(1/19)
About-
The Asian Paints group is the largest paint manufacturer in India. About 84% of its revenue comes from decorative paints
It is also present in the home improvement space through wholly owned subsidiaries, Sleek for kitchens & wardrobes & Ess Ess for bath fittings
About-
The Asian Paints group is the largest paint manufacturer in India. About 84% of its revenue comes from decorative paints
It is also present in the home improvement space through wholly owned subsidiaries, Sleek for kitchens & wardrobes & Ess Ess for bath fittings
(2/19)
Capacity Overview-
โข Installed paint capacity ~17.3 lakh KLpa
โข 8 Decorative paints plants in Ankleshwar, Medak, Kasna, Sriperumbudur, Rohtak, Khandala, Mysuru & Visakhapatnam
โข An industrial paint plant in Taloja (Maharashtra) and a penta plant in Cuddalore.
Capacity Overview-
โข Installed paint capacity ~17.3 lakh KLpa
โข 8 Decorative paints plants in Ankleshwar, Medak, Kasna, Sriperumbudur, Rohtak, Khandala, Mysuru & Visakhapatnam
โข An industrial paint plant in Taloja (Maharashtra) and a penta plant in Cuddalore.
(3/19)
Industry Backdrop:
India has a huge decorative segment with ~75% market share. This is unlike the global marketsโ structure where decorative segment contributes less than 40%.
It is the fastest growing paint market in the world with a 15 year CAGR of 10%
Industry Backdrop:
India has a huge decorative segment with ~75% market share. This is unlike the global marketsโ structure where decorative segment contributes less than 40%.
It is the fastest growing paint market in the world with a 15 year CAGR of 10%
(4/19)
APLs revenue breakup:
โข Decorative Business - ~84%
โข International Business - 11.5%
โข Industrial Coatings - 2.5%
โข Home Improvement - 2%
Distribution Network:
โข Total Dealers : ~60,000
โข Colour tinting machine - ~46000
โข Presence in 15 other countries
APLs revenue breakup:
โข Decorative Business - ~84%
โข International Business - 11.5%
โข Industrial Coatings - 2.5%
โข Home Improvement - 2%
Distribution Network:
โข Total Dealers : ~60,000
โข Colour tinting machine - ~46000
โข Presence in 15 other countries
(5/19)
Performance so far in 2022
โข Revenues for 9MFY22 grew by 53% YOY to โน21,208 crore from โน15,061 crore in 9MFY21, following sharp recovery during the third quarter of current fiscal after covid related localized lockdowns partly impacted off-take in the first quarter.
Performance so far in 2022
โข Revenues for 9MFY22 grew by 53% YOY to โน21,208 crore from โน15,061 crore in 9MFY21, following sharp recovery during the third quarter of current fiscal after covid related localized lockdowns partly impacted off-take in the first quarter.
(6/19)
A true leader:
โข Largest paint company in India
โข 3x the size of the nearest competitor (Berger Paints) in terms of Total sales
โข Has remained a market leader for over 5 decades
โข 9th Largest Paint company in the World
โข 3rd largest in Asia
A true leader:
โข Largest paint company in India
โข 3x the size of the nearest competitor (Berger Paints) in terms of Total sales
โข Has remained a market leader for over 5 decades
โข 9th Largest Paint company in the World
โข 3rd largest in Asia
(7/19)
Risk Profiling of APL:
APLs financial risk profile remains strong driven by low debt on its balance sheet & sizeable liquid surplus at about โน3,400 Cr as on Sept 30
APLs capex (~โน750cr) over the next 2 fiscals can be easily funded from annual cash accrual (>โน1600Cr)
Risk Profiling of APL:
APLs financial risk profile remains strong driven by low debt on its balance sheet & sizeable liquid surplus at about โน3,400 Cr as on Sept 30
APLs capex (~โน750cr) over the next 2 fiscals can be easily funded from annual cash accrual (>โน1600Cr)
(8/19)
Key Growth Drivers:
1. Market leadership:
APL has a dominant share of ~50% in the organised domestic paints market (the 2nd-largest player has a market share of ~16%).
In the decorative paints segment, which comprises 84% of the industry, APL has a share of ~60%.
Key Growth Drivers:
1. Market leadership:
APL has a dominant share of ~50% in the organised domestic paints market (the 2nd-largest player has a market share of ~16%).
In the decorative paints segment, which comprises 84% of the industry, APL has a share of ~60%.
(9/19)
2. Healthy operating margin:
Asian Paintsโ OPM of 16-19% is higher than that of peers. Market leadership helps the group to pass on RM price increases partly to customers. Though OPM are exp to fall to ~14-15% in the current fiscal due to sharp increase in input prices.
