Industrial Analysis

Paint Industry
 The domestic paint industry is estimated to be a Rs 500 billion industry with
the decorative paint category constituting almost 75% of this market. The
decorative paint market includes multiple categories depending on the nature
of the surface like exterior wall paints, interior wall paints, wood finishes,
enamels as well as ancillary products like primers, putties, etc.
 The industrial paint category constitutes the balance 25% of the paint market
and includes a broad array of segments like automotive coatings, marine
coatings, packaging coatings, powder coatings, protective coatings and other
general industrial coatings.
 Under the make in India initiative, the government of India aims to increase
the share of the manufacturing sector to the gross domestic product (GDP) to
25% buy 2022 from existing 16%.
 Manufacturing sector has the potential to reach US$ 1 trillion by 2025 and
India is expected to rank amongst the three growth economies and
manufacturing destinations of the world by 2020. These factors expected to
significantly boost industrial paint consumption.

Growth of Paint industry in India:

 In recent times, growth in India’s paint sector has been an outlier in the overall
domestic consumer space. The industry has been witnessing a gradual shift in terms
of consumer preferences from the traditional whitewash to better quality paints.
 Besides, it is also witnessing healthy competitive environment, where players are
applying different strategies to tap the growing demand in the market for a larger
regional share.
 Additionally, rise in disposable income of the average middle class, urbanization,
growing rural market, shortening of repainting cycle, upgradation, increase in sale of
premium-end products and launch of many innovative products are the major
drivers that are pushing the growth of the organized paint industry.
 The domestic paint industry has grown at a rate of 10.4% from FY08, when the
market was valued at Rs159bn, to FY20, when the market size reached ~Rs520bn.
Over the years, the decorative paint segment (market share of ~75-80%) has grown
at a CAGR of 11.4% against the industrial segment (market share of ~20-25%), which
has grown at a CAGR of 7.9%.
 Within the industry, the organized sector has been commanding ~70% market share
and the balance 30% is accounted by the unorganized sector. Till the first half of
 2010s, the unorganized sector had ~35% market share, but with demonetisation and
implementation of GST, the organized players have been able to capture market
share from the unorganized players.

Fig 2: Indian paint industry has grown at 10.4% CAGR over 12 years

Prospects:

 In FY19, the paint industry has expanded at the rate of 12% in volume terms
and about 15% in value terms. Going forward, the growth shall be dependent
on a number of factors like disposable income in the hands of public,
urbanisation, economic development, regular monsoons, raw material prices,
growth in the infrastructure and recovery in the real estate & automobile
segment.
 The market for Indian paints and coatings is expected to expand at a CAGR of
8.56% during the forecast period of 2019 – 2024. Growing demand from the
construction industry, coupled with rising infrastructure activities, is driving
the demand for the market studied.
 Decorative paints segment is expected to witness higher growth going
forward. The fiscal incentives given by the government to the housing sector
have immensely benefited the housing sector. This will benefit key players in
the long term.
A
Company Profile:
 Asian Paints is a 78-year-old company with operations across 15 counties. It is the
largest paint company in India and also Asia’s third-largest paint company.
 Asian Paints Limited's headquarters is in Mumbai, Maharashtra. Asian Paints Limited
has a revenue of $2.5B, and 6,750 employees. As of August 2019, Asian Paints
Limited has 1.9M fans on Facebook and 98.1K followers on Twitter.
 It is India’s largest paint company commanding over 40% of the overall domestic
paint industry and ~55% in organized domestic decorative paint segment. The
company is present in 15 countries and has 26 manufacturing facilities across the
globe.
 It not only manufactures a wide range of paints for decorative and industrial use, but
also offers end-to-end painting and designing services, colour and decor consultancy,
waterproofing solutions and much more.
 During FY20, the company generated Rs202bn in revenue with ~84% contribution
coming from its domestic decorative business.
 In the Industrial coatings space, Asian Paints operates through two strategic 50:50
joint ventures with PPG Inc., USA, a global leader in coatings. The first JV - ‘PPG Asian
Paints Pvt Ltd’, services the increasing requirements of the Indian automotive
coatings market. This JV also manufactures packaging and marine coatings. The
second JV - ‘Asian Paints PPG Pvt Ltd’ services the protective, industrial powder and
light industrial coatings markets in India.

