Jan 3, 2001|
Asian Paints: Who is the target?
Asian Paints is amongst the top gainers on the bourses for the year 2000. The share price has appreciated 30% after touching its 52 week low of Rs 210. This re–rating has been led by creditable results which the company reported despite the 30% hike in oil prices during the year. There have been reports of the company firming up its acquisition plans. We take a closer look at the second aspect i.e. the company's two probable acquisition targets viz Jenson & Nicholson and Shalimar Paints.
|No. of employees
Asian Paints has been eyeing the Rs 45 bn O P Jindal group controlled Shalimar Paints, where the Jindals and Mr. Jhunjunwala together holds 62% stake in the company. The management of Shalimar Paints had plans to exit from the paint business. Infact, early last year, it held negotitations with the South African paint major, Barlow, which failed to take off. The company has two plants at Hoaro (West Bengal) and Nashik (Maharastra) having an installed capacity of 19.7 THTPA (thousand tonnes per annum). Out of the total production of Shalimar Paints, 75% constitutes decorative paints and the rest comprise industrial paints as well as marine coating.
Jenson & Nicholson, on the other hand, has a significant presence in the industrial paint segment. The company has three manufacturing divisions viz. Bulandshah (Uttar Pradesh), Parganas (West Bengal) and Raigarh (Maharashtra) with an aggregate installed capacity of 32.7 TMTR. The company has technical tie-up with Chugoku of Japan. The company also has subsidiaries in Bangaladesh and Nepal (the Nepal subsidiary was taken over by Berger Paints).
However, higher base raw material prices and competition have pressurised margins of both these companies in the current year. Severe floods in Eastern India (both these companies have significant presence in this region) only added to their woes. The result: a slowdown in volumes in the current year.
Asian Paints has targeted a sales turnover of Rs 21 bn by FY03 (Rs 12 bn in FY00). We expect the company to report a turnover of Rs 14 bn in FY01. The acquisition of Jenson & Nicholson and Shalimar Paints would increase sales turnover of Asian Paints by over 25%. This would enable Asian Paints, to become one of the top five decorative paint companies in the world by FY05. An emerging multinational!
More Views on News
Aug 17, 2017
Asian Paints registers 20.1% YoY decline in profits during 1QFY18 with low single-digit volume growth in the decorative paints segment.
May 18, 2017
Asian Paints registers 10.4% YoY growth in profits during 4QFY17 with double-digit volume growth in the decorative segment.
Feb 17, 2017
Asian Paints has reported a 2.6% YoY increase in the topline and a 0.6% YoY decline in the bottomline during the quarter.
Oct 28, 2016
Asian Paints has reported a 10.2% YoY increase in the topline while the bottomline has grown by 18% YoY
Aug 3, 2016
Asian Paints has reported a 9.1% YoY increase in the topline while the bottomline has grown by 17.9% YoY.
More Views on News
Aug 17, 2017
A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.
Aug 10, 2017
Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 10, 2017
Bitcoin hits an all-time high, is there more upside left?
Aug 16, 2017
Ensure your financial Independence, and pledge to start the journey towards financial freedom today!
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407