FINANCIAL MODELLING

Submitted to: Mr. Ved Beloskar

Submitted by:
HRISHI SHAH TY BCOM (H) B011
ISHA BANTHIA TY BCOM (H) A12
ISHITA SINGHAL TY BCOM (H) B013
ISHITA TIWARI TY BCOM (H) B014
KEDAR KORE TY BCOM (H) B015

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ABSTRACT
For the given project, group number 3 has selected the Paint industry. The following
five companies from this industry were selected:

1) Asian Paint
2) Nerolac Paint
3) Berger Paint
4) Akzo nobel
5) Shalimar Paint

After the selection of the industry, it, as a whole, is analysed. It’s contribution to the
GDP of the country, the threats and opportunities existing in the market, laws
affecting the industry, a brief PESTLE analysis, as well as the Government policies
relating to it are studied. Further, the companies were analysed with the help of
SWOT technique which involves a keen study of the strengths, weaknesses,
opportunities, and the threats these companies have.
This analysis was covered in two parts.
1) Quantitative analysis: In this part, the past data of the given companies is used
for ratio analysis and calculation of intrinsic value through different models.
These are, further, used for predicting future sales and cash flows.
2) Qualitative analysis: In this part, the E-I-C, i.e., Economy-Industry-Company
approach has been used. First the economy has been studied as a whole,
followed by the refinery industry of India, and concluded with the given
companies, individually.

All this information, collectively, has been used to make a buy, hold, or sell call on
the shares of these companies.

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ACKNOWLEDGEMENT
In this project, we learnt how an industry is analysed with the help of various
techniques. Individual companies have also been analysed and predictions for the
future have been made regarding the top five companies of the industry. This project
has, therefore, helped us in learning excel and its different functions along with ways
to analyse the data collected in these excel sheets. It has been a relevant topic for us
as finance and accounting students.
We would also like to thank Mr. Ved Beloskar for being a continuous support to us
and guiding us throughout.

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INDEX
Sr. No. Particulars Page No.
1 Introduction
2 Industry Analysis
3 Berger paints
4 Nerolac Paints
5 Akzonobel paints
6 Asian paints
7 Shalimar Paints
8 Biblography
9 Individual Contribution

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INTRODUCTION-
The automobile industry in India is world’s fourth largest, with the country currently being
the world's 4th largest manufacturer of cars and 7th largest manufacturer of commercial
vehicles in 2017. Indian automotive industry (including component manufacturing) is
expected to reach Rs 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. Two-wheelers
dominate the industry and made up 81 per cent share in the domestic automobile sales in
FY18. Overall, Domestic automobiles sales increased at 7.01 per cent CAGR between FY13-
18 with 24.97 million vehicles being sold in FY18. Indian automobile industry has received
Foreign Direct Investments (FDI) worth US$ 19.29 billion between April 2000 and June
2018.
Domestic automobile production increased at 7.08 per cent CAGR between FY13-18 with
29.07 million vehicles manufactured in the country in FY18. During April-November 2018,
automobile production increased 12.53 per cent year-on-year to reach 21.95 million units.
During April-November 2018, highest year-on-year growth in domestic sales among all the
categories was recorded in commercial vehicles at 31.49 per cent followed by 25.16 per cent
year-on-year growth in the sales of three-wheelers.
The passenger vehicle sales in India crossed the 3.2 million units in FY18, and is further
expected increase to 10 million units by FY20.1

Evolution of the Industry:

While the automotive industry in India started developing in the 1940s, distinct growth rates
started only in the 1970s. Cars were considered ultra luxury products, manufacturing was
strictly licensed, expansion was limited and there was a restrictive tariff structure. The decade
1985 to 1995 saw the entry of Maruti Udyog in the passenger car segment in collaboration
with Suzuki of Japan, and Japanese manufacturers in the twowheeler and commercial vehicle
segments. After economic reforms took place in India in 1991, it is only in the mid-1990s,
that the automotive industry started opening up. Thus, the mid-1990s are characterized by the
entry of global automotive manufacturers through joint ventures in India. Till the 1990s, the
automotive industry in India was primarily dominated by Maruti Suzuki, Tata Motors,
Hindustan Motors and Premier Padmini in the passenger car segment. Ashok Leyland, Tata
Motors and Mahindra & Mahindra dominated the commercial vehicle segment while Bajaj
Auto dominated the two-wheeler segment. After the year 2000, further policy changes were
introduced and focus on exports in the industry started increasing. Following that, the Core
Group on Automotive Research & Development (CAR) was set up in the year 2003 to
identify priority areas for Research and Development (R&D) in India. Contribution of the
automotive industry to GDP and employment in the 1990s Turnover of the automotive
industry in the year 1998–1999 was Rs. 360 billion and the industry provided employment to
over 10 million people directly and indirectly. The contribution of the automotive industry to
the GDP during the same period was 4 per cent rising from 2.77 per cent recorded in the year
1992–1993.3 Surge in road freight and passenger traffic generated demand for automobiles in

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1990s. The average rate of growth of freight and passenger transport on the road was the
highest compared to other means of transport such as rail, air and sea throughout the 1990s.2

Current Scenario-
Pune is the leading center for the automotive sector in India; as well as one of the top
automotive centers globally. In the past year alone, 3 massive new plants from General 27
Motors, Volkswagen and Mahindra & Mahindra were inaugurated here. The ChakanTalegaon
Belt is becoming one of the densest automotive clusters in the world.3

Sector Composition:

