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Aditya Daga

Anwesha saha
Ananya bhattacharyya
Nishad Shaik
Mridul Agarwal

Asian Paints
Founded in 1942
Largest in India and third largest in Asia
Annual Turnover 127.15 billion INR
Products: Interior and exterior paints, metal and wood
finishes and waterproofing with a variety of effects to
choose from


Performance Measure 2013-14 Growth over last year
EBITDA (Rs. Cr) 10419 16%
PAT (Rs. Cr) 1169 11%
Cash flow from operations (Rs. Cr) 1813 22%
Asian Paints - segments
Operations
Economic Environment
The April-June 2014 period saw improvement in the global macroeconomic
environment.
The Eurozone also showed signs of improvement but slowly
In international markets, concerns around political uncertainty and currency
depreciation risk in Egypt, Jamaica and Bangladesh
The domestic economy exhibited mixed signals due to
The strong electoral mandate at the center resulted in uplift of sentiments in the economy
The rupee which was depreciating during this time last year, has now recovered and is
comparatively stable
Growth at decadal lows, from 8% levels in 2004 to below 5% in FY 2013-
2014
Inflation continues to prevail and remains at the higher end of the comfort
zone. This affects demand and consumption



Industry Dynamics
Paint industry grows at 1.5 to 2 times the GDP growth
rate
Market share 65% organized sector
35% Unorganized sector
2 major segments Decorative -75% of revenue
- Industrial 25% of revenue
Industry was largely dominated by wholesalers
distributing products of multinational companies.

Competitor Analysis
Market leader in the paint industry with a 55% market share
Major competitors Berger Paints, Nerolac Paints, Akzo Nobel India
Competition from the unorganized sector accounting for 35% of the
paint market

Competitor Analysis
Peer Comparison Asian Paints BergerPaints Kansai Nerolac Paints Akzo Nobel India
Revenue 12714.81
3,869.72 3,183.12 906.34
Operating Profit Margin 17.05% 11.51% 11.54% 7.93%
EBITD 1984.66 432.71 372.52 248.7
PAT Margin (%) 11.03% 6.90% 6.51% 6.06%
EPS 12.45 6.76 40.58 36.56
P/E 51.34 52.07 45.26 34.26
P/BV 17.03 11.11 6.95 6.89
ROCE 47.75% 25.22% 20.84% 24.16%
Consistent performance
Sustained value creation
Moat Asian Paints
There are 2 moats of the company
- Branding
- Distribution Network
Branding as Moat
Good customer recall Har ghar kuch kehta hai, Har rang kuch
kehta hai
Established brands like Royale, Ultima, Ace, Apex and Tractor
Smart choice campaign on tractor emulsion
Relaunch of apcolite with rahul dravid as brand ambassador
Ultra luxury royal Aspira launched across India
Annual expenditures on advertising: 4% of its sales
Launched Apcolite advanced to bridge gap between Apcolite
premium emulsion and Royale at economic price


Distribution as Moat

Distribution Network
Installed more than 3200 colour worlds; total 27000 colour world
dealers now
Launch of Ezycolour store in Kolkata
Launched 70 new Colour Ideas store during the year 2013-14
Bypassed the wholesalers and directly to retailers
20% revenue from international market such as Middle East,
Caribbean and South East Asia
High penetration in rural areas as compare to its competitors




Growth Drivers
Usage of correct painting system
Increased disposable income
Easy home and vehicle loans
Efficient distribution network with
increased presence in the rural sector


Risks and Concerns
Limited presence in the industrial paint segment
Driven by seasonal effects
Constantly changing customer tastes and
perceptions
Regulated by stringent environmental policies
Volatility in raw material costs

Corporate News and Events
Asian Paints completes acquisition of Ess Ess Bathroom Products on 11
June 2014.







Asian Paints to acquire 51% stake in kadisco Chemical Industry PLC,
Ethiopia
EPV
ABV & NAV

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