Asian PaintsAsian Paints is an Indian paint company headquartered in Mumbai,India. Asian Paints is India’s largest paint company and Asia’s third largestpaint company, with a turnover of Rs 77.06 billion. It is one of the largestpaint corporations that operates in 17 countries and has 23 paintmanufacturing facilities in the world servicing consumers in over 65countries. Besides Asian Paints, the group operates around the worldthrough its subsidiaries Berger International Limited, Apco Coatings, SCIBPaints and Tubman’s.HistoryOrigins:Over the course of 25 years Asian Paints has become a corporate forceand Indias leading paints company. Driven by its strong consumer-focusand innovative spirit, the company has been the market leader in paintssince 1968. Today it is double the size of any other paint company in India.Asian Paints manufactures a wide range of paints for Decorative andIndustrial use.
1st February, 1942:Armed with little knowledge and great determination, Champaklal H.Choksey, Chimanlal N. Choksi, Suryakant C. Dani and Arvind R. Vakil gettogether to manufacture paint in a garage on Foras Road, Bombay. Theyname their company The Asian Oil & Paint Company, a name that theypicked randomly from a telephone directory.1945:Asian Paints touches a turnover of Rs. 3,50,000, with an innovativemarketing strategy "to reach consumers in the remotest corners of thecountry with small packs."Asian Paints mascot, Gattu, the mischievous kid, is born.1957 – 66:The family-owned company makes the transition to a professionallymanaged organisation. British company Balmer Lawrie rejects the productsof a giant British paint company in favour of Asian Paints. Asian Paintsembarks on an ambitious grassroots marketing campaign, partnering withthousands of dealers in small towns all over India.1967:Asian Paints emerges as Indias leading paint company ahead of anyinternational competition.Today:Asian Paints becomes the 10th largest decorative paint company in theworld Asian Paints is more than twice the size of its nearest competitor It isone of the most admired companies in India Present in 22 countries with 27manufacturing locations, over 2500 SKUs, Integrated SAP - ERP & i2 -SCM solution Rated Best Employer by BT-Hewitt survey, 2000 Bluest ofthe blue chips by Hindu Business Line; Most admired company to work forby ET-BT survey, 2000 On the recommendations of Booz, Allen andHamilton, Asian Paints restructured itself into Growth, Decorative andInternational business units and adopted SCM and ERP technology Asian
Paints aims to bcome the 5th largest decorative paint company in theworld.Major Products and ServicesAsian Paints manufactures and markets industrial and decorative coatings.The companys key products and brands include the following:Products:Decorative paints:Interior wall paints Exterior wall paints Wood surface paints Metals surfacepaintsIndustrial coatings:Protective coatings Floor coatings Road markingsAutomotive:Body coatings Plastic coatingsAncillaries:Brands:Ace & Apex Apcolite Apex Apex Ultima Asian Paints Colour Next PremiumGloss Enamel Royale Royale Play Touchwood Tractor Emulsion Utsav.Forbes listingForbes Global magazine USA ranked Asian Paints among the 200 BestSmall Companies in the World for 2002 and 2003 and presented the Bestunder a Billion award, to the company. Asian Paints is the only paintcompany in the world to receive this recognition. One of the countrysleading business magazines "Business Today" in Feb 2001 ranked AsianPaints as the Ninth Best Employer. It has been recognized by "EconomicTimes" as well. Forbes has also ranked Asian Paints among the Best undera company in Asia In 2005, 06 and 07.