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Growth of Automobile Industry:
India is epected to emerge as the world’s largest passenger vehicle market by 2021.
Key trends –
 Favourable macroeconomic and demographic trends:
Currently, the automotive sector contributes more than 7 percent to India’s GDP. The
Automotive Mission Plan 2016–26 sets an aspiration to increase the contribution to 12
percent.  Rapid urbanization means the country will have over 500 million people living in
cities by 2030—1.5 times the current US population. Rising incomes will also play a role, as
roughly 60 million households could enter the consuming class (defined as households with
incomes greater than $8,000 per annum) by 2025. At the same time, more people will join the
workforce. Participation could reach 67 percent in 2020, as more women and youth enter the
job market, raising the demand for mobility. Mini cars and hatchback cars have been the
mainstay for the automobile industry in India, with share around 50 percent and growth of 6
to 7 percent between financial year 2014 and 2017. These segments will continue to maintain
a dominant position, but the majority of growth is expected to come from new segments such
as compact SUVs, sedans, and luxury vehicles.
 Continued Government focus on supporting the industry:
Through the Automotive Mission Plan, the National Electric Mobility Mission Plan
(NEMMP), and other initiatives, the government seeks to achieve two objectives—facilitate
long-term growth in the industry and reduce emissions and oil dependence. To tackle
emissions, the government seeks to bring local standards up to par with global standards,
enabling India to leapfrog from BS-4 to BS-6 emissions (the Euro 6 equivalent) by 2020. To
reduce dependency on oil imports, the government is promoting adoption of alternative fuels
through FAME2, which is an extension of the original FAME (Faster Adoption and
Manufacturing of Hybrid and Electric Vehicles) initiative. Where “FAME1” offered
incentives to electric vehicles (EV) and hybrid EV buyers, FAME2 is expected to incentivize
electrification of the public-transport fleet of buses and taxis, as well as facilitate demand for
all types of alternative fuel. Furthermore, to enable immediate adoption, a lower goods and
services tax of 12 percent is applied to battery electric vehicles, compared with 31 to 48
percent for other vehicles.
 Development of India as a manufacturing hub:

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The World Economic Forum ranks India 30th on the global manufacturing index, which
assesses the manufacturing capabilities of more than 100 countries. The government’s “Make
in India” initiative has played an important role in elevating country’s position. In the past
three to four years, India improved on nine out of ten parameters for ease of doing business.
After creating a strong value proposition in mini cars, India is gaining global recognition in
the compact sedan and SUV category.4

 Electrification:
Factors such as declining prices of batteries and supportive policies from the government are
stimulating the segment’s growth. In 2017, only 2,352 units of electric vehicles were
sold. However, early signs of growth are visible through an order for 10,000 electric vehicles
by the government’s energy-service company known as Energy Efficiency Services Limited.
Reduction in emissions and less dependency on oil imports are clear advantages of
electrification. According to industry experts, people carriers like buses, two- and three-
wheelers, luxury passenger vehicles, and light commercial vehicles could see maximum
penetration by 2030. This will be followed by other passenger vehicles, medium- and heavy-
commercial vehicles, and construction equipment, which will take longer for EVs to
penetrate. However, this trend requires careful planning and execution, as there are certain
risks associated with it. These include dependence on China for raw material, competitive
disadvantage in power electronics and battery manufacturing, and lack of infrastructure—for
example, there are fewer than 1,000 charging stations in India. Moreover, many consumers
remain wary of electric vehicles because of the cost, range anxiety, and lack of options.
 Centre for frugal Engineering:
For a long time, India has been known as a hub for frugal engineering. Many global
companies have used jugaad  (roughly translated, frugal engineering) to develop products that
cost a fraction but offer enough value to attract demand. 
 Hub for low cost, high-quality managerial talent:
 Indians are starting to occupy major positions across industries such as consumer goods,
automotive, pharmaceutical and banking, among others. Moreover, many such companies are
also leveraging local talent for driving innovation through R&D centres.5

4
https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/the-future-of-mobility-in-
indias-passenger-vehicle-market
5

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INDUSTRY ANALYSIS
1)Review of Government Policy
2)Contribution of the Industry to the GDP
The Indian paint industry is over 100 years old. Its beginning can be traced back to
the setting up of a factory by Shalimar Paints in Calcutta (now Kolkata) in 1902. Until
World War II, the industry consisted of small producers and two foreign companies.
The domestic paint industry is estimated to be a Rs 500 billion industry with the
decorative paint category constituting almost 75% of this market. The decorative
paint market includes multiple categories depending on the nature of the surface like
exterior wall paints, interior wall paints, wood finishes, enamels as well as ancillary
products like primers, putties, etc.
The industrial paint category constitutes the balance 25% of the paint market and
includes a broad array of segments like automotive coatings, marine coatings,
packaging coatings, powder coatings, protective coatings and other general industrial
coatings.
The paints sector is raw material intensive, with over 300 raw materials (50% petro-
based derivatives) involved in the manufacturing process. Since most of the raw
materials are petroleum based, the industry benefits from softening crude prices.
Under the make in India initiative, the government of India aims to increase the
share of the manufacturing sector to the gross domestic product (GDP) to 25% buy
2022 from existing 16%.
Manufacturing sector has the potential to reach US$ 1 trillion by 2025 and India is
expected to rank amongst the three growth economies and manufacturing
destinations of the world by 2020. These factors expected to significantly boost
industrial paint consumption.
Financial Year’19

