Sirca Paints India Limited

sameernics · February 11, 2020, 4:44pm

Just attaching the investor presentation post Q3 results for the benefit of all.
SIRCA_Q3 presentation.pdf (637.1 KB)

sameernics · February 12, 2020, 5:03am

Certain things that will happen in case of Sirca Paints India in the days to come.

Their pan India penetration for sales and distribution will drive incremental sales
Their new own manufacturing facilities in India for paints, economical coatings and some new products will drive incremental sales
Their exclusive distribution rights for 15 years will drive incremental sales in India, Nepal, Bangladesh, Sri Lanka and Dubai.
Revival in the economy and consumer spending will be icing on the cake.

Any views ?

neil991 · February 12, 2020, 11:38am

What really is good is the increase in number of distributors. Its risen from 500 to 1500 in the blink of an eye. They should touch 3000 distributors very soon.

They also have got rights for Dubai which is positive.

sameernics · February 12, 2020, 3:46pm

Yes, to be precise just in a matter of 1 quarter (i.e. between Q2 to Q3) they have done following which is very commendable.

Distributor number has increased substantially from 555+ to 1477.
Added 28 additional sales/marketing force during the quarter and the total team stands at 143.
During the quarter additional stock depots set up in Kerala and Kolkata.
Launched an additional Sirca studio in Dehradun and total Studio count stands at 14 across several states.
For better brand visibility, participated in promotional events at Amritsar, Kochi, Pune and also advertising in movie theatres.

For the first time i was able to get a snap of their new state of the art Indian facility (which was built according to Italian (Sirca SPA Italy) standards).

Anand6 · February 13, 2020, 12:46pm

Global wood coating market is around 8.3 B $. Sirca Italy’s sales around 13-14 cr $, representing < 2% market share !!
For an innovative company having global presence, doesn’t it look small ?
Was just going through global wood coating market and found this.

Disc: Invested
Source: Sirca Paints India Is Ready For The Next Leg Of Growth

sameernics · February 13, 2020, 4:08pm

Hi Anand,

Your figures of Sirca Italy seems a bit old and it sounds based on an old magzter article. Based on my sources (Sirca LinkedIn), their sales are over $15 cr (which is roughly over INR 1082 cr).

Anand6 · February 13, 2020, 4:14pm

Even if 15 cr $, its <2% of global market share. Not getting negative on sirca india, but a point to keep in mind.

sameernics · February 13, 2020, 4:25pm

I believe, global wood coatings market growing at CAGR 6.3% sounds enough opportunity for leading players. Indian wood coatings market growing in double digits by volume and value and Sirca India’s growth rate (@ 25-27%) beating the industry growth rate is commendable.

Znilesh · February 13, 2020, 4:49pm

Hi,
Here I can see that Sirca’s growth story mostly depend on exclusive between Sirca italy.

I am wondering about Sirca Italy.
Is there any competitor for Sirca Italy who are providing same or better product?
If so Such competitor can enter into india and on the same day valuation for Sirca India will start come down.

Could some one validate my thought/threat?

rk1771 · February 13, 2020, 4:59pm

ICA is already there with Pidilite. Asian Paints have Emporio PU. It is not that there is no competition. It is bound to be there. There are a few tailwinds-
(i) Wooden furniture has become a luxury item, and people are willing to pay much more for its finishing.
(ii) Sirca has first mover advantage, for its presence in Indian market for last more than a decade exclusively in wooden paints.
(iii) Starting a manufacturing facility and pan India distribution is likely to give a jump to the topline.
(iv) It is also a story of growth of organized players in market largely dominated by unorganized players.

Anand6 · February 13, 2020, 5:20pm

Rajesh,
Everything is positive about sirca india. 100% positive, thats why I have invested.
I was just wondering why sirca Italy (the origin of brand , decades old co, with quality products, just 300 employees!!) lagging behind in gaining market share.

sameernics · February 13, 2020, 5:57pm

Just building on to Rajesh’s points…I am not sure ICA Pidilite or Asian Paints have any aggressive plans or much presence in Nepal, Sri Lanka, Bangladesh and Dubai markets. Let us know please.

rk1771 · February 14, 2020, 2:48am

Actually a leader cannot be aggressive in an emerging small niche. We are looking at 150 crores topline for Sirca, and very happy about it. For an Asian Paint and Pidilite, it is a very small increment in their topline.

Znilesh · February 14, 2020, 4:30am

Thanks nyce point you have made.
Also I see berger Paint is in this sector nearly same product as like Sirca Melamine, PU, since 2018,
But didn’t disclosed growth in wooden segment.
https://www.bergerpaints.com/products/wood-finishes/

I am not sure about quality.

neil991 · February 14, 2020, 12:08pm

Asian Paints also has a tie up with Italian brand.
Pidilite took over ICA which is also a foreign brand I suppose. Other people have tried and failed.
Sirca has built up its brand in India over many years. Wont be easy for anyone to come in and disrupt this if Asian Paints is not able to do much.

sameernics · February 14, 2020, 2:45pm

Sirca definitely has a solid footing in North India with their Italian Quality over 15 years. North Indian consumers are quite happy and they had preferred Sirca over Asian Paints and Pidilite. I am sure same success story would be replicated at pan India level. Their strategy seems to be very clear by onboarding Indian manufactured Italian quality economical coating products + Wall paints to compete with biggies in south and other states.

sameernics · February 18, 2020, 8:05am

As per today’s exchange filing, board meeting is scheduled on 28th February 2020 to consider and declare interim divided for FY 2019-20. The record date is fixed as 13th March 2020.

It is good to see since IPO in 2018, it has already given 1:2 bonus and a maiden dividend in 2019. Thus the Sirca has become a regular dividend paying company, which is very important for the sentiments of shareholders.

melwinambatt · February 19, 2020, 6:09am

Hi Sameer, I could not find any data regarding the bonus and dividend they gave. When was that and what was the price of the stock before bonus was given?

sameernics · February 19, 2020, 4:14pm

Hi Melwin,

You will find all corporate announcements in NSE site. Anyways, below NSE link of Sirca will give you all the announcements till date. Just select “more than 3 months” under drop down in “announcement period” tab. Hope this helps. Cheers.

https://www1.nseindia.com/corporates/corporateHome.html?id=eqCorpAnnouncements&radio_btn=company&param=SIRCA

melwinambatt · February 20, 2020, 6:18am

Thanks Sameer, Today while I browsed thru twitter and one guy pointed out a redflag as there are related party transactions. Is this true,? or how can we find it in nse site, I know bseindia is more user friendly for these matters