Asian Paints Ltd. |
ASIAN
PAINTS LTD. |
SALES |
GROSS PROFIT |
EBIT |
PAT |
DIVIDEND |
EPA |
MKTCAP |
CFO |
FCF |
NETWORTH |
TOTAL RETURNS |
9 YR CAGR |
20.72% |
19.24% |
24.39% |
27.13% |
21.36% |
31.05% |
34.37% |
16.19% |
16.19% |
22.86% |
34.10% |
5 YR CAGR |
21.49% |
18.69% |
22.66% |
24.68% |
23.86% |
21.07% |
32.42% |
13.52% |
13.52% |
29.33% |
32.29% |
3 YR CAGR |
20.01% |
13.62% |
11.01% |
8.78% |
21.72% |
3.78% |
44.77% |
-11.84% |
-11.84% |
26.78% |
44.38% |
1 YR GROWTH |
25.06% |
22.70% |
16.74% |
17.25% |
25.00% |
1.12% |
23.22% |
8.55% |
8.55% |
25.65% |
23.24% |
|
ASIAN
PAINTS LTD. |
31-03-2012 |
31-03-2011 |
31-03-2010 |
31-03-2009 |
31-03-2008 |
31-03-2007 |
31-03-2006 |
31-03-2005 |
31-03-2004 |
Financial
Leverage |
1.17 |
1.16 |
1.19 |
1.31 |
1.32 |
1.45 |
1.47 |
1.50 |
1.45 |
Long term
debt/Earning |
0.34 |
0.28 |
0.27 |
0.75 |
0.63 |
1.02 |
1.14 |
1.27 |
1.17 |
Current
liablility/Earning |
2.38 |
2.19 |
1.83 |
2.60 |
2.49 |
2.50 |
2.81 |
3.12 |
0.00 |
Total
liability/Earning |
2.72 |
2.47 |
2.11 |
3.35 |
3.12 |
3.53 |
3.96 |
4.38 |
4.44 |
Debt/Equity |
0.12 |
0.11 |
0.13 |
0.25 |
0.26 |
0.37 |
0.38 |
0.39 |
0.32 |
Interest
Coverage |
39.15 |
51.18 |
32.98 |
20.48 |
25.02 |
18.98 |
31.63 |
27.63 |
17.15 |
Working
Capital/Sales |
7.20% |
2.85% |
1.13% |
8.12% |
5.59% |
9.88% |
9.08% |
9.62% |
6.07% |
Debtor Days |
16 |
16 |
17 |
18 |
19 |
20 |
20 |
20 |
23 |
Inventory Days |
106 |
115 |
99 |
86 |
105 |
102 |
99 |
112 |
80 |
Inventory
turnover |
3.43 |
3.16 |
3.67 |
4.25 |
3.47 |
3.57 |
3.68 |
3.27 |
4.54 |
Cash In/Cash
Out Ratio |
0.40 |
0.21 |
0.23 |
0.42 |
0.29 |
0.40 |
0.36 |
0.31 |
0.34 |
Current Ratio |
0.94 |
0.79 |
0.73 |
0.95 |
0.82 |
1.01 |
0.94 |
0.92 |
0.79 |
CFO/PAT |
0.84 |
0.90 |
1.27 |
0.98 |
1.22 |
0.92 |
0.84 |
0.64 |
1.72 |
|
Gross
Margin |
51.34% |
52.33% |
57.29% |
53.99% |
56.36% |
54.85% |
54.88% |
53.16% |
56.66% |
EBITDA Margin |
16.15% |
17.41% |
18.66% |
12.88% |
15.66% |
13.46% |
13.96% |
14.06% |
14.59% |
Net Margin |
9.89% |
10.54% |
12.03% |
6.93% |
8.91% |
7.32% |
7.02% |
6.79% |
6.53% |
Free Cash
Flow/Sales |
8.26% |
9.52% |
15.31% |
6.78% |
10.84% |
6.72% |
5.91% |
4.33% |
11.22% |
|
Capital
Turns |
3.49 |
4.97 |
4.93 |
3.83 |
4.50 |
4.11 |
3.85 |
3.47 |
3.33 |
Fixed Asset
Turns |
7.69 |
6.11 |
7.63 |
6.65 |
7.38 |
7.29 |
6.53 |
5.37 |
4.20 |
Total Asset
Turns |
3.11 |
3.16 |
3.42 |
3.64 |
3.54 |
3.41 |
3.19 |
3.01 |
2.89 |
RoA |
30.70% |
33.31% |
41.14% |
25.21% |
31.53% |
24.96% |
22.36% |
20.44% |
18.85% |
RoE |
35.97% |
38.55% |
48.87% |
33.07% |
41.65% |
36.13% |
32.83% |
30.69% |
27.36% |
RoCE |
25.61% |
27.76% |
33.24% |
24.57% |
29.69% |
24.70% |
23.55% |
22.06% |
21.22% |
RoIC |
36.52% |
55.20% |
58.38% |
30.10% |
44.05% |
31.81% |
29.28% |
25.60% |
24.12% |
RoIncNW(1yr) |
13.07% |
0.94% |
91.95% |
-2.82% |
51.55% |
39.31% |
26.01% |
46.09% |
|
RoIncNW(3yr) |
11.40% |
42.31% |
67.43% |
23.61% |
59.43% |
44.83% |
45.97% |
|
|
RoIncNW(10yr) |
49.84% |
|
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Growth Rates: The sales growth has been flat and near 20% corridor,except in the current year in which the company has posted an excellent growth of 25%.The profits however been deceleratingbeginningwith gross profit indicating increase in raw material prices,The 3Yrs EBIT and PAT growth rates have declined significantly.However the currentgrowthrate hint that the company is back on growth trajectory.