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The first half of FY2018-19 was impacted by supply chain disturbances due to the GST
rate reduction from 28% to 18% leading to a bit of de-stocking in the distribution
channel. The longer festival season ensured that there was good growth in the paint
industry in the September-October period.
The paint industry experienced significant raw material price inflation during the year
with rising crude prices and depreciating currency and this led to a few rounds of
price increases by the industry players to shore up margins.
The Indian paint industry has been witnessing a gradual shift in the preferences of
people from the traditional whitewash to high quality paints like emulsions and
enamel paints, which is providing the basic stability for growth of Indian paint
industry. Besides, it is creating a strong competitive market, where players are
utilizing different strategies to tap the growing demand in the market for a larger
share.
Prospectus
In FY19, the paint industry has expanded at the rate of 12% in volume terms and
about 15% in value terms. Going forward, the growth shall be dependent on a
number of factors like disposable income in the hands of public, urbanization,
economic development, regular monsoons, raw material prices, growth in the
infrastructure and recovery in the real estate & automobile segment.
The market for India paints and coatings is expected to expand at a CAGR of 8.56%
during the forecast period of 2019 – 2024. Growing demand from the construction
industry, coupled with rising infrastructure activities, is driving the demand for the
market studied.
Government’s focus on infrastructure development would support the industrial
coatings demand. The volatility affecting critical raw materials including crude oil as
well as volatility on the exchange rates will need to be critically monitored to cushion
the impact on profitability.
Huge domestic market with a rapidly increasing middle class and overall population.
By 2030, Indian middle class is expected to have the second largest share in global
consumption at 17%.
The Indian paints and coating industry are expected to grow steadily in the short and
medium term on the back of strong growth in Indian economy. India’s young
population represents a huge opportunity as more young Indians join the workforce
and will have disposable income available.

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Decorative paints segment is expected to witness higher growth going forward. The
fiscal incentives given by the government to the housing sector have immensely
benefited the housing sector. This will benefit key players in the long term.
Export Earnings
The trade value of India's paint industry was over 57 trillion rupees in fiscal year
2019. The value of exported paint and allied products in the country amounted to
approximately about 18 trillion Indian rupees compared to the 39 trillion-rupee
import value. According to the source, these products come from both the organized
and small-scale sector.

3)Latest laws affecting the industry

4)PESTLE ANALYSIS
Political
The political components that may affect the productivity or odds of endurance of
the organization are very different. The political dangers shift from abrupt changes in
existing political systems to common turmoil to significant choices taken by the
legislature.

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For the paint industry the MAKE IN INDIA initiative and various infrastructural
development program will clear way for revenue generation. Under the make in
India activity, the government of India intends to build the share of the
manufacturing sector to the (GDP) to 25% purchase 2022 from existing 16%.
Government's attention on infrastructure advancement would bolster the industrial
coatings demands.
The paint industry was impacted by the GST rate changes from 28% to 18% which led
to a bit of de-stocking in the distribution channel.
Government policies towards housing for all have given a huge boost to this sector.
The fiscal benefits given by the government to the housing sector will benefit the key
players in the paint industry.

Economic
India is relied upon to observe solid financial development in 2020-2021, subsequent
to being risen as one of the potential players in the Global Economy. Likewise, there
is high expectation to see a development in the GDP and on account of Compounded
Annual Growth Rate or CAGR. As of now the Paint industry in India is estimated to be
around Rs 40,000Cr. The market for paints in India is relied upon to develop at 1.5
times to 2 times GDP development rate in the following five years. With GDP
development expected to be well beyond 7% levels, the best three players are
probably going to clock above industry development rates. The domestic paint
industry is assessed to be a Rs 500 billion industry with the decorative paint
classification comprising practically 75% of this market.
The paints segment is raw material escalated, with more than 300 crude materials
(half petro-based subordinates) associated with the manufacturing procedure. Since
the vast majority of the crude materials are oil based, the industry profits by
softening crude costs. The Indian paints and coating industry are relied upon to
develop relentlessly in the short and medium term on the rear of solid development
in Indian economy. India's young populace represents a huge opportunity as more
young Indians join the workforce and will have disposable income available.

Social
Social condition incorporates customs, conventions, convictions, qualities, tastes and
inclinations, purchasing and utilisation propensities for different social gatherings of
the general public. Each group has a few desires from business firms.
India is the second most populous nation in the world. With an increase in the
purchasing power of Indians they are shifting their preferences. The per capita

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consumption of paint despite everything is one of the lowest. This implies there is a
scope for the business to grow. This is one industry that has effectively built up the
huge little division together. This is so in light of the fact that higher and lower
sections of purchasers are developing quickly.
The paint industry is growing and one of the major reasons for its growth is the low
fixed capital employed for manufacture of paints. The working capital requirements
are very huge which is now satisfied by easy availability of funds from banks.
Several demographic indicators show favourable trends for the growth of paint
industry in India. These are: i) Rapid income growth: consumers have a greater ability
to spend, ii) Increasing Urbanization: larger urban population that value convenience,
coupled with the higher propensity of the urban consumers to spend, iii) Growing
young population: growth of the post-liberalization maturing population, with the
attitude and willingness to spend and iv) Spend now vs. save earlier: consumers are
willing to borrow for present consumption.
The buyer is updating from purchasing distemper to emulsions and from purchasing
paints to purchasing premium services, opening a totally new worth chain. What it
would mean for the business is that it should serve the purchaser now in more up to
date inventive ways. The buyer is prepared to address the cost and would be the key
factor driving this change.

Technological
Technological condition comprises of a) State of local or indigenous innovation, b)
Facilities for Re Paint is an exceptionally crude material serious ware, which has a
defensive capacity notwithstanding the improving one. c)Research and Development
d) Technical Collaborations and so on.
A normal scope of exchange deal, mechanical, car and support coating utilise well
900 crude materials. This has a consistent test for R and D endeavours in detailing
and reformulating items for better execution, cost decrease, new applications,
conceal improvement and misuse of new materials.
All the paint majors have tie-ups with worldwide paint pioneers for specialized skill.
Asian Paints has shaped a JV with PPG Industries Inc to support the car OEMs. Berger
has a progression of tie-ups for different purposes. It has a specialized tie-up with
Japanese major Nippon Paints to boost its OEM turnover.
Cross-border tie-ups in industry paints are turning into the demand for the day with
massive venture pushes in cars and shopper durables.
The lack of technology also affects the chances of Indian paint companies in setting
up units abroad.

