Final Dividend of Rs 28, Record Date 11 June: Largecap Stock to Make the Highest Dividend Payout Soon

Remember the phone wars? Airtel, Idea, and Vodafone were kings, comfortable and established. Then Reliance Jio barged in with crazy low prices, shaking things up.

The entire industry scrambled to keep pace - data allowances skyrocketed, prices plummeted. The old guard had to adapt or risk getting left behind.

Something similar might be brewing in the paint industry. Asian Paints, the undisputed leader for years, faces a fresh coat of competition: Birla Opus, the paint brand from Grasim Industries.

This Aditya Birla Group company launched in February 2024 with an ambitious goal - Rs 100 billion (bn) in revenue within three years.

Reports suggest they're heavily invested, raising funds twice in 2023 to fuel their paint venture. They're betting big on recouping their investment by 2027.

This isn't the only challenge Asian Paints faces. Their recent financial performance has fallen short of market expectations.

While they secured a net profit of Rs 12.3 bn in Q4 FY24, the meager 2% year-over-year increase (YoY) is overshadowed by stagnant revenue growth.

Revenue dipped slightly to Rs 87.3 bn, failing to match the previous year's figure.

This decline reflects a combination of weak market demand and a shift in consumer behavior within the premium segment, where affordability is becoming a key factor.

Despite these headwinds, Asian Paints retains investor attention thanks to its history of consistent dividend payments. Let's delve deeper into its impressive dividend history.

Asian Paints' Glorious Dividend History

The big paint company has generously rewarded its shareholders over the years. Ever since 1994 it has continuously paid dividends.

31 years of consistent rewards is a big factor for investors to trust the company even during uncertain times.

Take a look at the 10-year dividend history of Asian Paints in the chart below.

Even amid a challenging year, Asian Paints managed to sweeten the pot for investors with their generous dividend payout in FY24.

The company declared its highest dividend in a decade, despite experiencing stagnant revenue growth and weak market demand. This commitment to shareholder value is a hallmark of Asian Paints.

The final dividend of Rs 28.2 per share, announced in May 2024, combined with the earlier interim dividend of Rs 5.2 per share, brings the total dividend for FY24 to a significant Rs 33.3 per share.

The record date for this dividend is set for 11 June 2024, with payment expected on or after 27 June 2024, subject to shareholder approval.

What Next?

Asian Paints may be under pressure at present but its long standing history and hefty market share make it a candidate for your watchlist.

This dip in Asian Paints share price might probably be a good opportunity for long-term investors considering the growth prospects of the company.

The company has big capex plans in progress. It is working on building one of the biggest automated greenfield water-based paint manufacturing facilities in Madhya Pradesh.

It aims at developing a facility of 400,000 kl/annum capacity.

They have already done the land acquisition, and the statutory approvals on the environment are in progress. The company aims to complete the project by 2028.

The company has also initiated many brownfield projects at its existing plants at Kasna, Khandala, Ankleshwar, and Mysuru. That has given the company a good lift from almost 1.7 million (m) kl/annum to about 2.3 lakh kl/annum capacity boost.

Out of this, Kasna and Khandala are completed while Ankleshwar and Mysuru are in progress, and they too should be completed in this current financial year.

Its backward integration plans are also under work. The white cement plant in Fujairah, in Dubai is in line. It should be commissioned by early next year.

For the VAM VAE plant, it has entered into a partnership with GCPL for ethylene supply. The partnership will help the company in making environment-friendly emulsions, by 2026. Such emulsion would be available at the lowest price as compared to any other player in India.

To make its products more affordable the company launched new latex technology. Through this technology, it has brought down the costs of some premium products, and now these products are available at the cost of distempers. It was launched in January 2024, and the sales volumes are already rising.

Apart from the internal initiatives, the rapidly growing real estate sector would also boost the growth of Asian Paints.

The growth prospects of the company are big and alluring. However, an investor should keep in mind that these are just prospects that may or may not turn into reality.

Hence, strong competition may dampen investor sentiment in the short, but in the long term, Asian Paints is a company that can stand its ground. Just like Bharti Airtel did when the entry of Jio disrupted the telecom sector.

Did you know that this is not the first time Asian Paints share price crashed in tough market conditions? After announcing heavy capex in April 2008, Asian Paints saw its stock price crash by 44% between May 2008 and March 2009.

After the big crash its share price recovered and rose enough to give multibagger returns.

Can Asian Paints repeat history? Find out in this video.

How Asian Paints Share Price has Performed Recently

In 2024 so far Asian Paints share price is down 16.2%.

The stock tumbled 9.2% in the past six months and more than 7% in the last year.

The stock touched its 52-week high of Rs 3,566.9 on 24 July 2023 and a 52-week low of Rs 2,6710 on 10 May 2023.

About Asian Paints

Asian Paints is one of India's most well-known paint companies.

Founded in 1942, it's also India's largest paint company. It also produces varnishes, enamels, or lacquers, surface preparation, organic composite solvents, and thinners.

The firm has business in 15 countries and has 26 paint production sites worldwide, serving customers in over 60 nations. It sells its products under numerous names such as Apcolite, SCIB, and Causeway Paints.

The firm is also well known for its supply chain approach. Its supply chain is critical to its competitiveness by offering flawless product quality and exceptional service while keeping prices down.

We will have to wait and watch how Grasim's paint business works out and how it competes with its peers.

Till then, you can compare Asian Paints with its peers:

Asian Paints vs Berger Paints

Asian Paints vs Shalimar Paints

Asian Paints vs Indigo Paints

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...