Financial DealsAsian Paints has acquired 30% stake in Dutch Boy Philippines from BergerInternational Limited (BIL), an indirect subsidiary of Asian Paints. AsianPaints executed a conditional stock purchase agreement relating to thesale of 427,000 shares of Dutch Boy Philippines, which ceases to be anassociated company of BIL. Asian Paints, Ltd. (APL) has entered into a50:50 new joint venture agreement with PPG Industries, Inc. (PPG), a US-based provider of paints, coatings and specialty products, to accelerate thegrowth of non-decorative coatings business in India.This is the second joint venture between APL and PPG. They currentlyhave a 50-50 joint venture named Asian PPG Industries Ltd (APPG).RevenueThe 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 companys 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 fiscal2011, an increase of 0.9% over 2010.International operationsAsian Paints operates in 17 countries across the world. It hasmanufacturing facilities in each of these countries and is the largest paintcompany in eleven of these markets. Asian Paints operates in five regionsacross the world viz. South Asia, Southeast Asia, South Pacific, MiddleEast and Caribbean region through the five corporate brands viz. AsianPaints, Berger International, SCIB Paints, Apco Coatings and Tubman’s.The countries that Asian Paints has presence are as follows:Asian Paints in South Asia (India, Bangladesh, Nepal and Sri Lanka) SCIBPaints 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)Tubman’s in South Pacific (Fiji and Samoa) The company has a dedicatedGroup R&D Centre in India and has been one of the pioneering companies
in India for effectively harnessing Information Technology solutions tomaximize efficiency in operations.Group Subsidiaries1) Apco Coatings is a subsidiary of Asian Paints in the South Pacificislands. Asian Paints operates in Australia, Fiji, Tonga, Solomon Islandsand Vanuatu under the brand name of Apco Coatings.APCO COATINGS2) Asian Paints Industrial Coatings Limited has been set up to cater to thepowder coatings market which is one of the fastest growing segments inthe industrial coatings market. ASIAN PAINTS.3) In 1994, Berger units were brought under the single umbrella of theholding company Berger International Limited (BIL) with headquarters inSingapore, which was also listed on the Singapore stock exchange. InNovember 2002, BIL became a part of the Asian Paints Group. Incidentally,Berger Paints Jamaica Limited, which is listed on the Jamaican stockexchange, is amongst the top ten companies in the country in terms ofmarket capitalisation. In the Middle East too Berger is a well-respectedbrand. It is the largest paint company in Bahrain. Using its state-of-the-artmanufacturing facilities there, and in United Arab Emirates, it exports tocountries in the Commonwealth of Independent States, Gulf CooperationCouncil and Africa. In South East Asia Berger enjoys a fine reputation andhas operations in Singapore and Thailand. BERGER4) SCIB Paints ranks amongst the top five paint companies inEgypt. SCIBPAINTSCampaignsLate Nineties:During the late nineties the brand had to be reinvented. Because no longerfestivities formed an important part in ones life. Since many brands wentafter festival seasons, the positioning platform has become cluttered. Moreover the consumer buying behavior has changed. The category wasbecoming less seasonal. People started associating more importance tohome decor and interiors. The choice of color became a high involvement
decision. From a low involvement category, paint was increasinglybecoming a high involvement category.Logo Change: The brand also went in a brand overhaul. The logo was changed to acontemporary up market one designed by Enterprise IG based inSingapore. The logo/design was to convey self expression, sophisticationand Technology. Thus came the birth of a wonderful positioning strategycreated by O&M. The insight was that the brand is about people andhomes and homes reflect the people living in it. Hence " Har Ghar KuchKehta Hai" translated to " Every Home has a story to tell". This campaign isa perfect example of a brand laddering up and connecting to a higher levelin the mind of the customer. The campaigns reinforced the brand as apremium emotional brand. Along with the campaign Asian Paints also ranparallel ads for its sub brands. Saif Ali Khan endorsed the premium brandRoyale .For Apex Ultima, the campaign was highly localized and wasdifferent in different market.