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Legal
Ministry of Environment, Forest and Climate Change has put lead control regulations
on household and decorative paints, it has restricted the lead content up to 90 ppm.
The paint products are governed by FERA and MRTP act.
The paint industry is further affected by pollution control law, environmental law and
health and safety law.

Environmental
Paints, veneers and varnishes are among the compound ordinary items that have an
especially distinct impact on condition and wellbeing. Solvents, monomers,
mellowing operators, and biocides are just a portion of the segments of these items
that present the potential for genuine environmental and toxicological dangers
during their generation, fabricate, application, use, and extreme removal
Because of environment friendly preferences by paint buyers, recently paint
organizations have taken a few measures to advance condition benevolent paints.
For example, Asian paints upgraded its material handling and storage facility to
reduce material losses and eliminate effluent generation, it also improved its
filtration process resulting in higher filtration rates and lower losses.
VOC are gases emitted by various solids or liquids, many of which have severe health
effects solvents used in paints normally consist of high amount of VOC. Low VOC
paints improve air quality and improve urban smog. Nerolac is offering solutions and
products for lead-free and low-Volatile Organic Compounds (VOC) coatings.

5)Opportunities and Challenges

OPPORTUNITIES-
 Despite the current low per capita consumption, Indian paint and coatings
industry holds great promise for domestic and international paint
manufacturers operating in the country.
 Companies such as Kansai Nerolac and Asian Paints are likely to benefit from
domestic and global auto majors, which have long-term plans for the Indian
market.
 MAKE IN INDIA initiative and various infrastructural development program will
clear way for revenue generation.
 The fiscal benefits given by the government to the housing sector will benefit
the key players in the paint industry.
 Growing investments in the infrastructure and construction industry in
emerging economies is likely to act as an opportunity in the future.

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CHALLENGES-
 Nearly 30% of the 300 raw materials are petroleum-based derivatives. So, any
change in crude oil prices will lead to change in the prices of raw materials.
 The demand of decorative paints is cyclical in nature i.e. it increases for a
period, then decreases and after certain period of time it again increases thus
showing cyclical pattern. It happens because people generally have their
houses white-wash during festive seasons. Also, once houses get painted,
then it needs a white wash after 4-5 years.
 The majority of paints manufactured in India contain a large amount of lead,
mercury and chromium. These elements are very hazardous in nature and can
pose a threat to health of human beings. Now the policies are becoming very
strict and thus companies are required to come up with newer manufacturing
processes so as to produce paints with a low amount of VOC (volatile organic
compound) and minimal aromatic content.
 Import policies – The import policies play a very significant role in determining
the prices of paints because around 30% of the raw materials has to be
imported from foreign countries. So, any change in import tax regime will
have an impact on the costing.
 Exchange rate – Since the major raw materials are imported, any movement in
rupee-dollar prices is very critical and hence need to be closely looked. For
example, whenever rupee depreciates against dollar, the buyer has to shelve
out more money.
 Technology advancements – the paint industry is highly technology intensive
due to which small players find it very difficult to invest in newer technologies
and thus succumb to competition from foreign companies. Large players have
tied up with foreign companies and they are still dominant in the market.

6)Porters Five Forces Model

BARGAINING POWER OF BUYERS

Households and Industrial users are the main customer of this industry.
For housing requirements, the buyers are the building contractors who buy in bulk
and end people who paint their house. Customers are more price sensitive because
large no. of options are available for them and the decisions are based on quality,
price and differentiating factors like weather protection, environment friendly paints.
Industrial segment is low margin high revenue business and buyers of these
segments are knowledgeable about their needs. Therefore, price comparison is done

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effectively by the customers. However, the leading industrial paint suppliers have
their expertise in their favour, which limits the bargaining power of buyers.
Bargaining power of buyers as a whole is Medium.
THREAT OF NEW ENTRANTS

Paint market in India is dominated by few players, making it difficult for anyone
newly entering the industry to compete.
It is estimated that 18-20% of the total raw material used in the industry are
imported.
Working capital needed is high causing difficulty to local players and established
firms enjoy economies of scale.
Large players have good brand image and high-quality products and good
promotional activities to attract customers.
Threat of new entrants is Low
BARGAINING POWER OF SUPPLIERS

This industry has raw material intensive productions i.e. over 300 variety of RM are
used to make the final products like pigments, binders, additives, solvents, etc.
Titanium Dioxide is one of the key pigments used in the production of paints and is
facing a global supply shortage. Thus, supplier of this material has solid bargaining
power.
Other raw materials-crude derivatives-have high price fluctuations affecting industry
profits.
Bargaining power of supplier is Medium
THREAT OF SUBSTITUES

The overall development and modernization of the economy has led to emergence of
substitutes of the Paints like Lime wash in rural areas and decorative wallpapers in
Urban areas.
The overall buyer’s propensity to substitute is low as well as relative price
performance of decorative wallpapers is high.
Therefore, availability of substitute is Low
COMPETITIVE RIVALRY

About 80% of organised sector is contributed by top 3 players.

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Current market growth rate can provide ample room of opportunity for all the
players of the industry to flourish. There are still many sectors left to be explored by
the companies. For e.g. Asian paints is the only company to manufacture phthalic
anhydride- an important RM for paint industry.
A mere competition can be expected in an unorganised sector.
Therefore, competitive rivalry is Low.

