Financial Statement Analysis of

Asian Paints Limited

 Group Details
Group Number: 31

Roll No GR Number Name

BTECH - C - 69 11811321 Preeti

BTECH - D - 04 11810103 Rishabh Gupta

BTECH - D - 21 11811231 Shaswat Chand

BTECH - D - 68 11810949 Amisha Yelpale

BTECH - D - 74 11810540 Mayurakshi Zodage

 1. About Asian Paints Limited

2. Manufacturing Locations

3. Company Overview
○ Market Share
○ Revenue Mix
○ Operational Metrics

4. How Asian Paints became a Market Leader

Shareholding Pattern
Contents
○
○ The Supercomputer at Asian Paints
○ Value Creation Model

5. Income Statement

6. Balance Sheet

7. Cash Flow Statement

8. Key Metrics & Ratios

9. Conclusion
 About Asian Paints Limited

● Asian Paints Limited was incorporated in the year 1942.

● India's largest, and World's 2nd largest paint company by market capitalization.

● The company, along with their subsidiaries, has operations in 22 countries globally with 27 paint manufacturing
facilities servicing consumers in 65 countries.

● Company’s vision is “To be an innovative, agile, and responsive world class research and technology organisation
that’s aligned to future customer needs and catalyses the growth of the company across existing and future
businesses.”
About Asian Paints Limited

Headquarters Mumbai

Founders Champaklal Choksey, Chimanlal Choksi, Suryakant Dani, Arvind Vakil

CEO Amit Syngle (1 Apr 2020 - Present)

Market Cap INR 3.24 lakh crores (USD 45.13 billion, 2022)

Revenue INR 20,515 crores (USD 2.9 billion, 2020)

Total assets INR 16,154 crores (USD 2.3 billion, 2020)

 Manufacturing Locations

11 manufacturing locations in India 18 international manufacturing locations under 6 subsidiaries

Kasna
Rohtak

Ankleshwar Visakhapatnam
Sarigam
Patancheru
Taloja

Khandala
Sriperumbudur

Mysuru Cuddalore
 Asian Paints Product Portfolio

● Asian Paints manufactures wide range of paints for Decorative and Industrial use.

● In Decorative paints, Asian Paints is present in all the four segments v.i.z Interior Wall Finishes, Exterior Wall Finishes,
Enamels and Wood Finishes. It also offers waterproofing, wall coverings and adhesives in its product portfolio.

● In the Industrial coatings space, Asian Paints operates through two 50:50 joint ventures with PPG Inc, USA., one of
the largest automotive coatings manufacturer in the world. The first Joint Venture ‘PPG Asian Paints Pvt Ltd’ services
the increasing requirements of the Indian automotive coatings market. The second JV ‘Asian Paints PPG Pvt Ltd’
services the protective, industrial powder, industrial containers and light industrial coatings markets in India.

● Vertical integration has seen Asian Paints diversify into chemical products such as Phthalic Anhydride and
Pentaerythritol, which are used in the paint manufacturing process. The company has discontinued production of
Phthalic Anhydride from end of July 2017.

● In the Home Improvement and Décor category, the company is present in the Kitchen and Bath fittings space and
offers various products under Sleek and Ess Ess brand respectively.
New Categories and Offerings

● The company has recently launched ‘Viroprotek’ range of

hand, surface and space sanitizers and disinfectants. It is
also offering ‘San Assure’ a sanitization service and ‘Safe
Painting’ service for its customers.

● Asian Paints has also recently launched range of Furniture,

Furnishings and Lighting Products under three brands -
Nilaya, Royale and Ador, thus offering wide spectrum of
offerings in the ‘Home Décor’ category.

● It has also launched ‘Beautiful Homes Service’ - an

exclusive end-to-end solution that provides consumers a
personalized interior design service with professional
execution to create their dream homes.
 ● Safe Painting Services ● Wood Solutions

● Interior Design Service ● Waterproofing Solutions

Other Services Provided ● Colour Consultancy Online ● Design Wall Makeover

● Large Painting Project ● Quick Home Makeover

 Company Overview

MARKET SHARE

Decorative Paints 60%

Automotive Coatings 20%
Company Overview

REVENUE MIX
Company Overview

REVENUE MIX
 Company Overview

OPERATIONAL METRICS

3.62% 0.16%
Advertisement Spend as a % of Total Sales Management Compensation as a % of Sales

250,000 MTPA 85,000 MTPA

Manufacturing Capacity - Paints Manufacturing Capacity - Resins & Emulsions
How Asian Paints became a
Market Leader

1. Strong and responsible management

2. Extensive use of latest technology

3. Well thought out and tested value creation model

 Shareholding Pattern

● Constant and majority promoter holding shows their belief in the vision of the company.

