Professional Documents
Culture Documents
• Raw materials account for around 45-50% of the industry’s sales on an average
• The raw materials used for manufacturing paints include resins (binders), pigments, solvents, additives
• Key pigments used in the manufacture of paints is titanium dioxide (TiO2) –
Titanium Oxide
• The demand for industrial paints is also likely to grow backed by an expected improvement in industrial output
• CARE Ratings expects 10-12% growth in the two-wheeler segment (accounting for about 80% of the automobile
industry’s sales) which is also likely to augur well for the paints industry.
• The automotive segment drives the demand for industrial paints as it forms a significant component of industrial
paints
Industrial Paints:
Industrial Paint Segment Market Share Growth Rate
Automotive & General Industrial 50%
Protective Coatings 40% 14% CAGR
Powder Coatings 10%
Key Players
% share of industrial
Industrial coatings Key players
coatings market
Auto OEM 24 Kansai Nerolac, BASF, Asian PPG, Nippon, Berger, Maharani Paints
Auto refinish 14 Akzo Nobel, Esdee Paints, Asian Paints, BASF
Protective/General industries 32 Berger, Akzo Nobel, Kansai Nerolac, Asian Paints, Shalimar
Powders 14 Kansai Nerolac, Marpol, Asian Paints, Jotun
Coil 6 Berger-Becker, Nippon, Akzo Nobel, BASF, PPG, KCC
Others 10
Technical Collaboration
Automotive paints demand to grow in low teens
• Auto industry witnessed pressure on volumes in FY15-16 due to
1) weak rural demand due to two successive weak monsoons
2) damage to winter crop due to untimely rains
3) Little increase in MNREGA allocations and
4) Mining ban in a few states impacted demand for
commercial vehicles
o Growth in auto insurance is fuelling demand for refinish paints and coatings as increasing number of consumers have
insurance claim for accidents.
o Emergence of Multi-Shop Operators (MSO) chains in the service and repairs segment is prompting consumers to opt for
better services and vehicles; this is propelling the demand for refinish coatings
o Pessimism in the economy in the recent past changed consumer’s preference towards used cars over new cars
Powder Coatings
• Powder Coatings market is Rs14bn; 15% CAGR likely on durables and home improvement demand
• High performance Powder coating is amongst the fastest growing industrial coatings segments, given the toughness, corrosion/
scratch resistance and finish of the products
Performance Coatings
Global Market:
CAGR 5.91%
Global FY 17 FY 18 FY 19 FY 20 FY 21 FY 22
Industrial USD bn
Paints 98 104 110 117 124 131
Stake Amount
Target Acquirer Date Valuation EV/S EV/EBITDA P/E EV/S EV/EBITDA P/E
Acquired (INR mn)
Marpol Kansai
Apr-18 100% 359 359 0.5x 6.2x 20.9x 0.5x 7.3x 22.8x
Pvt Ltd Nerolac
Saboo
Coatings Berger Jun-17 100% 816 816 1.3x 8.6x 15.4x 1.1x 5.9x 9.7x
Pvt Ltd Paints
Mean 0.9x 7.4x 18.1x 0.8x 6.6x 16.3x
Median 0.9x 7.4x 18.1x 0.8x 6.6x 16.3x
Cost Structure