MORGAN STANLEY INDIA SUMMIT

Mumbai, India

June 12, 2019

 DISCLAIMER

This presentation may contain statements which reflect Management’s 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.

2
 ASIAN PAINTS TODAY
No. 1 Over
3 3 rdLargest Paint Offerings
across:
Paint Company
$ 2.7 Billion Times nearest
Company in Asia
Group revenue Competitor
9th Largest Paint Paints
in India in India
Co In the World
Chemicals
Part of
Operations in
27 30 share 50+ Wall Coverings
16 Paint
Manufacturing BSE
Years of Market
Water
countries Leadership in India
Plants S&P SENSEX proofing

Forbes Asia’s Fab Servicing Kitchen

50 Part of NSE Nifty Consumers in over

7500 +
Bath fittings
Company; Fifth 50 65 Employees
worldwide
times in a row Countries Adhesives

3
 COATINGS INDUSTRY – GLOBAL STANDING
16.0 14.8
14.0
12.0 11.6
11.5
In Billion USD

10.0
8.0
6.0
5.4
4.0 5.0
4.8
2.0 4.4

- 2.9
2.6
2.2
2.0
1.6 1.5
1.0
0.9

Sales

* Coatings World Magazine - 2018 Rankings

Source(only revenue World
: Coatings from coatings sales(July
Magazine considered
2018 for the ranking)
issue)
 BUSINESS SEGMENTS - PORTFOLIO
3% 2%

12%

83%

FY 2018-19

Deco - India International Industrial Home Improvement

Deco India : Paints, Water Proofing, Wall Coverings & Adhesives

International – Operations outside India (Asia, Africa, Middle East and South Pacific)
Industrial – Includes only AP-PPG revenues
Home Improvement – Bath & Kitchen business in India
INDIAN PAINT INDUSTRY - DYNAMICS
1 to 1.5 times
Real GDP Growth

Growth closely
linked to GDP
Growth

50:50 Low per Capita Global

75:25 Paint
Global Decorative Paints
average @
Consumption at
12-15 Kgs
Ratio to Industrial Paints
` 500 ~3.75 Kgs

Billion
Industry

Servicing Paints sold 70:30

through Mom & Potential
directly by Organized sector to
Pop Shops Unorganized for growth
company
 INDIAN PAINT INDUSTRY - GROWTH DRIVERS

❖ Urbanization & Nuclear Family phenomenon; Smart Cities; Affordable Housing

❖Family involvement in decision making
❖ Upgradation, trendy colours, wall coverings, designer walls etc.
❖ Higher awareness influencing customer preferences
❖ Quality, Decorative and Protective features of paints
❖ Unorganized to Organized shift with GST implementation from July 2017
❖ GST rate reduction – latest reduction from 28% to 18% (July 2018)
❖ Infrastructure growth viz. Roads, Ports, Refineries etc.
❖ Benefits Industrial Paint segment
❖ Automobile majors’ India focus and Making India an Export hub
❖ Benefits Auto Paint segment
 DECO INDIA – BUSINESS FOOTPRINT
❖Largest business unit – 83% of group revenues

❖ Leveraging its distribution strength (60,000+ dealers across the country)

❖Introduced new categories like Water-proofing, Adhesives, Wallpapers etc

❖ State of the art, highly automated decorative paint manufacturing plants – Eight plants
across the country for an efficient distribution footprint
❖Total manufacturing capacity of 1.63 million KL/annum of Decorative paint products
❖Some of the largest single location automated paint manufacturing capacities across
the world
❖Mysuru (Karnataka) plant commissioned in Sept 2018 with initial capacity of 0.3
million KL/annum and Vizag (Andhra Pradesh) plant commissioned in Jan 2019
with initial capacity of 0.3 million KL/annum
❖Mysuru plant can be scaled upto 0.6 million KL/annum and Vizag plant can be
scaled upto 0.5 million KL/annum in a phased manner
 DECO INDIA

LAST 20 YEARS………
❖Increased Market Share by over 20%
❖Exploded emulsion growth – especially in exteriors
❖Upgraded distempers to emulsions
❖Launched over 150 new products
❖Re-invented the brand - moved into Décor & services – APHS, Paint Total,
ColourPro, Colour Consultancy

VISION:-
‘To be the fore runner of inspiring décor and to actively
empower customers to create their dream homes’
 DECO INDIA – CHANGING WITH TIMES

1954 2002 2012

❖ Lifting the brand into a modern, contemporary space

❖ Unique, Vibrant, Colourful

❖ Symbol of creativity and décor

 DECO INDIA
The key has been continuously attempting to understand and meet the changing
needs of the ever-changing consumer
❖Refashioned retailing – focus on dealer influencing the consumer
❖Increased reach – 15,000 retailers to 60,000+ retailers (46,000+ ColourWorlds –
proprietary tinting system)
❖Achieved a premium image; high sale of faux finishes.
❖Leader across all geographies except Kashmir
❖70% of sale on 3 day payment
❖Use Information Technology across all areas of operations
❖135 depots servicing over 60,000 customers yet reduced FG inventories
❖20 to 30 new products every year
❖Built the largest and most modern factories in the world
❖Branched into waterproofing, painting tools, premium wood finishes, adhesives
 DECO INDIA
❖Network Expansion
❖About 3000 dealers added every year
❖4000 ColourWorlds additions per annum
❖25 Colour Ideas additions per annum

❖Most products sell at a 5 to 10% premium to competition while gaining share.

❖Research & Development

❖225 scientists at the Research & Technology Centre near Mumbai
❖Continuous Sourcing / Formulation efficiency; New Product Development
❖Training & Development
❖ Painter training for skill development /upskilling -100,000 trainings in FY18-19.
 DECO INDIA – INNOVATION IN RETAILING
❖ Innovating the retailing footprint with 400+ Colour Ideas stores
❖ Showcasing latest product and solution offerings
❖ Enabling consumers to get inspired, try and decide – helped by a consultant

Traditional Hardware 46,000+ Colour World - Colour Ideas – Modern dealer outlets
shops Paints tinted at dealer outlets – end to end home décor solutions
 DECO INDIA – INNOVATION IN RETAILING
❖ Experimenting with AP Homes
❖Multi-category integrated décor store offering products & solutions across categories of
paints, wallpapers, kitchen, bath fittings, sanitaryware, furnishings, light fittings, etc.

AP Homes - Multi-category décor stores

at Coimbatore, New Delhi, Kochi,
Raipur, Karur & Tumkur
 INDUSTRIAL COATINGS INDIA
❖ Participating in the Indian Industrial coatings segment through 2 Joint ventures with PPG Inc. of
USA, the global coatings leader

❖ Industrial business makes up about 3% * of the group revenues

❖ Servicing the entire spectrum of Industrial coatings products - Automotive coatings, Refinishes,
Protective coatings, Floor coatings, Powder coatings

❖ Market leader in the Auto Refinish segment

❖ Second largest player in the Auto OEM segment

❖ Expanding Industrial coatings manufacturing capacity to cater to OEM demand

❖ Many Auto OEMs (including Ford, Hyundai, General Motors) focused on using India as a base for
servicing overseas markets

* Includes only AP-PPG revenues

 INTERNATIONAL BUSINESS
❖ Contributes about 12% of group revenues operating in 15 countries outside India

❖ In top three in all markets in Decorative paints, except in Singapore, Oman & Indonesia

❖ Significant presence in Middle East and South Asia

❖ Expanding its international presence with key focus on Africa and South East Asia
❖ Set up greenfield operation in Indonesia with capacity of 24,550 KL/annum
❖ Acquired the 2nd largest paint company, Causeway, in Sri Lanka in April 2017
❖ Acquired the 2nd largest paint company, Kadisco, in Ethiopia in 2015

❖ Divested operations in Caribbean in 2017 to realign the portfolio towards high growth
emerging markets
 MARKET POSITION ACROSS GEOGRAPHIES
MARKET
REGION COUNTRY POSITION BRAND

NEPAL 1 ASIAN PAINTS IBU Group

SRI LANKA 1 ASIAN PAINTS, CAUSEWAY
ASIA BANGLADESH 2 ASIAN PAINTS
INDONESIA - ASIAN PAINTS 5.8%
SINGAPORE - BERGER PAINTS
26.1%
BAHRAIN 1 ASIAN PAINTS BERGER
MIDDLE 47.7%
UAE 3 ASIAN PAINTS BERGER 20.3%
EAST
OMAN 4 ASIAN PAINTS BERGER

ETHIOPIA 2 KADISCO ASIAN PAINTS Middle East

AFRICA
EGYPT 3 SCIB PAINTS Africa
Asia
SOUTH FIJI, SOLOMON ISLANDS, South Pacific
1
PACIFIC SAMOA, VANUATU, TONGA TAUBMANS, APCO
 HOME IMPROVEMENT SEGMENT
❖ Forayed in this business segment six years back with a vision of being a complete décor
solutions provider to help customers create their dream homes

❖ Currently offering products and solutions in 2 categories

❖ Kitchens – engaged in business of manufacturing, selling and distributing complete
modular kitchens, kitchen components including wire baskets, cabinets, appliances,
accessories, etc;
❖Recently introduced Wardrobes
❖ Bath Fittings
❖Introduced sanitaryware recently

❖ Currently contributes 2% of group revenues but a key focus area for future growth
alongside the growth potential in main coatings business

❖ Leveraging our distribution strength and customer understanding around Décor

 HIGHEST STANDARDS OF CORPORATE GOVERNANCE

❖ Company’s philosophy founded on fairness, accountability, disclosures and

transparency

❖ Comprehensive disclosures, structured accountability in exercise of powers, adhering

to best practices and commitment to compliance with regulations - Integral part of
business

❖ Experienced Board of Directors – Independent Directors with strong industry

knowledge & experience
 CONSISTENT PERFORMANCE

Consolidated Net Sales

and Operating Income Net Profit (` Crores)
(` Crores)
2,159
19,350 2,200

18,000 2,000
1,800
16,000 CAGR
CAGR 1,600 18.4%
14,000 16.3%
1,400
12,000
1,200
10,000
1,000
8,000 800
4,279 398
6,000 600
4,000 400
2,000 200
0 0
2008-2009 2018-2019 2008-2009 2018-2019
 SUSTAINED VALUE CREATION
Market Cap (` Crores)
143,179
Dividend Payout Ratio
10,000 56.8%
60% 54.0% 52.6% 54.2% 53.1% 53.1%
7,539 49.0%
51.0%
46.0% 47.0%
50%
39.0%
40%
30%
5,000
20%
10%
0%

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19
0
2008-2009 2018-2019

Current Market Cap at ~ ` 1431 Billion

 STANDALONE FINANCIALS : FY 2018-19
Standalone Q4 (Rs. crs)
• Revenue from Operations up by 12.2%
4,235
4,500 3,775 • PBDIT flat at ` 842 crores – Impact of higher
4,000
3,500 material prices & higher media spends
3,000
2,500
• PBDIT Margin of 19.9% in Q4-FY19 as
2,000
1,500 842 844
1,000 480 492 compared to 22.4% in Q4-FY18
500
- • PAT marginally lower than LY – Additional
Revenue PBDIT PAT
impact of higher depreciation for the 2 new
Q4 - FY19 Q4 - FY18
plants
Standalone 12M (Rs. crs)

16,392
18,000
14,154
16,000 • Revenue from Operations up by 15.8%
14,000
12,000 • PBDIT at ` 3,587 crores; growth of 12.2%
10,000
8,000
3,587 • PBDIT Margin of 21.9% for full year
6,000 3,198
2,135 1,895
4,000
compared to 22.6% in previous year
2,000
-
Revenue PBDIT PAT
• PAT at ` 2,135 crores; growth of 12.7%
23
12M - FY19 12M - FY18
 CONSOLIDATED FINANCIALS : FY 2018-19
Consolidated Q4 (Rs. crs)

6,000 5,018
4,492 • Revenue from Operations up by 11.7%
5,000

4,000 • PBDIT flat at ` 880 crores

3,000
• PBDIT Margin of 17.5% in Q4-FY19 as
2,000
880 879
1,000
487 496 compared to 19.6% in Q4-FY18
- • PAT marginally lower than LY
Revenue PBDIT PAT

Q4 - FY19 Q4 - FY18

Consolidated 12M (Rs. crs)

19,350
20,000 16,844
• Revenue from Operations up by 14.9%
15,000
• PBDIT at ` 3,752 crores; growth of 9.8%
10,000
• PBDIT Margin of 19.4% for full year
3,752 3,418
5,000 2,212 2,028
compared to 20.3% in previous year
-
Revenue PBDIT PAT
• PAT at ` 2,212 crores; growth of 9.1%
24
12M - FY19 12M - FY18
THANK YOU