● Government holding shows the importance the company has as an asset.

 The Supercomputer at Asian Paints

● Champaklal Choksey (Co-Founder) bought the first-ever supercomputer in India in 1970 for 8 crore rupees.

● To improve the profit margins of the company by removing the distributor and wholesalers and supplying the products directly to the
dealers.

● For a span of 50 years, Asian Paints Ltd has collected data on:
○ What color is being sold the most?
○ What quantity is being sold?
○ And what tin size is being sold the most?

● Data collection is 6-20 times more than any other Indian company and a 97% accuracy about which paint will sell, of what size on a
particular day, in a particular store, at any given time.

● The stocks at Asian Paints stores get replenished 4 times a day.

● Asian Paints Ltd sells to 55% of the country 4 times a day. Whereas its competitors, Berger sells it to 20% of the country twice a day,
and Akzo Nobel serves 10% of the country just once a day.
 Value Creation Model

Strategic Focus

● Customer management

● High-performance team

● Innovative and co-created

solutions

● Sustainability

● Cutting-edge technology
INCOME STATEMENT
An income statement is an important financial statement used for reporting a
company's financial performance over a specific accounting period.
Last 5-year Financial Performance Overview

● Revenue growth of 9.5% CAGR.

● EBITDA growth of 13.9% CAGR.

● PAT growth of 14.9% CAGR.

● Market capital growth of 30% CAGR.

● Net Profit has grown at a CAGR of 14.16%

● Today, the promoters of Asian Paints are worth INR 1.27 lakh crores (USD 17 billion).
 Company Stock

● Share price has increased by about 264% in the last 5 years.

● It has grown by a CAGR of 27% over the last 5 years and 35% in the last three years.

● Company has issued bonus shares 6 times and a stock split once since being listed.
 Quarterly Results

● Evident sales growth over the last 12 quarters

● Strong Revenue Growth

● High Margins driving Profit Growth

 Profit and Loss Statement
● Revenue grew 7.4% YoY to Rs 217.1bn

● EBITDA increased 16.7% YoY to Rs 48.6bn.

BALANCE SHEET
Liabilities
Assets
CASH FLOW
The term cash flow refers to the net amount of cash and cash equivalents being
transferred in and out of a company. Cash received represents inflows, while money spent
represents outflows.
 Cash from Operating Activities

● Steady cash growth rate from operating profits.

● Increase in accounts payable indicates a positive cash flow.

● Negative cash from inventory shows the company has purchased more goods than it has sold.
 Cash from Investing Activities

● The company invests heavily in other businesses from the cash in hand.

● No positive cash generation from investments so far.

 Cash from Financing Activities

● The company gives away a lot of cash through its dividend payments.

● Actively repaying debt.

 INR 2492.41 Cr INR 3401.48 Cr
Net Cash Flow for year ended March 2021 Free Cash Flow for year ended March 2021
 Key Metrics

34.8% 35.4%
Return on Capital Employed Return on Invested Capital

58.6 days
Cash Conversion Cycle

27.3% 17.5%
Return on Equity Return on Assets
 Ratios

1.19 2.90
Asset Turnover Ratio Inventory Turnover Ratio

0.11 1.87
Debt to Equity Ratio Current Ratio
Conclusion - SWOT Analysis
 Conclusion - Corporate Strategy

DISCOVER
DEVELOP

New Exploit new markets by creating

Build new competency to create
products/services by leveraging
the future
existing competencies differently

DEFEND DEEPEN

Existing Defend existing market by Build complementary/new

strengthening existing competency to fortify position in
competencies existing market

Existing New
 Conclusion - The Pandemic and Beyond

● During the pandemic, the company operated approximately 95% of sales offices, and its manufacturing facilities
operated at about 60-70% level.

● Comfortable cash flow position and strong liquidity, Asian Paints ability to service debt and other financing
arrangements remained unaffected.

● Boom in real estate and auto sectors due to low interest rates have helped the company in a major way.

● High inflation has affected the OPM of the company, but the management have taken adequate measures to tackle
the problem.

● Asian Paints continues to attract investments from all over the world making its stock an excellent consistent
compounder.

● Strong workforce makes them capable of continuing their dominance and leading the market in the eastern world.
 References

https://en.wikipedia.org/wiki/Asian_Paints

https://www.asianpaints.com/about-us.html

https://www.asianpaints.com/more/investors/AnnualReportFY2021.html

https://www.screener.in/company/ASIANPAINT/consolidated/

https://www.tijorifinance.com/company/asian-paints-limited/
Thank You