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Fundamental Analysis : Asian Paints Ltd.

Asian Paints group is the largest paint manufacturer in India also engaged in the business of manufacturing of varnishes, enamels or lacquers, surfacing preparation, organic composite solvents and thinners. It operates in 15 countries and has 26 paint manufacturing facilities in the world serving consumers in over 60 countries.

Besides Asian Paints, the group operates around the world through its various brands viz. Asian Paints Berger, Apco Coatings, SCIB Paints, Taubmans, Causeway Paints and Kadisco Asian Paints.

It also manufactures metal sanitary ware such as bath, sinks, washbasins and similar articles. Recently introduced Lightings, Furnishings and Furniture thus adding more products in the Home décor and Interior Design category.

Market Cap
₹ 244,763 Cr.

Current Price
₹ 2,552

High / Low
₹ 2,873 / 1,483

Stock P/E
89.0

Book Value
₹ 115

Dividend Yield
0.47 %

ROCE
33.8 %

ROE
27.5 %

Face Value
₹ 1.00

Price to book value
22.2

EPS
₹ 28.7

High price all time
₹ 2,873

Low price all time
₹ 36.2

Return over 1month
6.23 %

Return over 3months
-8.06 %

Return over 6months
25.1 %

Earnings yield
1.60 %

Sales
₹ 19,697 Cr.

Debt
₹ 1,079 Cr.

Enterprise Value
₹ 245,201 Cr.

Profit Var 5Yrs
14.2 %

Profit Var 3Yrs
11.6 %

Reserves
₹ 10,934 Cr.

Promoter holding
52.8 %

Debtor days
32.4

Debt To Profit
0.40

Qtr Sales Var
25.2 %

Company is almost debt free.
Company has a good return on equity (ROE) track record: 3 Years ROE 25.72%
Company has been maintaining a healthy dividend payout of 43.40%
Stock is trading at 22.19 times its book value
The company has delivered a poor sales growth of 8.22% over past five years.

Revenue Breakup 

Decorative Coatings - 83.70%
Industrial Coatings - 11.60%
International Operations - 2.40%
Home Improvement Business - 2.30%

Leadership 

3rd Largest Paint Co. in Asia.
9th Largest Coatings Co. in the World.
50+ Years of Market Leadership in India.
Leading wallpaper manufacturer under the brand NILAYA.
3x of nearest Competitor in India.
Top 3 player in decorative paints in 12 of the 14 countries outside India.

Paint Business

The group enjoys a dominant share of over 50% in the organized domestic paints market (the second-largest player has a market share of about 16%). In the decorative paints segment, which comprises about 70-75% of the Indian paints industry, the group has a share of about 60%. It also has a healthy position in the automotive industrial coatings segment with a market share of about 20%.

Kitchen business

The industry has been witnessing a shift towards branded modular kitchen solutions from local carpenters and interior designers. The Company forayed into the Kitchen business by acquiring 51% stake in Sleek in FY 2013-14. During FY 2017-18, the Company acquired the remaining 49% stake in Sleek from the previous promoters to make it a wholly owned subsidiary. There's huge potential for Co. as the overall market in India is estimated to be worth more than 15,000 Crores and is a fragmented market with many unorganized players.

Bath business

Asian Paints forayed into the Bath business by acquiring the front-end business of Ess Ess in FY 2014-15. Over the years, the Company has expanded its network footprint as well as the range of products it offers.

Paint Manufacturing Locations (INSTALLED CAPACITY/ANNUM)
Decorative Paint
1 Rohtak, Haryana 4,00,000 KL
2 Kasna, Uttar Pradesh 80,000 KL
3 Ankleshwar, Gujarat 1,30,000 KL
4 Khandala, Maharashtra 3,00,000 KL
5 Patancheru, Telangana 80,000 KL
6 Visakhapatnam, Andhra Pradesh 3,00,000 KL
7 Mysuru, Karnataka 3,00,000 KL
8 Sriperumbudur, Tamil Nadu 1,40,000 KL
Chemical
9 Cuddalore, Tamil Nadu 6,720 MT
Industrial Paint
10 Sarigam, Gujarat 7,200 MT
11 Taloja, Maharashtra 14,000 KL
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