2. Healthy operating margin:
Asian Paintsโ OPM of 16-19% is higher than that of peers. Market leadership helps the group to pass on RM price increases partly to customers. Though OPM are exp to fall to ~14-15% in the current fiscal due to sharp increase in input prices.
(10/19)
3. Fastest growing paint industry in the world:
The paint industry is expected to
continue to report healthy volume
growth led by immense demand
for repainting as well from higher
construction activities, premiumisation, urbanisation & ease of painting process
3. Fastest growing paint industry in the world:
The paint industry is expected to
continue to report healthy volume
growth led by immense demand
for repainting as well from higher
construction activities, premiumisation, urbanisation & ease of painting process
(11/19)
4. Best numbers among its peers:
โข Highest OPM% - 16.78%
โข Highest Sales - โน27,860cr in FY21
โข Highest ROIC - 35.41%
โข Highest ROCE 5 Years - 35.7%
โข Highest ROE 5 Years - 26.4%
โข Net Debt free
4. Best numbers among its peers:
โข Highest OPM% - 16.78%
โข Highest Sales - โน27,860cr in FY21
โข Highest ROIC - 35.41%
โข Highest ROCE 5 Years - 35.7%
โข Highest ROE 5 Years - 26.4%
โข Net Debt free
(12/19)
APLs Home Improvement business:
โข Kitchen Business: This segment is showing healthy numbers. Revenue came in at โน111 Cr up 37% YoY in
Q3FY22.
โข Bath Business - Revenue at โน103Cr, up 42% YoY in Q3FY22.
Due to strong collaboration with decorative & sanitary ware.
APLs Home Improvement business:
โข Kitchen Business: This segment is showing healthy numbers. Revenue came in at โน111 Cr up 37% YoY in
Q3FY22.
โข Bath Business - Revenue at โน103Cr, up 42% YoY in Q3FY22.
Due to strong collaboration with decorative & sanitary ware.
(13/19)
Pressure on Numbers going forward:
1. Hike in crude prices that almost makes up for ~55% of the input cost. Though the company has already hiked 15% in Q3.
2. Opening up of economy means people wonโt be spending money on home improvements.
Pressure on Numbers going forward:
1. Hike in crude prices that almost makes up for ~55% of the input cost. Though the company has already hiked 15% in Q3.
2. Opening up of economy means people wonโt be spending money on home improvements.
(14/19)
Other risk: Limited pricing flexibility
The organised paint industry is dominated by a few large players. Consequently, while paint manufacturers have the flexibility to pass on cost increases, their ability to absorb cost benefits & thereby increase margins is limited.
Other risk: Limited pricing flexibility
The organised paint industry is dominated by a few large players. Consequently, while paint manufacturers have the flexibility to pass on cost increases, their ability to absorb cost benefits & thereby increase margins is limited.
(15/19)
The paint sector has a significant impact on the environment owing to high water consumption, waste generation & Green House Gas emission.
The sector has a higher focus on employee safety & the impact on local community given the nature of its operation.
The paint sector has a significant impact on the environment owing to high water consumption, waste generation & Green House Gas emission.
The sector has a higher focus on employee safety & the impact on local community given the nature of its operation.
(16/19)
APLs ESG work:
1. APL reduced its absolute scope 1 & 2 emissions by 54% & 39% by increasing its renewable electricity consumption by 57% from baseline year (FY13-14)
2. It reduced its hazardous waste disposal by 56% from baseline year (FY13-14)
APLs ESG work:
1. APL reduced its absolute scope 1 & 2 emissions by 54% & 39% by increasing its renewable electricity consumption by 57% from baseline year (FY13-14)
2. It reduced its hazardous waste disposal by 56% from baseline year (FY13-14)
(17/19)
Shareholding Pattern:
1. Promoters - 52.63%
2. FIIs - 20.5%
3. DII - 7.2%
4. Public - 19.7%
Shareholding Pattern:
1. Promoters - 52.63%
2. FIIs - 20.5%
3. DII - 7.2%
4. Public - 19.7%
(18/19)
Conclusion:
APL has far superior numbers than its peers. It has a history of adapting well to the changes (APL bought a supercomputer in 1970, 10 years before ISRO & 22 years before any other company would do the same ) & that instils confidence among its investors.
Conclusion:
APL has far superior numbers than its peers. It has a history of adapting well to the changes (APL bought a supercomputer in 1970, 10 years before ISRO & 22 years before any other company would do the same ) & that instils confidence among its investors.
(19/19)
Do you think the growth trajectory will continue going forward?
@caniravkaria @stockifi_Invest @VRtrendfollower @kuttrapali26 @mehrotra_saket @aparanjape @MadhusudanKela
Do you think the growth trajectory will continue going forward?
@caniravkaria @stockifi_Invest @VRtrendfollower @kuttrapali26 @mehrotra_saket @aparanjape @MadhusudanKela
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