J.P.

Morgan India Investor Summit

New Delhi

September 16, 2016

Disclaimer
This presentation may contain statements which reflect Managements
current views and estimates and could be construed as forward
looking statements. The future involves certain risks and uncertainties
that could cause actual results to differ materially from the current
views being expressed. Potential risks and uncertainties include such
factors as general economic conditions, foreign exchange fluctuations,
competitive product and pricing pressures and regulatory
developments.
Responses can only be given to questions which are not price
sensitive.

Agenda
Group Overview

Economic Environment Q1 FY17

Financial Performance Q1 FY17
Business Review Q1 FY17

Risks and Outlook

Asian Paints Group Today

Over
No.

Paint Company
in India

4th

Largest Paint

Company in Asia

14th Largest Coating

USD

Billion

Group revenue

Operations in

19
countries

Part of

3
Times nearest
Competitor in India

26
Paint
Manufacturing
Plants

30

share

BSE
S&P SENSEX

49
Years of Market
Leadership in India

Company In the World

Forbes Asias Fab

50
Company; Four
times in a row

Part of NSE Nifty

50

Servicing
Consumers in over

65
Countries

7000

Employees
worldwide

Global Standing
16.0
14.2
14.0
12.0

14th largest in the World

10.9

In Billion USD

10.2
10.0

9.7

8.0
6.0

4th largest in Asia

5.5
4.6

4.0
2.0
-

4.5

4.4

4.1

3.6
2.9

2.6

2.4

2.3

2.0

2.0

1.9

1.5

1.2

1.2

* Coatings World 2016 Top

companies report

Worldwide Operations

Egypt

Jamaica
Barbados
Trinidad & Tobago

Bahrain
UAE
Oman

Nepal
Bangladesh
India

Ethiopia
Sri Lanka

Singapore
Indonesia
Solomon Islands
Vanuatu

Samoa

Fiji
Tonga

Strong Brands

Aspiration

To be the fore runner of inspiring dcor and to actively

empower customers to create their dream homes

Stand for
Belief in fostering the principles of trust and transparency
Ability to adapt itself to the changing environment
Dynamic professional management team focused towards delivering stakeholder

value with highest levels of corporate governance

Innovative strategies in the marketplace
Efficient manufacturing and logistics
Capabilities to effectively harness Information Technology to improve efficiency in
operations (SAP, i2, etc.)

Prudent management of financial resources

Focus on Research and Development (dedicated group R & D centre in India at
Turbhe near Mumbai)

Innovative Market place Strategies

Small Packs
Exterior Paint Segment
Consumer and Dealer helpline
Colour Next (Prediction of Colour trends through in-depth research
Special effect and textured paints
Signature Stores
Colour Ideas store
Samplers

Beautiful Homes Guide

Water Proofing and Wallpaper business
Ezycolour Service brand
Home Solutions (Painting solution service)
Colour Consultancy @ Home
Adhesives

Powerful Consumer Connect

Signature Stores in
Metros

Colour Ideas Stores

AP Homes

Innovative retailing strategy showcasing latest product and solution offerings

enabling consumers to get inspired, try and decide
Strong presence in all product segments, servicing over 40,000 dealers

Robust Supply chain and IT

State of the art Supply Chain system using cutting edge latest technology for efficient management
and execution
World Class, large manufacturing facilities with latest automation technologies
Largest single location paint manufacturing capacities at Rohtak (Haryana) and Khandala,
(Maharashtra).
Planning to set up new, fully-automated paint manufacturing facility at Mysuru and Vizag in South
India over the next 2-3 years
Strong distribution and logistic network across geographies using modern material storage and

handling technologies
Dedicated in-house IT team adding value to business process in terms of higher productivity, lower
costs, speed, consistency and standardization

Dedicated R&D
Dedicated Research and Technology facility at Turbhe
(Near Mumbai) with over 150 scientists
Supports company strategy around Technology
development, Sustainable new products, Green
products, Value re-engineering for productivity
improvement and cost optimization

Our scientists had won the Roon award in 2013 one

of the highest technical achievements in the coatings
industry

Changing with times

Business Portfolio

Decorative Coatings India

Industrial Coatings India

PPG Asian Paints
Asian Paints PPG

International Operations

Home Improvement Business India

Sleek
Ess Ess

2%

4%

13.6%

80%

Decorative - India

Home Improvement - India

Industrial - India

International Operations

FY 2015- 2016

Chemical Business

Adhesives

Decorative Coatings - India

Largest business unit of the company

Primarily operates in four segments

Interior Wall finishes
Exterior Wall finishes

Metal Finishes (Enamels)