Berger Paints

Berger Paints India Ltd is an Indian paint company based in India. The company is
headquartered at Kolkata and has 14 manufacturing units in India, 2 in Nepal, 1 each
in Poland and Russia. It has manufacturing units at Howrah and Rishra, Arinso, Taloja,
Naltoli, Goa, Devla, Hindupur, Jejuri, Jammu, Puducherry and Udyognagar. The
company has presence in 5 countries – India, Russia, Poland, Nepal and Bangladesh.
They have an employee strength of over 3,500 and a countrywide distribution
network of 25,000+ dealers.
VISION
To be the most admired Indian Paint & Coating Solutions company with globally
recognised competencies.
MISSION

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To maximise shareholder value by developing and delivering innovative and best
solutions for our customers, consistently outperforming our peers and providing a
Dynamic & Challenging work environment for our employees .

SWOT Analysis of company Berger Paints

Strengths
1. Basket of Products: Berger Paints offers a wide variety of products which
includes home to industrial paints. They also offer decorative paints option
which is the latest offering and in demand in the market. It acquired the
decorative paints unit from the Indian arm of US-based Sherwin Williams
Paints.
2. Brand Recognition: Being the second largest Paint manufacturer gives them a
healthy brand equity. Almost everybody recognises the brand and is familiar
with its products and offerings. Their rigorous campaigns have made them a
household name.
3. International Market: They have international operations in few countries that
include Nepal, Bangladesh, Russia, Poland, Cyprus and collaboration with
Becker of Sweden and Nippon paints of Japan.
4. Competent Leadership: The chairman is Kuldip Singh Dhingra and vice
chairman is Gurbachan Singh Dhingra who own a combined stake of 75%
stake in the company and have taken it to new heights making it second
largest paint maker trailing behind Asian Paints. The future leadership of the
company is also set. The reigns will be passed on to Simran and Kanwardeep
children of Kuldip and Gurbachan.
5. Loyalty: Customers are loyal to Berger Paints when it comes for re-painting
their homes.
6. Efficient Supply Chain: They have an efficient supply chain network
throughout the country. This includes seven manufacturing facilities, 85
depots, many regional outlets. They house around 2500 employees and a
massive network of 15000 dealers.
7. Growth: They have had a steady growth in their retail values (RSP).
8. Diverse Customer Base: Berger caters to a diverse customer base ranging from
households, industries from manufacturing to automobiles and nuclear power
plants.
9. Barriers to market entry: They have grown so big that they have created a
barrier for new competition to enter the market. Together with Asian Paints,
they control most of the market.
10. Diversification: They have expanded into the Construction Chemicals segment
and thus have expanded their scope for revenues and profits.

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 11. CSR: They have initiated green Horizon initiative that caters towards eco-
friendly paints by reducing wastage and conserving natural resources .

Weaknesses
1. High dependence on one segment: Berger Paints depends on one segment
heavily for its maximum revenue and that is the decorative segment. This is
not a long-term strategy and high growth rate cannot be sustained for long.
2. Bad brand image: Berger faced a lot of negative publicity due to lead found in
its paints. This kind of publicity taints the brand image of the company.
3. Limited Pricing Power: Due to a duopoly in the market they do not have the
pricing power in their hands. They need to keep their prices in check with the
market going paint prices.
4. Weaker distribution – Berger paints is known to have a weaker distribution
network as compared to Nerolac or Asian paints which is a major problem for
the company. It needs to ramp up its distribution network far and wide and if
needed, increase its manufacturing potential to match demand.
5. No premium alternative – Asian paints has conveniently targeted a unique
segment which gives high margin through their Asian paints Royale initiative.
Berger paints needs such initiative to get in touch with their customers and
have better sales and brand equity.

Opportunities
1. Marketing – Berger paints needs to up its game where Marketing
communications is concerned. Where Nerolac and Asian paints are advertising
left and right, Berger paints is left far behind and the frequency of
advertisement is lesser. With marketing, it will bolster its brand values and
create a demand from consumer end.
2. Market potential is untapped: Usage of paints in Indian households is very
low. There is a high scope of growth in this segment. Also due to urbanization
there is a growth in demand for paint.
3. New Launches: They can innovate and invest in their R&D to come up with
superior technology for the paint industry. They can also launch eco-friendly
paints and make it health friendly.
4. Emerging markets – Berger paints is currently present in 4 countries only but
because of its manufacturing base, it can expand to other emerging markets
too.
5. Diversification: Huge scope for business and product diversification is available
for Berger Paints.
6. Government Policies: Government is focusing on urbanisation,
industrialisation, increase in house and developing more tier 2 and tier 3
cities. This means there will be a huge demand for paints in the recent future.

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Threats
1. Raw material Prices: There are high fluctuations in the prices of the raw
materials of paint.
2. Changing government laws: Changing government laws may lead to new
companies in this sector. That means an increase in competition.
3. Competition eroding the margins – There is stiff competition amongst the top
three – Asian paints, Nerolac and Berger paints. Amongst these, Berger paints
seems to be left behind resulting in penetrative pricing and lesser margins.
This is a threat to Berger paints.

MOATs OF THE COMPANY

Quality Leadership has always been Berger’s trait. The company commands a
premium because of its quality and experience in the field. The competitive
advantage of the company comes through its superior technology, product quality
and better customer services.
 Technology forms a major part of its value chain. Berger Paints updates its
product using new technologies for e.g. the Business has forayed into various
new areas such as pipe coatings and anti-fouling coatings which involves
sophisticated technology and Automated Tools.
 The customer support team of the company involves dedicated customer
executive who have proved to resolve customer issues within dedicated time.
 One of the major deterrents for timely painting of homes is the inconvenience
involved in painting. Berger Express Painting endeavours to make painting a
hassle free by regular site supervision.
 This involves technical evaluation of painting requirements is 40 per cent
faster than traditional painting and can be carried out at the same cost.
 The company provides additional facility to give consumers a hassle-free
painting experience by Furniture shifting and covering

