GRASIM
- To grow in paints through the Capacity route by investing 10000 Cr

- Paints is also a brand, distributor, tinting machine game

- Will be interesting to see if Grasim will be able to scale that

#Thread on #AsianPaints industry dominance

1/n
#FMCGisLife @CNBCTV18Live

CAPACITY

Asian Paints capacity at FY20 end was 1.73 Bn Litres

Grasim targets 1.3 Bn litres (~75% of Asian Paints)

Asian Paints Current Capacity > Berger + Kansai + Indigo + Shalimar

#FMCGisLife #AsianPaints #Grasim @CNBCTV18Live

2/n
REVENUE & MARKET SHARE

Asian Paints (No. 1) Qtrly Revenue = Berger Paints (No. 2) Annual Revenue

Asian Paints Annual Revenue is:
3.5X Berger
4.7X Kansai
10X Akzo Nobel
32X Indigo

They're already market leaders and Mgmnt said it increased >140 Bps in 2022

#FMCGisLife
3/n
MARGINS

Even at higher levels of RM Inflation and through all competitive intensity Asian Paints' Margins have been well above the industry

Last 12 months EBITDA Margin:
AsianPaint 17%
Berger 15%
Kansai 10%
AkzoNobel 14%
Indigo 15%
#FMCGisLife
4/n
NOW... THE MOST IMP THINGS

DISTRIBUTION
- Total Reach for Asian Paints now at 1.45 Lk retail points
- Asian Paints Dealers alone as big as the entire industry put together
- They also have 46000 Tinting Machines (equal to entire industry together)

#FMCGisLife #AsianPaints
5/n
TINTING MACHINE
- Dealers keeping a paint company's tinting machine is among the biggest barriers of entry
- Tinting machines cost 1-1.5 lk per machine and need space at a dealer's store
- 2 out of 3 Asian Paints dealers already have tinting machines

#FMCGisLife #Asianpaints
6/n
BRANDING

Asian Paints spends 900-1000 Cr on Advertising every year

For Ref: Indigo Paints’ FY22 Revenue alone was 906 Cr

We all know the brand recall from Gattu, to Wah Sunil Babu, to Har Ghar Kuchh Kehta Hai and the more recent - Abhi Toh Aur Chalega ads!

#FMCGisLife
7/n
ASIAN PAINTS
Would you believe it? Among the large paint players, it's actually the youngest company

Year of Establishment
Shalimar 1902
Nerolac 1920
Berger 1923
Akzo 1939
AsianPaint 1945

#FMCGisLife #AsianPaints #Grasim
8/n
VALUATIONS
- Quality comes at a steep price
- Co is among the most expensive stocks on all parameters
- Co's Market Cap at 10X FY22 sales
- MCap at 4X FY24e Entire Paint Industry

FY23e PE
Asian Paints 70X
Indigo 61X
Berger 50X
#FMCGisLife @CNBCTV18Live
9/9

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