's leading paint manufacturers, has reported a mixed set of financial results for the second quarter of fiscal year 2025-26. The company delivered high single-digit volume growth but experienced muted value growth, reflecting the challenges faced by the paint industry during an extended monsoon season.

Volume and Value Growth

For Q2FY26, Berger Paints India reported a volume growth of 8.8% despite extended monsoon and flooding across key markets including Andhra Pradesh, Kerala, West Bengal, North-East, Gujarat, and Maharashtra. However, value growth remained muted at 1.6% due to mix dynamics with higher contribution from tile adhesives, admix and putty, and lower sales of high-value products like exterior emulsions.

Financial Performance

The company's total income from operations reached ₹2,872.40 crores compared to ₹2,830.70 crores in the previous year, representing a modest increase of 1.5%. The gross margin remained stable at 39.6%, while PBDIT margin moderated due to subdued value growth resulting in lower operating leverage and higher brand building spends.

Segment Performance

The decorative business saw a marginal shift from premium/luxury to economy emulsions. However, the Construction Chemicals segment registered robust growth. The company continues expanding its retail network with over 1,600 outlets and has installed over 5,500 tinting machines toward its FY26 target of 10,000.

Factors Affecting Performance

Several factors contributed to the company's performance in Q2FY26:

• Extended monsoon season leading to subdued demand across most markets
• Mix dynamics favoring lower-value products
• Increased investments in brand-building efforts
• Shift in consumer preferences within the decorative segment

Future Outlook

Management expects demand revival post-Diwali supported by improving weather conditions and release of pent-up demand. The company remains optimistic about future prospects, citing gradual improvement in domestic demand indicators across segments.

Strategic Focus

Berger Paints India plans to continue its efforts on:

• Network expansion
• Innovation
• Brand building

These initiatives aim to build value for investors and stakeholders in the coming quarters.

The company's performance reflects the broader challenges faced by the Indian paint industry, with factors like extended monsoons and shifting consumer preferences impacting short-term results. However, Berger Paints India's focus on key growth segments, retail network expansion, and strategic initiatives may position it well for potential market improvements in the future.