In this article, we shall put the spotlight on the performance of Asian Paints Ltd. which is India\’s largest and Asia\’s third-largest paint manufacturing company.
Founded in the year 1942, today, the company, along with its subsidiaries, has operations in 22 countries across the world with distribution in 65 countries.
Now let’s look at the journey of Asian Paints in the last financial year.
FY21 Performance of Asian Paints
In FY21, Asian Paints gained 53%, as compared to the benchmark index Nifty which generated a return of 71%. Thus, we can imply that despite generating good returns in FY21, Asian Paints underperformed in comparison with the Nifty.
How Asian Paints Fared in FY21
Key positives for Asian Paints in FY21 at a glance:
- Company achieved strong growth in tier-2 and -3 markets as well as tier-1 cities in the premium paint’s category.
- Increased penetration in undercoats and waterproofing the retail category.
- Significant growth in its institutional business and from increased construction activity in second half of FY21.
- Gain in market share from the unregulated segment as well as regulated sector (especially in Tamil Nadu) in FY21.
The company’s revenue grew by 7.4% YoY from Rs 20,211 crores in FY20 to Rs 21,712 crores in FY21, whereas the company’s net profits grew by 15% YoY from Rs 2710 crores in FY20 to Rs 3,139 crores in FY21.
Future outlook for Asian Paints
India\’s per capita paint consumption of 3.3kg is among the lowest in the world. Rapid urbanization has led consumers to move up to emulsions from cement paints, lime paints and distempers.
Post implementation of GST there has been a steady shift in market from unorganized to organized players. Auxiliary segments such as water-proofing solutions, adhesives, putty, wood finishes, etc. are under-penetrated in the country.
With a massive presence across all price points, well-established distribution network and wide variety of offerings in paints, chemicals, adhesives and home décor, Asian Paints is not only likely to retain its leadership position in the market in the coming years but also chip away the market share of unorganized players in the paint industry.
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