Wood Finishes
Introduced new categories like water-proofing, wallpapers & adhesives

Product for every price point and requirement

Industrial Coatings - India

Asian Paints participates in the Industrial Coatings segment, through two 50:50 JVs with PPG Inc. of USA

PPG Asian Paints (For Auto Coatings)

The Auto segment is catered through our JV (PPG AP)
Second largest supplier to the auto segment in India

Now, the largest player in auto refinish segment, post acquisition of ICI Indias 2k auto refinish
business in 2007
Commissioned a 3,200 KL / year plant in Chennai, Tamil Nadu in 2008

Asian Paints PPG (For Non Auto Industrial Coatings)

Protective coatings, floor coatings, road marking paints and powder coatings segment catered to
by this JV
Services customers in the sectors of Infrastructure, Oil & Gas, Power Plants, White Goods, etc.

International Operations
Contributes about 14% to the group turnover

6.4% 11.0%
27.9%

Caribbean

Began by establishing presence in Fiji in 1978

Presence in 19 countries spread over 5 regions
Caribbean : Jamaica, Barbados and Trinidad & Tobago
Middle East : UAE, Bahrain, Oman & Egypt

Middle East & Africa

54.7%

South Pacific

FY 2015-2016
Net Sales Break-Up

Asia : Nepal, Sri Lanka, Bangladesh, Singapore & Indonesia

South Pacific : Fiji, Tonga, Solomon Islands, Vanuatu & Samoa
Africa : Ethiopia

Focus on establishing presence and growing in high growth emerging markets

Looking for expansion in key markets of Africa and South East Asia
Acquired 51% stake in Kadisco Chemical Industry PLC, Ethiopia in Feb 2015

Setting up paint manufacturing facility at Indonesia

Asia

Home Improvement Business - India

In 2012, Asian Paints announced plans to consider opportunities in the area of Home Improvement
and Dcor
Entered Kitchen space in India in Aug13 by acquiring 51% stake in Sleek International
Sleek is a major organized player in the modern kitchen solution space with pan India presence
Engaged in the business of manufacturing, selling and distributing kitchens, kitchen
components including wire baskets, cabinets, appliances, accessories etc.
Retail network of more than 30 showrooms including shop-in-shops and 250+ dealers
Launched Smart kitchen range for easy installation and design
Entered the Bathroom fitting business in June14 through acquisition of front end sales business
(including brands, network and sales infrastructure) of ESS ESS Bathroom products Pvt Ltd
ESS ESS is a prominent player in the bath business segment in India and has high quality
products in this segment
Launched Sanitary ware range Bathsense & premium range of Bath fittings Royale

Chemicals
Asian Paints manufactures Phthalic Anhydride (PAN) and Pentaerythritol (Penta)
PAN manufactured in Gujarat and Penta in Tamil Nadu
More than 50% consumed internally

Contributes about 1% to the groups consolidated revenue

Contribution to the groups revenue has been continuously decreasing

Consistent performance
Consolidated Net Sales and
Operating Income ( ` Crores)
15,534
16,000

10,000

1,800

1,400

1,200

CAGR
17.8%

1,000

8,000
6,000

1,726
1,600

14,000
12,000

Net Profit (` Crores)

CAGR
23.3%

800
600

3,021

4,000

400

2,000

200

0
2005-2006

2015-2016

212

2005-2006

2015-2016

Sustained value creation...

Market Cap (` Crores)

83,326

70%
60%

6,178

52% 51% 54%

53% 54%
51%
49%
46% 47%

50%

7,000
6,000

40%

5,000

30%

4,000

20%

3,000

39%

10%

2,000

2015-16

2014-15

2013-14

2012-13

2011-12

2015-2016

2010-11

2005-2006

2009-10

2008-09

0%

1,000

2007-08

8,000

73%

2006-07

9,000

CAGR
29.7%

80%

2005-06

10,000

Dividend Payout Ratio

Recent Accolades
Rated as the 5th Most valuable Brand in India Sept 2015 (Compiled by marketing and brand
consultancy Millward Brown and WPP Group)

