UNIVERSITY OF MANAGEMENT AND TECHNOLOGY

FINANCIAL MANAGEMENT
SEC-C
FINAL REPORT
FINANCIAL ANALYSIS OF BERGER PAINTS PAKISTAN (LTD)
SUBMITTED BY

NIMRA TAHIR F2019005133

NAMRA AFZAL F2019005134

AZEEM ALEEM F2019005084

DANISH AFZAAL F2019005079

MOHAMMAD AHMED F2019005099

IZZA ZAMAN CHEEMA F2019005119

HASEEB ASHGHAR F2019005160

SUBMITTED TO
DR ZAHEER ANWAR
 FINANCIAL ANALYSIS OF BERGER PAINTS PAKISTAN (LTD)

Introduction
• The BERGER name has been associated with paint manufacturing for almost two centuries. The BERGER
group has worldwide affiliations, with companies operating in 46 counties. In Pakistan, the history of BERGER
is as old as the history of organized paint manufacturing. The first company to introduce premium quality
paints in the country. The BERGER started its operations in 1950. Initially the paints were imported from the
United Kingdom. It was in 1955 that a local manufacturing facility was established at Karachi. Ever since, the
Company has met the growing demand through regular extensions in its products range, which has
continued to attract a healthy market share and has maintained a high reputation for consistent quality.
BERGER PAINTS PAKISTAN became a public limited company in 1974, when 49.38% of the shares were
acquired by Pakistani investors with the remaining 50.2% being held by the U.K. parent company, Jenson &
Nicholson Limited. Soon afterwards, Jenson & Nicholson Limited was taken over by Hoechst, one of the
world's major manufacturers of chemicals and allied products. Slotrapid Limited, a. U.K. based company with
diversified business interests, acquired the management of BERGER PAINTS PAKISTAN in 1991.

KEY PROFILE

Dr. Mahmood Ahmad CEO

Mr. Maqbool H. H. Rahimtoola Chairman

Mr. Nauman Afzal Company Secretary

 1) Prepare a chart of Market Prices for last 12 months

2) BONDS
This company doesn’t issue bonds.
3) VALUATIONS
A) Dividend Growth Rate

2021 4 3% 0.03
2020 1 0% 0.00
2019 1 0% -0.002
2018 1.25 0.25% -0.0075
2017 4.5 3.5% 0.00
2016 4.5

g 0.0041

R=0.1075 D1=4.0041

P= D1/r-g
P= 4.0041/0.1075-0.0041
P= 37.24334
Prevailing market price is 79.22 so it is overvalued.
B) Free Cash Flow Valuation Model
FCF= CASH FLOW OPERATIONS – CAPITAL EXPENDITURE

2017 2018 2019 2020 2021

cash from operations 60597000 24837000 29265000 14225000 427980000
capital expenditure 112803000 93568000 -37148000 471087000 7647000

Growth rate
FCF (2021) 420,333,000.00 420332999
FCF(2020) -456862000.00 -456862001
FCF(2019) 66413000.00 66412999
FCF(2018) -68731000.00 -68731001
FCF(2017) -52206000.00 -52206001
FCF(2016) -3160587000

g -18210601
r 0.1075
FCF(2022) 402122399.000

p 3758884080.07

liabilities 2,786,242,000.00
value of common
stock 972,642,080.07
no of share 204,597,000.00
value of share 4.75394106
C) Book Value of Share
Total equity 225373000
value per share = total equity/ no of shares
value per share 1.101545966

D) Price Earning Multiple Approach

Year EPS Growth rate
2021 9.54 8.54
2020 3.63 2.63
2019 4.93 3.93
2018 5.61 4.61
2017 11.11 10.11
2016 10.16
g 5.964
r 0.1075
EPS
2022 15.504
P/E 8.91
P 138.2592558

4) Should we buy this stock?

Yes, ofcource we should by the company stock because Overvalued stocks are
ideal for investors looking to short a position. This entails selling shares to
capitalize on an anticipated price decline. Investors may also legitimately trade
overvalued stocks at a premium due to the brand, superior management, or other
factors that increase the value of one company's earnings over another.
FINANCIALS 2016-2021