Group 1

Pooja Patil Ari Bhonkar Sanjay Khandelwal Omkar Tawade Rahul Maurya

Industry Feasibility
AC Neilson has valued the Indian paint industry at Rs 29100 crores 71 per cent of it being decorative paints and the remaining being industrial. The size of the industry is 3.1 million tonnes with decorative paints being 2.4 million tonnes and industrial paints being 0.7 million tonnes. The per capita paint consumption has been estimated to be 2.57 kgs. India per capita consumption of paints is still abysmally low at 1.5Kg/annum compared to world average of 15Kg and 25Kg for US Regional Market Break up Major Players Asian Paints - Apcolite, Apex Ultima, Royale luxury Emulsion Kansai Nerolac - Beauty Distemper, Synthetic Enamel Berger Paints - Bison Distemper, Luxol, Bison Distemper ICI Paints - Dulax Velvet,Gloss Premium Enamel Unorganised sector

Competitor Analysis
Asian Paints Dominant player in Decorative Segment, Wide Geographical presence Asian Paints is having larger presence in South and West markets which contribute 60% to overall paint industry sales strong presence in fast growing rural markets which contributes 45% to its overall revenue. Unmatched distribution network a dealers network of 27,000 dealers give Asian paints high competitive advantage and positioning is well established. Berger paints Margin expansion, Benefits from high Industrial growth, Capacity addition plans Financial overview ICI Paints India(DULUX) Strong presence in premium market segment, Continuous R&Ds with international facilities

Current market scenario

Growth rate : CAGR of around 15% in FY12-15E with organized players - 65% & unorganized players 35%, in terms of value Reasons for Growth - Increasing level of income and education, urbanization, penetration in the rural markets, Increasing share of organized sector With India moving towards becoming a developed economy, the decorative to industrial paint ratio of 70:30 is expected to move towards the global average of 50:50. Thus, the Indian paint industry is in its growth phase and is expected to grow at a rate faster than that of the GDP.

SWOT
Market leaders in automotive category Stringent govt. rules and regulations

PESTLE
Penetration in rural markets Bureau of Indian Standards

SCA
1st lead free company No VOC

Observations
Growth potential in rural India and Infrastructure development

Leveraging its R&D competencies in developing new products with PODs which can give them competitive advantage

Improving supply chain network to penetrate in eastern states of India

Venturing into ecommerce .

Concerns
Competitive threats, Price increase constrains

Rising crude derivative prices, Environmental Hazards, rising labour cost.

Slow down in the auto industry, Rupee depreciation, Credit Risks

General excise duty rate is being enhanced from 10% to 12%, Environmental regulation

Systems and Methodology

Sales and Advertising plan

Targeting ASEAN nations Indonesia China Focus on India alone

Exports

JV and Acquisitions

Advertisements

CSR

Original Jingle Mascot Goody Brand Association

Green Initiative Paint the change Other CSR activities

Financials with Profitability (2013)

Debt to Equity ratio: 0.05 Operating Profit: 11.19

EBITDA: 9.57

Sales Turnover: 3376 crores

Recommendations
Target more Contractors and Interior Decorators.

Increase in the no of stores from 300 to 600 with an average of 5 stores per month.

Tie Up with Real Estate companies to have stalls at construction sites.

Conclusion
The market for paints in India is expected to grow at 1.5 times to 2 times GDP in the next five years. With GDP growth expected to be between 5-6% levels, Kansai Nerolac is likely to clock above industry growth rates in the future, considering they have a strong brand and good reach.

Decorative paints segment is expected to witness higher growth going forward. The fiscal incentives given by the government to the housing sector have benefited the housing sector immensely. This will benefit key players in the long term.

Although the demand for industrial paints is lukewarm it is expected to increase going forward. This is on account of increasing investments in infrastructure.

THANK YOU