Asian Paints: Who is the target? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Asian Paints: Who is the target?

Jan 3, 2001

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.

(Rs m)Asian
Paints
Jenson &
Nicholson
Shalimar
Financial Data     
CMP (Rs) 275 12 59
Market Cap 18,398 50 223
Sales 12,408 1,640 1,353
PAT 973 49 - 12
Net worth 3,515 903 205
NFA 3,293 1,186 149
EPS (Rs) 14.5 11.8 - 3.2
CEPS (Rs) 31.2 29.0 0.9
P/E 19.0 1.0 - 18.6
GPM (%)14.3%11.8%4.3%
NPM (%)7.8%3.0%-0.9%
Capacity Data   
Paints (THTPA) 162.1 32.7* 19.7
No. of employees 3,000 1,000 NA
*TMTR   

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!

Equitymaster requests your view! Post a comment on "Asian Paints: Who is the target?". Click here!

  

More Views on News

ASAHI SONGWON 2020-21 Annual Report Analysis (Annual Result Update)

Nov 9, 2021 | Updated on Nov 9, 2021

Here's an analysis of the annual report of ASAHI SONGWON for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of ASAHI SONGWON. Also includes updates on the valuation of ASAHI SONGWON.

INDIGO PAINTS 2020-21 Annual Report Analysis (Annual Result Update)

Nov 8, 2021 | Updated on Nov 8, 2021

Here's an analysis of the annual report of INDIGO PAINTS for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of INDIGO PAINTS. Also includes updates on the valuation of INDIGO PAINTS.

ASIAN PAINTS Announces Quarterly Results (2QFY22); Net Profit Down 29.2% (Quarterly Result Update)

Oct 26, 2021 | Updated on Oct 26, 2021

For the quarter ended September 2021, ASIAN PAINTS has posted a net profit of Rs 6 bn (down 29.2% YoY). Sales on the other hand came in at Rs 71 bn (up 32.6% YoY). Read on for a complete analysis of ASIAN PAINTS's quarterly results.

AKZO NOBEL Announces Quarterly Results (1QFY22); Net Profit Up 474.7% (Quarterly Result Update)

Aug 16, 2021 | Updated on Aug 16, 2021

For the quarter ended June 2021, AKZO NOBEL has posted a net profit of Rs 759 m (up 474.7% YoY). Sales on the other hand came in at Rs 6 bn (up 142.3% YoY). Read on for a complete analysis of AKZO NOBEL's quarterly results.

Asian Paints Touches Record High After Stellar Quarterly Results (Views On News)

Jul 22, 2021

Asian Paints shares scaled fresh 52-week high today, before paring gains as the company's topline soared 91.1%.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

How to Find Your Next 10-Bagger in this Market (Profit Hunter)

Nov 19, 2021

The #1 make or break factor in your portfolio you shouldn't ignore.

MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

Nov 20, 2021

The Rs 19 bn issue is set to hit the market soon.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

COMPARE COMPANY

MARKET STATS