RURAL MARKETING PRESENTATION:

Indigo Paints Limited

Presented by:
M402 – Parth Ajmera
M405 – Jadania Bardey
M406 – Sneha Bhalekar
M421 – Anita Gour
M424 – Nisha Gupta
M466 – Ruee Tambat
Introduction &
Market Analysis
Indigo Paint Limited Story: How Jalan Painted his journey?

2000 2001 2007 2010 2013 2015 2016 2019 2021

Repositioned Investment of Acquired

“Indigo Paints” Manufacturing Geographical Appointed MS IPO Launch
Shifted to Own with New Rs 50 Cr Kerala Based
Incorporated of Cement Expansion Dhoni as raising
factory area, Packaging Approx by Pain Company
at the age of Paints in Brand
Jodhpur in 11 states Design and Sequoia in the i.e. Hi-Build 1170 Cr INR
43 Jharkhand Ambassador
Logo company Coatings
Indigo Paint’s Manufacturing Facilities
Indigo Paint’s Performance
Indigo’s EBITDA margin has steadily expanded from -4.5% in FY16 to 14.6% in FY20.

(Values in Cr)
(Values in Cr)
Total Revenue Net Profi t
₹ 1,000.00 ₹ 916.90 ₹ 90.00 ₹ 84.00
₹ 900.00 ₹ 80.00 ₹ 70.90
₹ 800.00 ₹ 726.90 ₹ 70.00
₹ 700.00 ₹ 626.40 ₹ 60.00
₹ 600.00 ₹ 535.63 ₹ 47.80
₹ 50.00
₹ 500.00
₹ 400.00 ₹ 40.00
₹ 30.00 ₹ 26.87
₹ 300.00
₹ 200.00 ₹ 20.00
₹ 100.00 ₹ 10.00
₹- ₹-
FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22

Analysis of growth:
 Operating leverage
 Reduction in advertising spend as a percentage of net sales
 Improvement in gross margin due to lower input prices
 Improvement in revenue mix
 Steady expansion of distribution network and tinting machines
 Introduction of new products

We believe the company will continue to benefit with revenue mix improvement and operating leverage going ahead.
Paint Industry Analysis
Indian paints & coatings industry estimated to grow to INR one lakh crore in next 5 years
Paint Industry Analysis

Rise in
Growing disposable
demand from income &
smaller towns Incremental
and rural areas consumption
expenditure

Dealer
Smart Cities
expansions
India Paints & Coatings Industry Segments

• Water Borne coating.

Technology
• Solvent borne coating.
• Power coating.
• Radiation cured coating.

• Acrylic
• Alkyd

Resin Type • Polyurethane

• Epoxy
• Polyester

• Architectural
• Automotive
End user • Wood
• Protective coating

Industry- • General industrial

• Transportation
• Packaging
SWOT Analysis
SWOT Analysis
INDIGO
• Company with low debt
• Wide array of products
and services
• Established reputation in
industries
• Net profit improving in
last 2 years
• Solid financials with
strong cash flow
ASIAN PAINTS
• One of the largest paint
manufactures in India
• Wide range of products,
including decorative ,
industrial & marine
coatings
• Global presence with
operation in over 65
countries
• They offer free shipping
and delivery to customers
across India so, they don’t
have to worry about the
cost of shipping and
delivery.
STRENGTHS
NEROLAC
PAINTS
• Wide range of products,
global presence, strong
brand
• Highly washable & long
lasting
• Excellent coverage and
opacity
• Less prone to fading and
discoloration
• Variety of aesthetic finishes
• Ideal for bathrooms,
kitchens and other high-
traffic areas
BERGER
• Customer centric approach,
effective customer
engagement strategies and
the ability to create
personalized solutions
• They use cutting edge
technology and modern
production processes to
ensure the highest quality
of their products
• They provide excellent
customer service with both
online and offline customer
support
SWOT Analysis
INDIGO
• Reliability on a limited
numbers of Suppliers
• Limited Geographic
presence
• High Competition in the
industry
• Limited advertising and
marketing campaigns
• Decline in operating
profit margins in YOY
NEROLAC
ASIAN PAINTS BERGER
PAINTS
• Family run business with • Limited access to capital , • Amount of resources and
limited access to large limited technology access time needed to understand
pools of capital • Business model can be customer needs, and a lack
• Limited access to latest easily replicate by its rivals of flexibility
technological advancement • Costly supply chain n
• Only 14% market of logistics
industrial paints
• Difficult to position the
premium brands in rural
areas
WEAKNESS
SWOT Analysis

NEROLAC
INDIGO ASIAN PAINTS BERGER
PAINTS

• Expansion into new • Growing demands for Eco- • Growing demand for eco – • Less market spend
markets friendly paints friendly paints, expansion compared to rivals
• Introducing innovative • Expansion into new into new markets • Wide potential for
products n services markets • offers on bulk purchase commodity diversification
• Leveraging customer • Rural market penetration and special discount • Untapped market potential
relationships to increase • Taping Auto mobile paint increase the demand of
sales industry paints
• Expanding customer • Strategic and consistent
base market communication
• Good time to enter to
hold for long term profits
• Brokers upgraded
recommendation or
target price in past three
months

OPPORTUNITIES
SWOT Analysis

NEROLAC
INDIGO ASIAN PAINTS BERGER
PAINTS

• Competition • Increasingly competitive • Increasing competition, • Include customer fatigue,

• New Entrants marketplace rising costs of material and lack of customer
• Changes in the market, • Price competition from labour innovation, and difficulty in
Economic downturns, regional players • Keep fluctuating prices adapting to changes in
increased regulations & • Increasing cost of raw • Raw material shortages customer behaviour
changes in consumer material and labour and market volatility. • Unorganized players
spending pattern • Intense competition from
• Trends in color and both the local &
design can Change international market.
quickly.
• Income increasing in
non-core activities.

OPPORTUNITIES
Michael Porter’s 5
Force Model
Threat of New Entrants

• Established brand well developed there brand in the market

• Rural markets may pose challenges for new entrants due to
limited infrastructure and distribution channels

Barrier Strategy :
• Product differentiation
• brand loyalty, economies of scale
• Focus on (differentiated) distribution
• Advertisement & Strong distribution network

Threat of new entrants is Low.

Threat of substitutes

• Traditional and homemade paint

alternatives still exist
• Wallpapers
• Same products offered through top
companies.

Threat of substitutes is Medium.

Bargaining power of suppliers

Raw Material Consumed

• 300+ raw material required – Pigments,
binders, additives, solvents etc.
• Shortage in global supply of Titanium
Dioxide Pigment – 70% imported. Expansion
Plans –Indian company plans to double the
capacity power plant. Indigo Asian Paints
Paints 0.509 0.553
• Other raw material- crude derivatives high
in price
Nerolac
0.685 Berger
0.589

Bargaining power of suppliers is High.

Aisan Paints Berger Nerolac Indigo Paints

Bargaining power of buyer

• Rural consumers may have moderate

to high bargaining power, especially
if they have multiple paint brands to
choose from.
• Indigo Paints needs to consider
affordability and value for money to
maintain or increase market share.

Customers enjoy High bargaining

power.
Competitive Rivalry

Distribution network of paint companies

• 66% paint industry dominated by top

companies- Asian Paints, Berger
Paints, Kansai Nerolac and Akzo
Nobel.
• In rural areas, local & regional brands
have stronger ties with the
community.
• Distribution network, Product
innovation & brand building plays
important role.

Competition is High in the competitors

Segmentation, Targeting,
Positioning &
Differentiating
Segmentation of Paint Industry

Emulsions
(cities)
Decorative
Distempers
Indian Paint (villages)
Industry
Automobiles
Industrial
Marine
paints and
others
Customer segment and Target Audience

it has a huge
presence in tier
2 or tier 3
Kerala is the largest market for the
cities and
rural area company accounting for 30% of revenues

rural area
customers,
Semi-urban,
and Urban
area
customers
Bottom-up
approach: This strategy
has resulted in profitable
growth for the company.
5th position in the
largest decorative Indian
paint companies in terms
of revenue generation
Targeting & Positioning

Decorative Paints Targeted at? Requirement

The durability rather
contractors
Exterior paints Builders real estate developers than smoothness or
colour
Smoothness, texture,
Interior Paints and carpenters and
homeowners interior designers colour and finish of the
enamels contractors
paint
Primers, putties and
carpenters
the other such contractors Painting process
ancillary products

Multiple brands from peer's vs single brand from Indigo. While multiple brands reduce the risk of depending on one
brand, Indigo invests in creating only one strong brand.
Differentiating

 some of them also offer waterproofing;

 some can be used on multiple surfaces such as wall, metal and wood
 some offer anti-fungal and anti-algal properties too.
 Some of the differentiated products, such as floor paint and bright ceiling paints, cater to specific requirements of the
consumer.
 As these products are either ‘problem-solution’ in nature, or offer multiple benefits, they give higher value to
consumers compared to those offered by peers.
Ansoff Matrix
Ansoff Matrix

1) Increase Market share using Push

Market Strategy
Diversification 2) Increase availability by reducing
Development
waiting time
3) Enhance revenue to dealer ratio
4) Cost reduction through strategic tie-
ups
Market New Product 5) Exploration of Industrial segment
Penetration Development 6) Diversification in home décor and
industrial furniture.
Market Penetration: Organic Growth
Indian paint industry as per usage Dealer Network
Wood Coating and
Metal Paint 70000
14% 60587
60000

Flooring
50000
5%
Interior 40000
29500 30000
• Increase incentives offered to
39%
Roofing 30000 27500
6%
20000
10000
15787
dealers
0
• Demand enhancement: Product
s s c s ns
Pa
i nt
rP
ai
nt
N e ro
la
Pa
i nt
e ctio awareness through ads: Digital
ia
n e i g o oj
As Be
rg
Ka
ns
a
In
di
i nt
s Pr
Marketing and Social Marketing
Pa
Exterior
di
go • Increase the availability of
36%
In
product
Tinti ng Machine Penetrati on Revenue Per Dealer • Tie up with Real Estate: Lodha
100%
90%
90% 3.5
2.9
Group, Kalpataru Group, KJ
3
80%
70%
70% 70%
2.5
Raheja Etc.
63%
60% 2 1.9
50% 45%
40% 1.5 1.2 • Highlight differentiated products
30%
20%
1
0.58
0.8
to customers
0.5
10%
0% 0
ts ts a c ts ns nt
s
nt
s
la
c
nt
s ns
in in ol in tio i ai ro i tio
Pa rP
a er Pa e c Pa rP e Pa e c
ia
n e iN g o
ro
j
ia
n e i N g o
ro
j
As rg ns
a di sP As rg ns
a di sP
Be Ka
In t Be Ka
In t
in in
Pa Pa
g o g o
di di
In In
Market Development

• Expansion in new states and emphasis

on market share gains
• Tier 1 cities – To start Indigo help
outlets/colour stores (250 stores in 3
years)
• Industrial segment tie up with
automobile , govt projects and
chemical industries
• International Expansion: China Export
Diversification

Vertical Diversification

• Joint Venture Furniture Company Tie

Up with - Greenply industries Ltd.

P&L (in Rs. Cr.) 2022 2021 2020

Revenue from Operations Horizontal

356.29 342.45 286.84
(Gross) Diversification
Total Revenue 363.11 333.09 345.27
• Acquisition Of Shalimar Productions
Total Expense 416.19 354.51 408.06 Ltd.
Profit/Loss Before Tax -63.85 -23.42 -55.85
Backward Integration
Chart Title
Indigo
JSW 110
125
• Raw Material (Titanium Dioxide) India’s
Tio2 expected to grow 4.2% CAGR with

Nerolac 3,29,000 MTPA by 2025

583
• Increase Purchase from Indian

Asian Paints
Company (Meghmani organics Ltd)
1700 MLPA
• Increase Plants of Manufacturing
• Now 3 Units All Over India (Jodhpur,
Kochi, Tamil Nadu)
Asian Paints Nerolac JSW Indigo • Increase Plants to compete Grasim

Grasim (Aditya Birla Group) with investment

Announced plans to invest Rs 10,000 crore to set up 6 from 110 MLPA to 600 MLPA till 2026
manufacturing plants till 4th qtr 2024 for 1332 MLPA
THANK YOU