Is Rs 70k cr paints sector investment worthy anymore? ππ
There were 8 main players. Now 4 more have emerged in 4yrs!
Here are the details behind the 3 questions that every investor should ask π
There were 8 main players. Now 4 more have emerged in 4yrs!
Here are the details behind the 3 questions that every investor should ask π
At FY23 end, organized market is dominated by 2 players.
1οΈβ£ @asianpaints (AP) - 60% share
Investing Rs 8.75k cr over 3yrs to expand capacities by a massive 52%
1οΈβ£ @asianpaints (AP) - 60% share
Investing Rs 8.75k cr over 3yrs to expand capacities by a massive 52%
2οΈβ£ @BergerPaintsInd - 20% share
Recently expanded capacity by a massive 33% with a new plant in UP.
Coming up: Aa new plant in Odisha & its 3rd one in WB
Letβs check out the 4 newbies meanwhile π
Recently expanded capacity by a massive 33% with a new plant in UP.
Coming up: Aa new plant in Odisha & its 3rd one in WB
Letβs check out the 4 newbies meanwhile π
1οΈβ£ Grasim (@AdityaBirlaGrp)
π Investing a massive Rs 10k cr in one go to build 6 plants in HR, PB, WB, KT, MH & TN, which will cover pan-India supplies!
π Will take its capacity to 75% of what AP has built to date
π Investing a massive Rs 10k cr in one go to build 6 plants in HR, PB, WB, KT, MH & TN, which will cover pan-India supplies!
π Will take its capacity to 75% of what AP has built to date
π If we include APβs 52% expansion, Grasimβs capacity will still be half as big.
π Betting on its distributors who sell Birla wall putty & waterproofing solutions
π Betting on its distributors who sell Birla wall putty & waterproofing solutions
2οΈβ£ @PidiliteInd
π With AP entering its mainstay biz of adhesives (Fevicol), Pidilite has launched its paint brand, βHaishaβ
π Aims to tap on its vast dealer network, gauge the mkt response over 3-6 months & then expand in a big way
π With AP entering its mainstay biz of adhesives (Fevicol), Pidilite has launched its paint brand, βHaishaβ
π Aims to tap on its vast dealer network, gauge the mkt response over 3-6 months & then expand in a big way
π Note: Pidilite is led by Bharat Puri, who has worked at AP for 16 yrs. He knows this territory.
This is a serious bet
This is a serious bet
3οΈβ£ @JKCementIndia
π Acquired 60% stake in Acro Paints for Rs 153 crore in Jan β23, with the remaining 40% to be acquired in 12 mnths. Acro has 2 factories in Rajasthan
π Acquired 60% stake in Acro Paints for Rs 153 crore in Jan β23, with the remaining 40% to be acquired in 12 mnths. Acro has 2 factories in Rajasthan
π JK now aims to leverage its 1L wall putty & white cement distributors
π This comes after AP entered white cement biz via a JV
π This comes after AP entered white cement biz via a JV
4οΈβ£ @JSWPaints
π Has 2 factories near existing JSW steel mills, which are also its biggest customers for the industrial paints
π Investing Rs 750 cr for a 3rd plant for North/Central India demand
π Did ~Rs 2k cr sales in FY23 & now raising $100mn at $2bn valuation
π Has 2 factories near existing JSW steel mills, which are also its biggest customers for the industrial paints
π Investing Rs 750 cr for a 3rd plant for North/Central India demand
π Did ~Rs 2k cr sales in FY23 & now raising $100mn at $2bn valuation
Together, Rs 20k cr is being invested in a Rs 70k cr mkt. Is the mkt growing that fast? Nope! ββ
And, there is a bigger reason why I am even more worried about investing here.
And, there is a bigger reason why I am even more worried about investing here.
π 3/4 newbies (Grasim, Pidilite & JK) are betting on their existing dealer networks for wall putty, white cement & water proofing solutions etc
π But most are also existing dealers for other paint brands. Eg- APs' 80k dealers sell Birla & JKβs wall putty & Pidiliteβs DrFixit
π But most are also existing dealers for other paint brands. Eg- APs' 80k dealers sell Birla & JKβs wall putty & Pidiliteβs DrFixit
In my opinion, it's bloodshed ahead π
Thus, there are 3 ques that investors must think over π
Will oldies continue to dominate? How?
Will competition among the old & new make low margins a new normal?
Could there be M&A action with newbies acquiring oldies or vice versa?
Thus, there are 3 ques that investors must think over π
Will oldies continue to dominate? How?
Will competition among the old & new make low margins a new normal?
Could there be M&A action with newbies acquiring oldies or vice versa?
Biz News+ WA group:Β openinapp.co
PS: I post one such deep-dive daily 11am. If interested, doΒ follow!
Note: This is a personalΒ #investmentΒ thesis & not aΒ #stockΒ /Β #stockmarketΒ rec.
#AsianPaints #Stocks #BergerPaints
PS: I post one such deep-dive daily 11am. If interested, doΒ follow!
Note: This is a personalΒ #investmentΒ thesis & not aΒ #stockΒ /Β #stockmarketΒ rec.
#AsianPaints #Stocks #BergerPaints
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