Solvency & Liquidity: The company's solvency and liquidity condition has improved gradually over the years.
Efficiency:The efficiency as a whole seen by net WC/Sales has marginallydeteriorated over the years,the current increase in net working capital is huge.The company now takes approx a month more to turn inventory into sales than it took a decade ago.
Cash backing:The company's earnings are adequately backed by cash.
Margins,Turnover & Returns:The Gross margin has dropped by little over 5 percentage points over the last 10 year period following anerratic trend.The EBIDTA and Net margin have improved over the years,but both have followed a declining trend in the last 3 years.The fixed asset turnover has improved steadily declining just once in FY09 in the last decade.The capital turnover has improved marginally over last 10 years,this too has followed an uptrend and has declined twice in 10 years,once in FY09 and again in the current year.The return ratios have improved over the 10 year period barring decline in FY09 and last two years.
Distribution Network:The company'sgreatestcompetitive advantageis itsamazing distribution network consisting of 6 regional distributors,80 sales locations,27000 dealers having 21000 tintingmachines.On an average the company adds 1,000 dealers in a year, helping it to grow further in terms ofreach in the country.The company has strong presence in Tier 2 and Tier 3 cities and has witnessed stable growth in thesetowns.
(Tintingmachine-With the use of tinting machines, adealer can tint over 1,800 shades onthe spot and provide it to thecustomer as per his/her requirement.This helps theDealer avoid stocking differentvarieties of paints in various packsizes,thereby reducing his inventory)
By introducing a concept of tinting machine, the company has createdanbarrier toentry, as economically it is not viable for a dealer to have two tinting machines from differentcompanies.What makes the company's distribution network even more powerful is the fact that its second largest competitor has adistribution network of 15000 dealers,which is almost half of what Asian Paints has! :)
Unique raw material Source:Asian Paints has achieved backward integration through in-house production of twoimportant raw materials, pentaerythritol and phthalic anhydride.It is the only paint company in India to have this backwardintegrationand this has helped it save a great deal of money and hence in acompetitive advantage.
Types of Businesses: The company is thedominant player in the Indian paint industry.It operates in two segments,they are as follows:
1)decorative-Decorative Paints business contributes around 81% to total revenue and 94% to total paint revenue.The decorative paint segment constitutes 75% of the Indian paint market.This segment is pricesensitive and is a higher margin business as compared to industrial segment.About 65% of the demand for decorative paints stems from repainting, mainly after the monsoon rainsand before the festive season, while the remaining is constituted from new housing. Rapid urbanisation,easing housing finance and rise in disposable income are the drivers of growth in the decorative paintssegment.
2)Industrial-It contributes 6% to total revenue and includes automotive and protective segment.
Automotive segment-The growth of this segment is highly correlated with the growth in Auto Industry.The automotive coatings market is bifurcated into OEMs and auto refinishes and is one of the fastestgrowing sub sectors in the Indian Industrial paint segment.With Major automobile companiessetting-up manufacturing operations in India ,Vibrant demand for new automobiles and second-handused vehicle market represents significant opportunities.It is most probably the future growth engine.
Expansion of Production :The current installed capacity stood at 644,000 tons, which rose by 50,000MT (expansion atRohtak). Capacity is expected to increase to over 1.2mn MT by FY15, which will include thenew plant of 0.4mn tons at Khandala; the first phase of 0.3mn tons of this plant would becommissioned by the end of FY13.The company is also makinginvestments in modernizing the field operations by opening new depots andautomating the operations at the field locations.