Balance sheet Mar 11 Mar 10 Mar 09 Mar 08 Mar 07Sources of fundsOwners fundEquity share capital 95.92 95.92 95.92 95.92 95.92Share application money - - - - -Preference share capital - - - - -Reserves & surplus 1,879.40 1,461.30 998.55 832.58 648.16Loan fundsSecured loans 23.43 25.59 24.59 36.70 66.90Unsecured loans 40.70 40.70 40.70 40.70 40.70Total 2,039.45 1,623.51 1,159.76 1,005.90 851.68Uses of fundsFixed assetsGross block 1,611.22 1,194.39 1,116.93 937.89 806.20Less : revaluation reserve - - - - -Less : accumulated depreciation 554.03 486.93 494.02 509.06 471.29Net block 1,057.19 707.46 622.91 428.83 334.91Capital work-in-progress 67.32 380.72 164.64 136.25 16.31Investments 1,034.76 703.69 234.77 422.88 334.39Net current assetsCurrent assets, loans & advances 1,729.79 1,364.85 1,172.36 1,035.22 869.21Less : current liabilities & provisions 1,849.61 1,533.21 1,034.92 1,017.28 703.15Total net current assets -119.82 -168.36 137.44 17.94 166.06Miscellaneous expenses not written - - - - -Total 2,039.45 1,623.51 1,159.76 1,005.90 851.68Notes:Book value of unquoted investments 632.33 155.31 157.39 345.50 257.01Market value of quoted investments 568.57 186.79 178.76 254.26 183.02Contingent liabilities 505.87 223.80 356.87 222.05 180.22Number of equity sharesoutstanding (Lacs) 959.20 959.20 959.20 959.20 959.20
Asian Paints Report CardAttribute Value DateMarket Capital (Rs.cr) 26,605.81PE ratio 34.08 29/04/2011EPS (Rs) 81.40 Mar 2010Sales (Rs crore) 5,776 31/03/2010Face Value (Rs) 10Net profit margin (%) 12.99 31/03/2010Reserves (Rs.cr) 1,461.30Book value 162.35Dividend yield 0.97Asian Paints Related IndicesIndices Price Change %ChangeBSE100 7,942.77 14.83 0.19BSE200 1,853.46 2.57 0.14BSE500 5,785.83 7.15 0.12CNX 100 4,485.90 8.55 0.19CNX MIDCAP 6,095.50 -16.35 -0.27CNX NIFTY JUNIOR 8,312.10 -21.00 -0.25Asian Paints Stock ReturnsTime Span Price Change %ChangeToday 2,593.10 -1.85 -0.07Week 2,666.45 -71.50 -2.68Month 2,881.00 -286.05 -9.92Three Months 3,149.40 -554.45 -17.60Six Months 3,308.30 -713.35 -21.56One Year 2,819.75 -224.80 -7.97Two Years 1765.25 829.70 47.00Three Years 871.90 1,723.05 197.62Five Years 733.55 1,861.40 253.75
Ratios Mar 11 Mar 10 Mar 09 Mar 08 Mar 07Per share ratiosAdjusted EPS (Rs) 80.11 69.47 38.63 39.25 27.93Adjusted cash EPS (Rs) 89.96 75.80 44.59 43.82 32.66Reported EPS (Rs) 80.81 80.74 37.78 39.12 28.36Reported cash EPS (Rs) 90.66 87.08 43.74 43.68 33.10Dividend per share 32.00 27.00 17.50 17.00 13.00Operating profit per share (Rs) 121.07 107.69 61.92 59.37 45.48Book value (excl rev res) per share (Rs) 205.93 162.35 114.10 96.80 77.57Book value (incl rev res) per share (Rs.) 205.93 162.35 114.10 96.80 77.57Net operating income per share (Rs) 688.70 559.61 470.20 374.85 307.90Free reserves per share (Rs) 195.88 152.29 104.05 86.75 67.52Profitability ratiosOperating margin (%) 17.57 19.24 13.16 15.83 14.77Gross profit margin (%) 16.14 18.11 11.90 14.62 13.23Net profit margin (%) 11.61 14.29 7.97 10.28 9.11Adjusted cash margin (%) 12.92 13.42 9.40 11.52 10.49Adjusted return on net worth (%) 38.90 42.79 33.85 40.55 35.99Reported return on net worth (%) 39.24 49.73 33.10 40.40 36.56Return on long term funds (%) 55.79 62.95 49.35 58.11 52.70Leverage ratiosLong term debt / Equity 0.03 0.04 0.05 0.06 0.07Total debt/equity 0.03 0.04 0.05 0.08 0.14Owners fund as % of total source 96.85 95.91 94.37 92.30 87.36Fixed assets turnover ratio 4.25 4.68 4.17 3.97 3.81Liquidity ratiosCurrent ratio 0.93 0.89 1.13 1.02 1.24Current ratio (inc. st loans) 0.93 0.88 1.13 0.99 1.09Quick ratio 0.34 0.37 0.58 0.47 0.59Inventory turnover ratio 7.08 7.95 9.80 8.03 8.27Payout ratiosDividend payout ratio (net profit) 46.06 39.03 54.19 50.84 52.36
Mar 11 Mar 10 Mar 09 Mar 08 Mar 07Dividend payout ratio (cash profit) 41.05 36.19 46.81 45.53 44.87Earning retention ratio 53.54 54.64 47.00 49.34 46.82Cash earnings retention ratio 58.63 58.43 54.09 54.61 54.53Coverage ratiosAdjusted cash flow time total debt 0.07 0.09 0.15 0.18 0.34Financial charges coverage ratio 75.34 56.68 39.57 46.09 30.56Fin. charges cov.ratio (post tax) 54.22 44.73 27.37 32.13 21.70Component ratiosMaterial cost component (% earnings) 57.71 55.26 58.55 55.71 58.68Selling cost Component 17.08 17.51 17.27 17.98 17.23Exports as percent of total sales 0.66 0.64 0.64 0.67 0.81Import comp. in raw mat. consumed 23.86 20.74 19.49 21.04 17.96Long term assets / total Assets 0.54 0.56 0.45 0.47 0.42Bonus component in equity capital (%) 97.98 97.98 97.98 97.98 97.98