Included in Forbes Indias List of Super 50 companies in India in 2016

Felicitated as one of the MOST IMPACTFUL COMPANIES OF THE DECADE by CNBC Awaaz in Jan
2015
Included in Forbes Magazine's Asia's Fab 50 List of cos 4 years in a row from 2011
Ranked as the 4th Most Admired Company in the FMCG Sector by Fortune India Aug 2014
Presented with the Asian Centre for Corporate Governance & Sustainability Award for the Best
Governed Company in 2011
Asian Paints receives the Best Audit Committee Award from the Asian Centre for Corporate
Governance & Sustainability in 2011

Presentation structure
Group Overview

Economic Environment Q1 FY17

Financial Performance Q1 FY17
Business Review Q1 FY17

Risks and Outlook

Economic Environment
The domestic economy continued to show signs of improvement in Q1FY17 after a good pick-up
exhibited in the last quarter of FY16
Consumption demand which saw an uptick in the second half of FY16, continued its momentum.
However the trajectory of the overall level of activity in the economy still remains uneven
Industrial production data points to an extremely gradual recovery with 2.1% increase in June
2016
At the same time, inflation though trending higher over the last couple of months, close to
the target range of the Central Bank
Monsoon has definitely been a bright spot this season and has progressed well across the country
This bodes well for the rural sector economy and could provide a boost to the consumption
demand as we move ahead
On the global front, growth remains benign and the Brexit referendum has only added to the
uncertainty
While the financial markets have recovered from the immediate impact felt around the
referendum, we will need to be watchful on how the future course of events unfold

Presentation structure

Group Overview

Economic Environment Q1 & FY17

Financial Performance Q1 FY17
Business Review Q1 FY17

Risks and Outlook

NEW ACCOUNTING STANDARDS (IND AS)

We have adopted the Indian Accounting Standards (IND AS) with effect from 1st April, 2016.
Accordingly, the Standalone and Consolidated results for the quarter ended 30th June, 2016
are in compliance with IND AS and other accounting principles generally accepted in India and
the results for the comparative quarters and previous year have been prepared to comply with
IND AS.
Some key changes on account of this are as follows:
Incentive to dealers by way of cash discounts and sales promotion expense have been
deducted from Sales against being reported as part of Expenses under the Previous GAAP.
Excise duty which was earlier being deducted from Sales is now presented as an Expense.
No impact of the above 2 changes on the profits.

Acquired Goodwill, resulting from acquisition of Sleek and Ess Ess business will not be
amortized but will be tested for impairment on an annual basis. Certain other intangible assets
are considered to have indefinite useful life under IND-AS and hence will not be amortized but
tested for impairment on annual basis.

NEW ACCOUNTING STANDARDS (IND AS)

Continued
All investments (Excluding Subsidiaries/JVs and other equity investments) are carried at fair
value as required under IND-AS. Gain / Loss resulting from change in fair valuation between
the reporting dates will be recorded in the P&L. At the same time, Gain / Loss on equity
investments (Excluding Subsidiaries/JVs) resulting from change in fair valuation between the
reporting dates will be recorded in the OCI statement.
All assets of an acquired entity will have to be reported at fair valuation. Accordingly, fixed
assets of Kadisco, Ethiopia, acquired in Feb 2015, now recorded at fair value as at the date of
acquisition (as against book value as per earlier standards) and depreciation charged on such
increased value.
Under IND-AS, PPG-AP to be treated as an associate company wherein only APLs share of
Profit after Tax of PPG-AP consolidated as against proportionate consolidation of every line
item of P&L. At the same time, AP-PPG to be consolidated as a subsidiary of APL in the
consolidated financials.

Financials Q1 FY17 results

29

Standalone Revenue Growth Trend

25.0%
22.2%
19.9%

20.0%

18.2% 18.3%

18.2%

16.3%

16.1%

Growth over Last Year

15.0%

13.2%

12.6% 12.9%

12.2%

11.8%

11.5%
10.2%

10.0%

8.6%
7.5%

6.7%

6.4%

7.2%
6.0%

5.0%
2.3%

0.0%
Q1
FY13

Q2
FY13

Q3
FY13

Q4
FY13

12M
FY13

Q1
FY14

Q2
FY14

Q3
FY14

Q4
FY14

12M
FY14

Q1
FY15

Q2
FY15

Q3
FY15

Q4
FY15

12M
FY15

Q1
FY16

Q2
FY16

Q3
FY16

Q4
FY16

12M
FY16

Q1
FY17

The 10.2% growth in Q1FY17 is as per the new Indian Accounting Standards (IND AS) which was adopted
wef 1st April 2016 ; hence it not comparable with the numbers for the previous quarters
30