Quality of Management
Mr. Kuldip Singh Dhingra is an industrialist and promoter of the company. He has
over 50 years of experience in paint and related industries and his contribution to
the paint industry is well known and internationally acclaimed.
Mr Gurbachan Singh Dhingra is a promoter of the company and holds the position of
Vice- Chairman of the Board of Directors. He has over 50 years of experience in the

20
paint industry. He has practical experience in building and commissioning of many
paint factories and also has experience in the technical aspect of paint industry.
Mr Naresh Gujral is a non-executive Director of the company. He is a fellow member
of ICAI and founder of Span India Group, one of the leading exporters of high-end
fashion garments to Europe from India. He is an eminent industrialist and social
activist.
Mrs Bhasin is a non-executive of the company. She has wide professional experience
and was the COO of Tata Capital Ltd. Before that, she worked with YES Bank, ING
Barings Pvt Bank and ING Vysya Bank and Tata Administrative Services in senior
positions.
Mr Hoon is independent Director of the company. He is a graduate in Economics and
post graduate in Industrial Relations and Personnel Management. He has experience
in marketing, sales, organisational development, HR, supply chain and branch
commercial functions and served as Business Head of several businesses while in the
companies in which he had worked.
Ms Rishma Kaur is a whole-time director of the company. She holds B.Sc. in Business
Studies and has successfully led Business Development efforts in the company in
respect of Retail Business in addition to providing guidance and handling various
other matters such as Marketing and Corporate Affairs.
Mr Kanwardip Singh Dhingra is also a whole-time director of the company. He
specialises in Polymer Engineering and Minor in Chemistry. He gathered working
experience in the field of paints and specialty coatings in The Rohm and Haas
Company, USA. He successfully led business development efforts in matters such as
Projects and Procurements.
The board of the company consists of members who are adequately qualified and
experienced to contribute in the Paint Industry

BUY, HOLD OR SELL

Intrinsic Value Range
BERGER PAINTS INDIA LTD
  Lower Higher Analysis
4,0 6,9 Over-
Dhandho 15 28 priced
9,6 15,7 Over-
Ben Graham 37 59 priced
4,9 Over-
DCF 88   priced
Expected Return 9,9   Over-

21
 57 priced
Current Market 57,2
Cap. 15  

According to Dhando, DCF, Ben Graham and Expected Return models, the intrinsic
value of Kansai Nerolac Paints Ltd is less than the current market capitalization.
Hence, it is overvalued and an investor must sell the stock, as it is likely that the
prices will fall in future, making it unprofitable for the investors.
But at the same time company is coming up with various new projects. Here are
some top news headlines:
1.) Berger Paints India Ltd NSE 1.99 % today said it would invest Rs. 280 crores
till 2021 to augment capacities in Uttar Pradesh and Maharashtra.
2.) Another Rs 80 crore would be spent for the second-phase expansion at
Jejuri near Pune for automotive, industrial and protective coatings, he told
reporters.
The unit will have a paints capacity of 27,000 KL per annum and 12,000 MT
of resins.
The company will also add an additional powder coating line at Jejuri with
an estimated capacity of 325 MT per month.
3.) Dhingra said he is optimistic about the Rs 2,000-crore automotive refinish
paints market. He said Berger Paints had encouraging trials out of the MoU
with Rock Paint of Japan, and the process of forming a joint venture for
automotive refinish paints, was underway.
The Kolkata-based company will hold 51 per cent in the proposed JV, while
Rock Paint will own the rest.
The long term plans of the company seems lucrative and will likely have a
positive effect on the company’s shares. Therefore, weighing Quantitative
and Qualitative data, the investor should HOLD the position in the
company.
References
https://www.bergerpaints.com/

https://www.indiainfoline.com/markets/sector-valuation

http://www.moneycontrol.com/stocks/data-bank/standalone/paintsvarnishes/1/mkt-data/pe-ratio

22
Kansai Nerolac Paints

Kansai Nerolac Paints Limited (KNPL), erstwhile Goodlass Nerolac Paints ltd, is the
second largest paint company in India and is the leader in industrial segment. The
company has five strategically located manufacturing units all over India and a strong
dealer network across the country. The company manufactures a diversified range of
products ranging from decorative coatings for homes, offices hospitals and hotels to
sophisticated industrial coating for most of the industries. The company markets its
products under the brand name Nerolac, Glossolite, Goody, Allscapes, Excel in
decoratives.

KNPL is the Indian subsidiary of Japan based Kansai Paints Co. Ltd. KNPL has 5
factories located in Jainpur (UP), Lote (Maharashtra), Bawal (Haryana), Hosur (Tamil
Nadu) and Sayakha (Gujarat). The company has a state-of-the-art R&D facility in
Mumbai. KNPL also has operations in Nepal and Sri Lanka through Joint Venture with
Kansai Nepal and Capital Holdings Maharaja Group respectively.

23
Quality of Management

Vision Statement

“We design solutions that protect, inspire and touch lives everyday”.

Mission Statement

“We leverage superior technology to contribute to our Customers and Society, in a

sustainable manner, with innovative Products and Services, through a competent
workforce, built on a culture of Customer Focus, Integrity and Respect to our
Stakeholders”.

Company Core Values

Response- Committed to provide the best services to customer driven by quick

turnaround time, attitude and high customer orientation

Innovation- Constant Endeavor to drive innovative approach throughout the

organization

Team Orientation- Open and lateral channels of communication within teams and
between cross-functional teams to encourage ideas and information

Entrepreneurial- Drives the originality of thinking, practicality of execution and the

responsibility to see your idea through

Speed- Focus on Response in hours and with a concrete deadline. Combination of

speed, flexibility, dynamism in a stable frame to provide agility to the organization

 Key Managerial Personnel

Consequent to the appointment of Mr. Anuj Jain as a Whole-time Director with effect
from 1st April, 2018, the Company has the following Key Managerial Personnel in
terms of Section 203 of the Act : Mr. H. M. Bharuka, Vice Chairman and Managing
Director, Mr. Anuj Jain, Executive Director, Mr. P. D. Pai, Chief Financial Officer and
Mr. G. T. Govindarajan, Company Secretary.

