You are on page 1of 13

Asian Paints

Asian Paints is an Indian paint company headquartered in Mumbai, India. Asian Paints is Indias largest paint company and Asias third largest paint company, with a turnover of Rs 77.06 billion. It is one of the largest paint corporations that operates in 17 countries and has 23 paint manufacturing facilities in the world servicing consumers in over 65 countries. Besides Asian Paints, the group operates around the world through its subsidiaries Berger International Limited, Apco Coatings, SCIB Paints and Tubmans.

History
Origins:

Over the course of 25 years Asian Paints has become a corporate force and India's leading paints company. Driven by its strong consumer-focus and innovative spirit, the company has been the market leader in paints since 1968. Today it is double the size of any other paint company in India. Asian Paints manufactures a wide range of paints for Decorative and Industrial use.

1st February, 1942:

Armed with little knowledge and great determination, Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C. Dani and Arvind R. Vakil get together to manufacture paint in a garage on Foras Road, Bombay. They name their company 'The Asian Oil & Paint Company', a name that they picked randomly from a telephone directory.
1945:

Asian Paints touches a turnover of Rs. 3,50,000, with an innovative marketing strategy "to reach consumers in the remotest corners of the country with small packs." Asian Paints mascot, Gattu, the mischievous kid, is born.
1957 66:

The family-owned company makes the transition to a professionally managed organisation. British company Balmer Lawrie rejects the products of a giant British paint company in favour of Asian Paints. Asian Paints embarks on an ambitious grassroots marketing campaign, partnering with thousands of dealers in small towns all over India.
1967:

Asian Paints emerges as India's leading paint company ahead of any international competition.
Today:

Asian Paints becomes the 10th largest decorative paint company in the world Asian Paints is more than twice the size of its nearest competitor It is one of the most admired companies in India Present in 22 countries with 27 manufacturing locations, over 2500 SKU's, Integrated SAP - ERP & i2 SCM solution Rated Best Employer by BT-Hewitt survey, 2000 Bluest of the blue chips by Hindu Business Line; Most admired company to work for by ET-BT survey, 2000 On the recommendations of Booz, Allen and Hamilton, Asian Paints restructured itself into Growth, Decorative and International business units and adopted SCM and ERP technology Asian

Paints aims to bcome the 5th largest decorative paint company in the world.

Major Products and Services


Asian Paints manufactures and markets industrial and decorative coatings. The company's key products and brands include the following: Products: Decorative paints: Interior wall paints Exterior wall paints Wood surface paints Metals surface paints Industrial coatings: Protective coatings Floor coatings Road markings Automotive: Body coatings Plastic coatings Ancillaries: Brands: Ace & Apex Apcolite Apex Apex Ultima Asian Paints Colour Next Premium Gloss Enamel Royale Royale Play Touchwood Tractor Emulsion Utsav.

Forbes listing
Forbes Global magazine USA ranked Asian Paints among the 200 Best Small Companies in the World for 2002 and 2003 and presented the 'Best under a Billion' award, to the company. Asian Paints is the only paint company in the world to receive this recognition. One of the country's leading business magazines "Business Today" in Feb 2001 ranked Asian Paints as the Ninth Best Employer. It has been recognized by "Economic Times" as well. Forbes has also ranked Asian Paints among the Best under a company in Asia In 2005, 06 and 07.

Financial Deals
Asian Paints has acquired 30% stake in Dutch Boy Philippines from Berger International Limited (BIL), an indirect subsidiary of Asian Paints. Asian Paints executed a conditional stock purchase agreement relating to the sale of 427,000 shares of Dutch Boy Philippines, which ceases to be an associated company of BIL. Asian Paints, Ltd. (APL) has entered into a 50:50 new joint venture agreement with PPG Industries, Inc. (PPG), a USbased provider of paints, coatings and specialty products, to accelerate the growth of non-decorative coatings business in India. This is the second joint venture between APL and PPG. They currently have a 50-50 joint venture named Asian PPG Industries Ltd (APPG).

Revenue
The company recorded revenues of INR77,888.7 million (approximately $1,708.1 million) in the fiscal year ended March 2011, an increase of 14.2% over 2010. The company's operating profit was INR13,956 million (approximately $306.1 million) in fiscal 2011, an increase of 2% over 2010. Its net profit was INR8,432.4 million (approximately $184.9 million) in fiscal 2011, an increase of 0.9% over 2010.

