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COMPANY PROFILE

Incorporated in the year 1942, Asian Paints Limited, headquartered in Mumbai, has now become one of India's foremost paints companies. Today, it is twofold the magnitude of any other paint concern in the country. The company manufactures a variety of paints for decorative and industrial usage. With vertical integration, Asian Paints expanded into chemical products, which are used during paint manufacturing.  The company's built-up processes are having a significant presence not only in the Indian subcontinent but also in the Middle East. It has operations in 15 countries with 26 manufacturing plants globally (including those in India). During World War II and the Quit India Movement of 1942, a provisional ban on paint imports left only foreign companies and Shalimar Paints in the country. Recently the company entered into a contract with Weatherseal Fenestration (an interior decoration company) for acquiring 51% stake.  It  has also entered into an agreement for acquiring 49% stake in Obgenix Software, commonly known as White Teak engaged in the business of decorative lighting products and fans.

PAINTS INDUSTRY IN INDIA

§  The Indian paint industry is over a century old with its beginning tracing back to the setting up of a factory by Shalimar Paints in Calcutta (now Kolkata) in 1902. The local Indian paint industry is estimated to be around '500 billion (approximately) with the ornamental paint group establishing almost 75% of the market share with Asian Paints  and Berger Paints  contributing maximum proceeds. The manufacturing paint category establishes the balance 25% of the remaining market. Competition in the paints industry is set to intensify with Grasim Industries making its foray in the sector.

§  Growth of the industrial paint segment is highly reliant on the automotive sector with 40-50% of the request coming from the said segment. Small unorganised manufacturers still support a sizable 30- 35% share of the trade. Since the sector is raw material intensive, somewhat crude based, the industry benefits from softening of crude value.

§  The market for the Indian paints industry is likely to expand at a CAGR of 8.6% (approximately) for the forecast period by 2024 and further at a CAGR of 4.8% (approximately) by 2026.

§  Two positives from Budget 2022 for the sector of Capex plan and allocation of ’48,000 crores (approx) to the Prime Minister's Awas Yojana will help to support the demand.

§  Many paint companies have been entering into the waterproofing and construction chemicals space in the past few years, which are fairly underutilized, thus, there is a lot of area to grow in this segment for a considerable number of years.

 

 

 

 

 

 

 

 

 

VALUATION

INDUSTRY	AMOUNT IN RS.
SECTOR	PAINTS AND VARNISHES
FACE VALUE	1
BOOK VALUE	148
MKT.CAP (CRORE)	296,622
CLOSING PRICE AS ON ( 21 / 10 / 22)	3092
52 WEEK H / L	3590 / 2560
5 YRS H / L	3590 / 1082
DIVIDEND YIELD	1%
SECTOR PE	85
TRAILING TWELVE MONTHS PE	81
TRAILING TWELVE MONTHS EPS	38
PRICE BOOK VALUE	21
BSE CODE	500820
NSE CODE	ASIANPAINT

 

 

 

 

 

 

 

BALANCE SHEET AND INCOME STATEMENT

EQUITY AND LIABILITIES PARTICULARS (RS.CR)	MAR ’ 22	MAR ’ 21	MAR ’ 20	MAR ’ 19	MAR ’ 18
EQUITY SHARE CAPITAL	95.92	95.92	95.92	95.92	95.92
TOTAL RESERVE & SURPLUS	13,253.17	11,995.18	9,357.37	8,747.04	7,702.24
TOTAL CURRENT LIABILITIES	5647.44	4575.33	3195.05	3841.41	3398.96
TOTAL ASSETS	19,908.33	17,582.67	13,587.62	13,682.89	11,587.93
9 MONTHS RESULTS PARTICULARS ( RS.CR)	DEC ’ 21	DEC ’ 20	DEC ’ 19	DEC ’ 18	DEC ’ 17
TOTAL INCOME FROM OPERATIONS	18,428.89	12,846.08	13,315.08	12,156.46	10,392.51
BASIC EPS	23.30	23.28	22.96	17.25	14.63
NET PROFIT	2,234.75	2,232.91	2,201.86	1,655.08	1,403.37

 

 

 

 

SHARE HOLDING PATTERN

SHAREHOLDING PATTERN ( JUNE 2022)	% HELD
PROMOTERS	53
FII/FPI	19
DII	08
PUBLIC	20

 

 

 

 

 

 

 

 

 

CHART - SHARE PRICE MOVEMENT – 1 YEAR

 

 

Note: Prices from September 2021 has been considered to chart the graph.

 

 

 

 

 

COMPANY PERSPECTIVE AND REVIEW

·       Asian Paints, presently, orders more than 60% of market share in the decorative paints business and nearly 50% market share in the domestic paint market. The company has maintained a strong Income Statement, despite being capital intensive. Robust product brand, monopolistic position, gradual reduction in re-painting cycle and a strong distribution network justify company’s quality estimate. The stock has been a consistent compounder with continuous stock price appreciation.

·       Market researchers are predicting the Indian paint industry to outperform in terms of revenue growth despite increase in crude prices and have held on to their gross and operating margins because of the complete potency of their  franchise.The company has a good dividend track report and has consistently declared dividends for the last 5 years. Moving Average of the stock is also giving a BUY signal.