Offerings:
 Products
 Paints
 Chemicals
 Wall coverings
 Textures Painting aid
 Waterproofing solutions
 Wall stickers
 Mechanised tools
 Kitchen fittings
 Bath fittings and sanitaryware
 Sanitizers and surface disinfectants
 Adhesives
 Kitchens & Wardrobes
Services
 Home Painting Services
 Interior Design Services
 Experience Retail Stores
 Colour Consultancy
 Projects
 Sanitization services

Resilient Existence:
 #1 Paint company in India
 3rd largest Paint company in Asia
 9th largest Paint company in the world
 50+ years of leadership in India

End to End Solutions:

1. End-to-end canvas
a. PAINTING SOLUTIONS
It’s palette of products and services is enriched by rich industry experience
and expertise in helping the customers own best-in-class living spaces.
b. INTERIOR DESIGN SOLUTIONS
Its experts analyse the requirements of customers, understand their budgets,
and offer them suggestions to spruce up their living spaces.
c. LARGE PAINTING PROJECTS
It offers a host of services that cater to the requirements of large-scale
painting assignments. Some of the projects it undertakes include co-
operative housing societies, new buildings, institutes, and government
organisations.
• Painting solutions
• Waterproofing solutions
 2. In-person Experience
a. AP HOMES
AP Homes is a one-stop shop for all your home décor needs. It offers multi-
category integrated décor stores, offering products and solutions across
categories of paints, wallpapers, modular kitchens, bath fittings,
sanitaryware, furnishings and light fittings, among others.
b. COLOUR BY ASIANPAINTS
Customers here can experience colour in ways they had never imagined. One
can browse through the exclusive range of finishes and create their dream
home with the state-of-the-art technology.
c. COLOUR IDEAS STORES
The Colour Ideas stores provide bespoke customer experience with end-to-
end wall décor solutions, from colour personalisation to safe painting and
furnishings.
d. COLOUR WORLD
It has a network of 50,500+ Colour World stores across the length and
breadth of India. These stores are equipped with proprietary colour tinting
system, enabling them to offer widest range of colour options.

3. Digital Connect:
a. ONLINE COLOUR CONSULTANCY
Ezy colour consultancy offers assistance from colour experts who answer
queries regarding colour combinations with the help of visualisation
technology and digital preview in just a few clicks. Additionally, a colour
prescription and tips on suitable décor elements also facilitate decision-
making.
b. BEAUTIFULHOMES.COM
‘Beautiful Homes’ is our online décor platform that offers innovative design
ideas suited for myriad personal styles. It is a comprehensive guidebook for
décor requirements and advice to guide customers every step of the way in
their quest for the perfect living space.
c. MOBILE APPLICATION:
COLOUR WITH ASIAN PAINTS
Colour with Asian Paints is our colour visualizer and wall painting application
that lets customers try our wide range of wall colours, textures and wallpaper
designs at the click of a button. It is possible to take a photograph of the wall
one needs painted following which customers can pick from a range of colour
combinations.

Business Continuity during COVID 19

 All the operations were disrupted since mid-March 2020 and the Company saw
partial resumption since early May 2020. The Company has now been able to open
all manufacturing plants after taking requisite government permissions.
 Facilities that have opened across the Company have been sanitised so that people
are safe and secure. All safety protocols of temperature sensing, wearing of safety
 gears (masks, goggles and face shields), social distancing, sanitizing and washing
hands are being adhered to stringently.
 The Company has also launched a ‘Safe Painting’ campaign for ensuring the safety of
painters and offering assurance to customers for a safe painting experience at home.
The campaign assures customers that the painters are safe to enter their homes and
provide a great painting experience.
 This whole area of ‘Safe Painting’ gets further strengthened with the introduction of
the hand sanitizers and surface disinfectants, and instils confidence among
customers. The Company has launched Viroprotek range of hand sanitizers and
surface disinfectants to support the government in its efforts to tackle the spread of
the pandemic and address the huge need of hand and surface sanitization products
in these testing times.

Consolidated Revenue breakdown as on FY20

Main competitors:

Product Offerings by the Companies:

ASIAN Paints Berger Paints Kansai Nerolac
 Interior Wall Coating  Interior Wall  Interior Wall
 Exterior Wall Coating Coating Coating
 Colours and Textures  Exterior Wall  Exterior Wall
 Waterproofing Coating Coating
Solutions  Exterior Textures  Wood Coating
 Wood and Metal  Metal Finishes  Metal Enamel
Paints  Wood & Glass Paints
 Adhesives Finishes  Paints Ancillary
 Waterproofing  Adhesives
Solutions  Industrial Coating
 Undercoats  Floor Coating
 Powder Coating
 Coil Coating
 Automotive Paints

Comparison:
Basis ASIAN Paints Berger Paints Kansai Nerolac
Market share It is India’s largest paint It is India’s second It is the leader in
company commanding largest paint company industrial paints in
over 40% of the overall commanding ~12% India (~45% of top line)
domestic paint industry market share of the within which it is the
and ~55% in domestic overall paint industry leader in automotive
decorative paint and over 20% market coatings, general
industry. share of the domestic industrial coatings and
decorative paints powder coatings. In
segment. On a decorative paints, KNPL
consolidated basis, is the third largest
decorative paint player in India (~55% of
segment contributes a revenue).
bit over ~80% to the
company’s revenue,
and the balance 20% is
contributed by
industrial paints
Market Segment It led the decorative It is 2nd in the It led the industrial
market segment decorative market segment
segment
Market It has the It has the 2nd highest It has the 3rd highest
Capitalization highest market market capitalization market capitalization
capitalization 
% Rise in Share 21.15% 52.86% 6.02%
Prices of Paint
Stocks for Last 1-
year: