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One of the greatest decorative coatings companies in the world and the largest paint manufacturer in India is Asian Paints. Four pals, Champaklal Choksey, Chimanlal Choksi, Suryakant Dani, and Arvind Vakil, came up with the idea for the company in Mumbai and it was founded in 1942. In order to confront certain global makeup giants in the Indian market, the four friends started this company. The corporation started out as a small partnership and over time grew into a corporate behemoth with a combined turnover of about INR 354 billion.
It included industrial paints, waterproofing, paints, adhesives, and decorations for residential items including sanitary ware and modular kitchens. With 27 manufacturing plants spread over almost 15 nations, Asian Paints supplies over 60 countries through its subsidiaries, including SCIB Paints and Berger International.
Since 1967, Asian Paints has dominated the Indian paint market, and it has maintained this position via constant innovation and a strong customer-focused approach. It has become so well-known and respected for its professionalism and speed of development that it is currently the eighth largest paint company globally and the second largest in Asia. Its commitment to providing clients with high-quality products and services has made it a trusted brand in both domestic and foreign markets.
Concerning Asian Paints
In 1942, four friends—Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C. Dani, and Arvind R. Vakil—founded Asian Paints in Bombay, which is now Mumbai. Due to its association with the Quit India Movement, it was a historically regrettable period for India. Since then, the import of paints has been temporarily prohibited, which has given the business a fantastic opportunity. At first called Asian Oil and Paint Company Pvt. Ltd., it was involved in the upkeep of rubber tire latex and surface coatings.
Smaller paint packs were first introduced by the corporation in 1945 in response to local demand and distribution. After rebranding as Asian Paints (India) Pvt. Ltd. in 1965, Asian Paints became a public limited corporation in 1973. With a large number of subsidiaries and joint ventures, the corporation subsequently extended its national borders into numerous foreign nations over the course of several decades.
Asian Paints was the market leader in India’s paint industry by 1967, and it has consistently held that position ever since. With 27 manufacturing facilities across more than 15 countries, it is currently regarded as the second-largest paint maker in Asia and eighth globally. In this fiercely competitive paints business, the company’s consistent development and success have been greatly aided by creative marketing techniques and a strong customer focus.
The Business Model of Asian Paints
Asian Paints Treasury has so far contributed to the global paint industry, which has always offered a creative and customer-focused value offering. They produce a wide range of complimentary paints, both decorative and functional, as well as industry-specific home renovation items like waterproofing agents, wallpaper, and adhesives. Along with activities like color consultation and interior design, they could also include other activities that provide value to the customer’s experience beyond just attractive paint samples.
Green solutions and sustainability are part of this business model’s opposite side. Sales of decorative bake paintings are the activity that generates the largest revenue, while the Home Solutions division adds to revenue by catering to premium customers. Asian Paints is hence important to various market groups due to its extensive range of goods and services.
With over 50,000 retail locations dotted throughout their towns and villages, Asian Paints’ innovative business model is enhanced by their e-commerce portals. The memorable slogan “Har Ghar Kuch Kehta Hai” embodies emotional marketing that forges a connection between individuals and their houses. The combination of Asian Paints’ strong brand recognition, significant R&D expenditures, and strategic alliances maintains the company competitive and positions it as a reliable and creative face of the global paint industry.
Asian Paints’ Revenue Model | How Asian Paints Makes Money
The decorative paints segment, which accounts for up to 70% of Asian Paints’ revenue, is the primary driver of revenue diversification. It sells wood treatments, enamels, and wall finishes for both internal and outdoor use to businesses and consumers (B2C and B2B). Through joint ventures, the company has launched an industrial and automotive coatings segment that accounts for 15% of overall revenues. By entering these markets, Asian Paints can reach a larger audience and strengthen its position against market swings. By offering expert painting, waterproofing, and color consulting services, the Home Solutions vertical expands its revenue streams and offers a comprehensive client experience.
Once more, this is Asian Paints’ source of income, which it supplements with other related goods including wallpaper, adhesives, and home décor items to create a one-stop shop for house renovation. Through e-channels, online promotion creates a new kind of shopping. For the sole purpose of enhancing the service provided directly to clients, this covers a larger net. Along with companies like Berger International and SCIB Paints, it operates in at least 14 countries. All of this greatly adds to the companies’ high standing and reputation as money-making machines and strengthens their position as the world’s leading manufacturer of paints and coatings.
Asian Paints’ net profit for the second quarter of FY25 was INR 694.64 crore, a 42.4% decrease from INR 1,205.42 crore the previous year. Revenue dropped from INR 8,451.93 crore to INR 8,003.02 crore, a 5.3% year-over-year decline.
Sales of goods and services brought in INR 30,727.7 crore for the company in FY23–24, a 2.6% rise over the previous year. Free cash flow increased by 18.5% to INR 3,571.0 crore, while EBITDA increased by 23.9% to INR 7,855.0 crore. At 41.2%, the Return on Capital Employed (ROCE) was an 8.4%
Asian Paints’ Special Selling Point
Asian Paints provides a range of paint and paint products, such as industrial coatings, ornamental paints, and home renovation solutions like color consultation and other expert painting services. Along with significant R&D expenditures, the company’s dedication to cutting-edge quality and innovations guarantees that it will provide future products that meet customer demands. Successful advertisements like “har ghar kuch kehta hai” draw on the brand’s iconic identity and have emotionally connected with consumers of all demographics. Asian Paints remains at the top of its game as a reliable market leader thanks to its excellent customer-facing strategy that targets customers across demographics and a dedication to sustainability, which is built on by more than 50,000 retail locations.
Asian Paints Strengths
- Market Leadership: Holds a 40% market share in India’s decorative paint industry and has established itself as a reliable brand.
- Extensive Network: Over 70,000 dealers nationwide cover even the most isolated areas of the country.
- Broad Product Offering: This specific brand makes sure that a variety of revenue streams are available by offering anything from industrial coatings to home décor to ornamental paints.
- Enhancing Innovation and Brand: New investments in R&D have been made for goods such as weather-resistant paints, which also sustains the company’s excellent reputation among consumers for paints’ general dependability and quality.
Asian Paints Weaknesses
- Dependency on Decorative Segment: Since decorative paints account for a sizable amount of corporate revenue, the business is reliant on fluctuations in demand in the real estate and construction sectors.
- High Operating Costs: Rising raw material input costs have an impact on profitability and necessitate strict cost control.
- Limited Presence in Industrial Coatings: In addition, Asian Paints’ reliance on the ornamentation channel is essentially nonexistent when compared to rivals such as Berger and Akzo Nobel in the industrial coatings industry, which limits the possibility for market expansion. In the decorative field, all of that was powerful.
Opportunities for Asian Paints
- Home Improvement: The company is currently concentrating on expanding into home improvement service areas, such as bathroom fitting and furnishings, where integrated solutions best satisfy the various needs of customers.
- Growing Rural Markets: Given the rising disposable income in rural areas, Asian Paints is anticipated to modify its offerings and marketing approach in order to effectively enter this new market.
- Sustainability efforts: Asian Paints may have additional chances to boost sales through green sales practices and sustainability efforts as more customers desire environmentally friendly goods.
- Extend International Market: Additionally, the corporation can enter new markets through partnerships and acquisitions in developing regions like Africa and Southeast Asia.
Asian Paints: Dangers
- A fierce competition: Asian Paints faces out against both domestic rivals like Berger Paints and global behemoths like PPG Industries and Sherwin-Williams. Lower profit margins and price pressure are the outcomes of this.
- Unstable Raw Material Prices: Unless the cost is passed on to the customer, fluctuations in raw material prices typically effect crude oil prices, which in turn have an immediate impact on production costs and margins.
- Economic downturns: Declining demand from the construction or real estate industries may result in reduced decorative paint use, which would essentially impact total revenues.
- Regulatory bottlenecks: These can be fatal when too strict environmental restrictions become expensive and impede their ability to operate efficiently, particularly when dealing with foreign nations.
Conclusion
In fact, Asian Paints’ business strategy has solidified the company’s dominant position in the worldwide paint industry. For both B2C and B2B sales, decorative paints such as wall finishes, enamels, woods, etc., account for about 85% of this revenue. Furthermore, when the company expands into industrial coatings and home renovations like interior design and waterproofing, this will further boost its earnings.
In addition to having a market share of more than 50% in India overall, the company has a large dealer network of more than 70,000 and has a strong focus on innovation and growth thanks to significant R&D expenditures. On the other hand, there are difficulties such reliance on the ornamental market and rivalry from other businesses in the sector. Asian Paints would be able to lead for extended periods of time and be well-positioned in terms of ongoing growth and market leadership with customer-oriented strategies, innovative technologies, and diversification.