International operations
Asian Paints operates in 17 countries across the world. It has manufacturing facilities in each of these countries and is the largest paint company in eleven of these markets. Asian Paints operates in five regions across the world viz. South Asia, Southeast Asia, South Pacific, Middle East and Caribbean region through the five corporate brands viz. Asian Paints, Berger International, SCIB Paints, Apco Coatings and Tubmans. The countries that Asian Paints has presence are as follows: Asian Paints in South Asia (India, Bangladesh, Nepal and Sri Lanka) SCIB Paints in Egypt Berger in South East Asia (Singapore), Middle East (UAE, Bahrain and Oman), Caribbean (Jamaica, Barbados, Trinidad & Tobago) Apco Coatings in South Pacific (Fiji, Tonga, Solomon Islands and Vanuatu) Tubmans in South Pacific (Fiji and Samoa) The company has a dedicated Group R&D Centre in India and has been one of the pioneering companies

in India for effectively harnessing Information Technology solutions to maximize efficiency in operations.

Group Subsidiaries
1) Apco Coatings is a subsidiary of Asian Paints in the South Pacific islands. Asian Paints operates in Australia, Fiji, Tonga, Solomon Islands and Vanuatu under the brand name of Apco Coatings.APCO COATINGS 2) Asian Paints Industrial Coatings Limited has been set up to cater to the powder coatings market which is one of the fastest growing segments in the industrial coatings market. ASIAN PAINTS. 3) In 1994, Berger units were brought under the single umbrella of the holding company 'Berger International Limited (BIL)' with headquarters in Singapore, which was also listed on the Singapore stock exchange. In November 2002, BIL became a part of the Asian Paints Group. Incidentally, Berger Paints Jamaica Limited, which is listed on the Jamaican stock exchange, is amongst the top ten companies in the country in terms of market capitalisation. In the Middle East too Berger is a well-respected brand. It is the largest paint company in Bahrain. Using its state-of-the-art manufacturing facilities there, and in United Arab Emirates, it exports to countries in the Commonwealth of Independent States, Gulf Cooperation Council and Africa. In South East Asia Berger enjoys a fine reputation and has operations in Singapore and Thailand. BERGER 4) SCIB Paints ranks amongst the top five paint companies in Egypt. SCIBPAINTS

Campaigns
Late Nineties: During the late nineties the brand had to be reinvented. Because no longer festivities formed an important part in ones life. Since many brands went after festival seasons, the positioning platform has become cluttered. More over the consumer buying behavior has changed. The category was becoming less seasonal. People started associating more importance to home decor and interiors. The choice of color became a high involvement

decision. From a low involvement category, paint was increasingly becoming a high involvement category. Logo Change: The brand also went in a brand overhaul. The logo was changed to a contemporary up market one designed by Enterprise IG based in Singapore. The logo/design was to convey self expression, sophistication and Technology. Thus came the birth of a wonderful positioning strategy created by O&M. The insight was that the brand is about people and homes and homes reflect the people living in it. Hence " Har Ghar Kuch Kehta Hai" translated to " Every Home has a story to tell". This campaign is a perfect example of a brand laddering up and connecting to a higher level in the mind of the customer. The campaigns reinforced the brand as a premium emotional brand. Along with the campaign Asian Paints also ran parallel ads for its sub brands. Saif Ali Khan endorsed the premium brand Royale .For Apex Ultima, the campaign was highly localized and was different in different market.

Balance sheet
Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Sources of funds
Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus 95.92 1,879.40 95.92 1,461.30 95.92 998.55 95.92 832.58 95.92 648.16

Loan funds
Secured loans Unsecured loans Total 23.43 40.70 2,039.45 25.59 40.70 1,623.51 24.59 40.70 1,159.76 36.70 40.70 1,005.90 66.90 40.70 851.68

Uses of funds
Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments 1,611.22 554.03 1,057.19 67.32 1,034.76 1,194.39 486.93 707.46 380.72 703.69 1,116.93 494.02 622.91 164.64 234.77 937.89 509.06 428.83 136.25 422.88 806.20 471.29 334.91 16.31 334.39

Net current assets


Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total 1,729.79 1,849.61 -119.82 2,039.45 1,364.85 1,533.21 -168.36 1,623.51 1,172.36 1,034.92 137.44 1,159.76 1,035.22 1,017.28 17.94 1,005.90 869.21 703.15 166.06 851.68

Notes:
Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity sharesoutstanding (Lacs) 632.33 568.57 505.87 959.20 155.31 186.79 223.80 959.20 157.39 178.76 356.87 959.20 345.50 254.26 222.05 959.20 257.01 183.02 180.22 959.20