SWOT Analysis

STRENGTHS

 Huge product range – Kansai Nerolac Paints offers huge product types. The

main hallmark of the company is the technology innovative product. The
company provides unique eco-friendly products. The main products of

24
 this brand are decorative paints – interior and exterior wall paints, wood and
metal surface paints, automotive coatings – top, clear coats, touch up paints,
heat resistant paints, auto refinishing products, underbody paints, and PVC
sealants, performance coatings.
 Large paint company – Kansai Nerolac Paints is one of the largest coating
companies in India and it is also a market leader in powder coating.
 Tech-savvy – The technology edge of the company has helped to innovate and
serve the customers in a better way.
 Excellent Research and Development – The main factor of Kansai Nerolac
Paint is its excellent research and development. The company gives more
focus on research and develops new quality products to meet the customer’s
requirement.
 Branding and Marketing strategy – Kansai Nerolac Paint’s excellent branding
and marketing strategy has led them to the top in the industry and to achieve
more visibility among the people.
 Top customers in the list – The company being great market leaders in the
automotive category have served many top customers from the automotive
sector like Toyota Kirloskar, Maruti Suzuki, Tata Motors, GM, Honda,
Yamaha, Volvo, Ashok Leyland, etc.
 Strong supply chain – The Company has an excellent supply chain network to
make the products available to customers.
 Celebrity ambassadors – To add to the company’s success, Kansai Nerolac
Paint is proud to have celebrities as its brand ambassadors.
 Awards and Achievements – Kansai Nerolac Paints has received many awards
across various functions.

WEAKNESSES

 Change in market demand – The decorative paint industry is a look and feel

one, where the customer’s taste and perception keep changing quite often. The
products become outdated soon with the change in trend. This is a big
weakness for the brand as there will be issues in product planning and
inventory.
 The Business model of Kansai Nerolac Paint – Kansai Nerolac Paint’s business
model can be copied easily by its competitors. Hence the company will have to
build a platform model where they can integrate vendors, suppliers, and end
users.
 Revamp supply chain and logistics – The business model of the Basic Material
industry finds its way to flourish using the Internet and Artificial Intelligence.
Hence owing to this, Kansai Nerolac Paints supply chain has to be in a robust
way that is extremely expensive.

OPPORTUNITIES

25
  Scope in new products – Kansai Nerolac Paints has a good scope to develop
new products with PODs, which highlights the brand in the midst of a
competitive environment.
 Enhanced technology innovations – Technologies increases industrial
productivity, thereby allowing suppliers to manufacture many types of
products and services. This provides an opportunity to Kansai Nerolac Paints to
consider undertaking new products.
 Online opportunities – Online services are increasing and customers tend to
avail them quite often. This also provides new offerings to the customers.
 Low Inflation rate – Low inflation rate brings out more stability in the market.
It provides credit at a low-interest rate to the company’s customer. This
increases the consumption of the company’s products thereby providing them
with huge opportunities.
 Economic Policies- Reduction in GST rates for paints is a step in the right
direction for the industry as a whole. In addition a thrust on infrastructure and
housing is beneficial for the industry.
 Environment consciousness-The growing consciousness on environment is an
opportunity. The Company has Healthy Home Paints as a central theme.
Product and process innovations introduced have helped to curtail energy
consumption on customer production lines. Super durable coating solutions
have been helping its customers to enhance life of their products. In its
operations, the Company is taking advantage of renewable energy.

THREATS

 Variations in Government rules – Strict Government rules and regulations with

regards to the quality of the products and manufacturing facilities is a big
threat to the company’s business. The environment policies are given more
importance and the company will have to take care of that on regular basis.
 Scarce in raw material – Scarcity in raw material and instability in prices is also
a huge threat to the company. The production is very much dependent on the
raw materials; hence it gets affected when there is unavailability in the raw
material or when the prices keep fluctuating.
 Geopolitical situation- Trade frictions are beginning to materialize, with
the USA and China locked in a retaliatory trade war. In addition, there is the
threat of sanctions, which has an impact on crude. India, being an integral part
of the global trade network, will have to remain wary. 
 New Competitors- New Competitors are entering the Indian Paint Market.
KNPL endeavors to be proactive in countering any challenges that may arise
due to increased competition in the market.
 Climate change- Indications of a late monsoon, on the lines of the previous
year, point towards a slower than normal rural economic growth. A normal
monsoon can aid not only the agricultural sector but the rural economy.

26
MOATS i.e. competitive advantage

Quality- Nerocoat’s extensive product line has a reputation for providing quality that
ranks with the best in the industry.
Batch to batch consistency- When it comes to consistency, Nerocoat products
exceed the industry norm by a wide margin
Faithful color matching- Precision color matching is their specialty. Give them your
difficult colors.
Problem solving - Since pioneering the production of decorative powder coating in
the country, Nerolac has found effective solutions to hundreds of difficult coating
problems.
Customer service- Customers can depend on Nerolac’s total package of efficient
order handling, prompt delivery and attention to details. It adds up to superior
customer service.
Technical support- Their specialists will roll up their sleeves to help make the
customers equipment run at their best and solve any online problems.
Prompt and flexible responses- They know that when customers need service, they
need it now. Prompt attention is one of their priorities. This is the best downtime
prevention insurance you can buy.