Dividend
In FY 2015-16
Total Dividend of ` 7.50 per share (750%)
Final dividend of ` 5.30 per share
Interim dividend of ` 2.20 per share
Payout ratio of 54.2% for the year (on standalone financials)
In FY 2014-15
Total Dividend of ` 6.10 per share (610%)
Final dividend of ` 4.30 per share
Interim dividend of ` 1.80 per share
Payout ratio of 52.6% for the year (on standalone financials)

31

Presentation structure
Group Overview

Economic Environment Q1 FY17

Financial Performance Q1 FY17
Business Review Q1 FY17

Risks and Outlook

Capex
Total capex for FY17 estimated to be about ` 600 crores
Includes some spends on the two new paint manufacturing facility to be built at Vizag (Andhra
Pradesh) and Mysuru (Karnataka)
Revision of the proposed paint manufacturing capacity of Vizag
The total capacity will be 5,00,000 KL/annum (4,00,000 KL announced earlier)
Investment outlay of ` 1785 crores (`1750 crores announced earlier)
No change in Mysuru plant plan
6,00,000 KL plant with an investment of approximately ` 2300 crores

Both plants to come up in phases depending on future demand conditions

Business Review : Q1 FY17

DECORATIVES BUSINESS
Decorative Paints business in India registered low double digit volume growth in Q1
Profitability improved mainly driven by favorable material costs
No Price revision done in this quarter
Cumulative price decrease of 2% for FY16 against increase of 0.39% in FY15
Price decrease of 2% effective 26th Feb16
Continued focus on network expansion and opening new Colour Ideas store
35,000+ Colour World machines and 300+ Colour Ideas stores across the country
Good response to the Loctite brand of adhesives
Retail distribution arrangement with Henkel Adhesives Technologies, Germany.
SmartCare range of waterproofing products continues to grow well
AP Homes store in Coimbatore receives good feedback
Integrated dcor store across categories of paints, wall papers, kitchen, bath fittings, sanitary ware,
furnishings, light fittings, etc

Business Review : Q1 FY17

INDUSTRIAL BUSINESS
PPG-Asian Paints (PPG-AP)
Witnessed good demand in the Auto OEM and General Industrial business segment
Falling raw material prices had a favorable impact

Asian Paints PPG (AP-PPG)

Industrial Liquid Paints segment grew well in the Quarter
Operating margins improved due to declining raw material prices

Under IND-AS, PPG-AP to be treated as an associate company wherein only APLs share of Profit after Tax of PPG-AP
consolidated as against proportionate consolidation of every line item of P&L. At the same time, AP-PPG to be consolidated
as a subsidiary of APL in the consolidated financials.

Business Review : Q1 FY17

INTERNATIONAL BUSINESS
The international business reported good numbers specifically aided by contribution from good pick- up
in demand in Nepal, UAE and Fiji
Business in Ethiopia, though impacted by foreign exchange shortfall, grew at a satisfactory pace
Construction of the greenfield plant at Indonesia in progress

HOME IMPROVEMENT BUSINESS

Both the segments within the Home Improvement business the Kitchen business under Sleek and the
Bath business under Ess Ess, saw an improvement in topline in line with the companys plans
This was aided by expansion in network and enhanced product portfolio
Continue to work on further streamlining the business model in both these businesses

Presentation structure
Group Overview

Economic Environment Q1 FY17

Financial Performance Q1 FY17
Business Review Q1 FY17

Risks and Outlook

Risks & Outlook

Domestic demand outlook expected to improve as we move ahead
Good monsoon after 2 consecutive years of deficient rains, is expected to provide the
required fillip to rural sector demand
Potential benefit from the 7th Pay commission payouts and investment push from the
Government
Raw material prices have seen some uptick in the recent months
Need to monitor this trend very closely
In the International markets, units like Egypt, Ethiopia & Trinidad, face challenges around foreign
exchange availability and demand conditions; could impact performance going forward

Thank you

STANDALONE Q1 FY 2016-17
` In Crores

40

CONSOLIDATED Q1 FY 2016-17
` In Crores

41

KEY RATIOS

For Consolidated results, PAT is before Minority Interest

42