Asian Paints Report Card


Attribute Market Capital (Rs.cr) PE ratio EPS (Rs) Sales (Rs crore) Face Value (Rs) Net profit margin (%) Reserves (Rs.cr) Book value Dividend yield Value Date 26,605.81 34.08 29/04/2011 81.40 Mar 2010 5,776 31/03/2010 10 12.99 31/03/2010 1,461.30 162.35 0.97

Asian Paints Related Indices


Indices BSE100 BSE200 BSE500 CNX 100 CNX MIDCAP CNX NIFTY JUNIOR Price 7,942.77 1,853.46 5,785.83 4,485.90 6,095.50 8,312.10 Change %Change 14.83 2.57 7.15 8.55 -16.35 -21.00 0.19 0.14 0.12 0.19 -0.27 -0.25

Asian Paints Stock Returns


Time Span Today Week Month Three Months Six Months One Year Two Years Three Years Five Years Price 2,593.10 2,666.45 2,881.00 3,149.40 3,308.30 2,819.75 1765.25 871.90 733.55 Change %Change -1.85 -71.50 -286.05 -554.45 -713.35 -224.80 829.70 1,723.05 1,861.40 -0.07 -2.68 -9.92 -17.60 -21.56 -7.97 47.00 197.62 253.75

Ratios
Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Per share ratios


Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) Reported cash EPS (Rs) Dividend per share Operating profit per share (Rs) Book value (excl rev res) per share (Rs) Book value (incl rev res) per share (Rs.) Net operating income per share (Rs) Free reserves per share (Rs) 80.11 89.96 80.81 90.66 32.00 121.07 205.93 205.93 688.70 195.88 69.47 75.80 80.74 87.08 27.00 107.69 162.35 162.35 559.61 152.29 38.63 44.59 37.78 43.74 17.50 61.92 114.10 114.10 470.20 104.05 39.25 43.82 39.12 43.68 17.00 59.37 96.80 96.80 374.85 86.75 27.93 32.66 28.36 33.10 13.00 45.48 77.57 77.57 307.90 67.52

Profitability ratios
Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) Adjusted return on net worth (%) Reported return on net worth (%) Return on long term funds (%) 17.57 16.14 11.61 12.92 38.90 39.24 55.79 19.24 18.11 14.29 13.42 42.79 49.73 62.95 13.16 11.90 7.97 9.40 33.85 33.10 49.35 15.83 14.62 10.28 11.52 40.55 40.40 58.11 14.77 13.23 9.11 10.49 35.99 36.56 52.70

Leverage ratios
Long term debt / Equity Total debt/equity Owners fund as % of total source Fixed assets turnover ratio 0.03 0.03 96.85 4.25 0.04 0.04 95.91 4.68 0.05 0.05 94.37 4.17 0.06 0.08 92.30 3.97 0.07 0.14 87.36 3.81

Liquidity ratios
Current ratio Current ratio (inc. st loans) Quick ratio Inventory turnover ratio 0.93 0.93 0.34 7.08 0.89 0.88 0.37 7.95 1.13 1.13 0.58 9.80 1.02 0.99 0.47 8.03 1.24 1.09 0.59 8.27

Payout ratios
Dividend payout ratio (net profit) 46.06 39.03 54.19 50.84 52.36

Mar ' 11 Dividend payout ratio (cash profit) Earning retention ratio Cash earnings retention ratio 41.05 53.54 58.63

Mar ' 10 36.19 54.64 58.43

Mar ' 09 46.81 47.00 54.09

Mar ' 08 45.53 49.34 54.61

Mar ' 07 44.87 46.82 54.53

Coverage ratios
Adjusted cash flow time total debt Financial charges coverage ratio Fin. charges cov.ratio (post tax) 0.07 75.34 54.22 0.09 56.68 44.73 0.15 39.57 27.37 0.18 46.09 32.13 0.34 30.56 21.70

Component ratios
Material cost component (% earnings) Selling cost Component Exports as percent of total sales Import comp. in raw mat. consumed Long term assets / total Assets Bonus component in equity capital (%) 57.71 17.08 0.66 23.86 0.54 97.98 55.26 17.51 0.64 20.74 0.56 97.98 58.55 17.27 0.64 19.49 0.45 97.98 55.71 17.98 0.67 21.04 0.47 97.98 58.68 17.23 0.81 17.96 0.42 97.98

You might also like