27
Intrinsic Value Range
KANSAI NEROLAC PAINTS LTD

  Lower Higher Analysis

Overprice
Dhandho 11,316 19,736 d

Overprice
Ben Graham 13,240 21,977 d

Overprice
DCF 14,415   d

Overprice
Expected Return 9,055   d

Current Market Cap. 27,296

 According to Dhando, DCF, Ben Graham and Expected Return models, the
intrinsic value of Kansai Nerolac Paints Ltd is less than the current market
capitalization. Hence, it is overvalued and an investor must SELL the stock, as
it is likely that the prices will fall in future, making it unprofitable for the
investors.
 Since all models show the same results, it is safe for the investor to SELL the
stock. However, one might even decide to HOLD the stock for long-term
purposes, as the company seems to be doing well. It has maintained its
margins quite consistently and its revenues show an increasing trend
consistently.

References
https://www.nerolac.com/industrial-paints/powder-coatings/nerocoat-advantages.html
https://www.mbaskool.com/brandguide/industrial-products-and-chemicals/1406-kansai-
nerolac-paints.html https://www.owler.com/company/nerolac

28
 AKZO NOBEL Ltd.

AkzoNobel India creates everyday essentials to make people’s lives more liveable and
inspiring, present in India for over 60 years. Akzo Nobel India Limited formerly ICI
India Ltd is into Coatings business. The Coatings business has two main components:
Decorative Paints and Performance Coatings and is served by both organised and
unorganised sectors. As a leading paints and coatings company, they supply essential
protection and essential colour to industries and consumers. Backed by a pioneering
heritage, their innovative products and sustainable technologies are designed to
meet the growing demands of our fast-changing planet, while making life easier.
Ranked as a leader in sustainability, they are dedicated to energising cities and
communities while creating a protected, colourful world where life is improved by
what they do.
AkzoNobel supplies quality products for every situation and surface, including paints,
lacquers and varnishes.The company sells decorative paint under the well-known
brand Dulux. Akzo Nobel India is a subsidiary of Akzo Nobel N.V. a Dutch
multinational company. Dulux Velvet Touch 'Pearl Glo', Dulux Velvet Touch 'Trends',
Dulux Weather Shield, Dulux Weather Shield Max, Dulux Weather Shield Ultra Clean,
Dulux Weather Shield Clear, Dulux Weather Shield Tex are some of the products
offered by the company. AkzoNobel currently has 7 to 9 percent market share.
The Board of the company normally meets once in a quarter to review the financial
results and operations of the Company. In addition, the Board also meets as and
when necessary to deal with specific matters concerning your Company.

29
MISSION STATEMENT-At AkzoNobel, we put sustainability at the heart of what we
do. Sustainability also encompasses the social and cultural aspects of the wider
society that we are all a part of. The AkzoNobel art collection helps maintain and
preserve our international cultural heritage for future generations. We aim to create
a stimulating working environment with our collection, one in which art and business
are in dialog with each other. Like two communicating realms. The collection is a
source of innovation and creative reflection. It’s also an expression of AkzoNobel’s
corporate social, cultural and social responsibility.

Product portfolio-

1) Interior paints-
 Dulux diamond
 Dulux life master
 Dulux x-pert
 Dulux accents
 Dulux kitchen and bath
 Glidden ultra
 Glidden pro
 Glidden speed wall

2) Exterior paints-
 Diamond exterior
 Weather guard maximum
 Weather guard
 Weather guard decraflex
 Dulux accents
3) Wood stains-
 Flood wood stains
 Wood prise semi-transparent deck stain
 Wood pride solid deck stain
 Oil and acrylic siding stain
 Acrylic solid siding stain
4) Primers-
 Dulux life master primer
 Weather guard exterior primer
 Dulux x-pert primer
 Glidden pro primer
 Glidden speed wall primer
 Glidden ultra-interior primer
5) Speciality paints

30
  Water based floor enamel
 Dulux metal clad
 Dulux Velvet Touch 'Pearl Glo'
 Dulux Velvet Touch 'Trends'
 Dulux Weather Shield
 Dulux Weather Shield Max
 Dulux Weather Shield Ultra Clean
 Dulux Weather Shield Clear
 Dulux Weather Shield Tex

Competitive advantage of the company

1) Akzonobel through its innovation and value selling tries to give their
customers wide variety of products to chose from and competitive advantage
through product portfolios designed to bring tangible benefits and deliver
positive social and environmental impact with a priority of at least a fourth of
our product portfolio consisting of eco-premium solutions
2) Resource productivity – they are creating a culture of care for all materials
used, eliminating waste and reducing variable cost. Increased resource
productivity in their operations and supply chain makes them more
competitive and sustainable.

3) Their Planet Possible strategy and the new United Nations Sustainable
Development Goals are a perfect match – guiding the way to short-term, mid-
term and longer-term value creation.
4) Continuous R&D with international facilities and minds coming together has
helped them to stay at par with competitors.
5) The company is not only targeting to eliminate carbon emissions in their
operations but also help their entire value chain to reduce carbon foot print
and become net positive with product solutions that avoid emissions.

6) In 2016, they initiated a range of partnerships which have resulted in a

significant increase of biomass use, bio-steam production and the use of
recovered materials. This has improved their performance in terms of
reducing carbon emissions with their suppliers, with their customers and in
their own operations.

7) More than half their products provide general sustainability benefits, such as
improved energy and material efficiency. They are also driving up the
percentage of their revenue which is eco-premium – innovative products
ahead of the mainstream product offerings – giving them a competitive
advantage in terms of economic, environmental and human value creation.

31
SWOT ANALYSIS

STRENGTHS-
 Wide variety of products ranging from paints to industrial chemicals to organic
chemicals provides them scope of diversification compared to other
conventional paint companies.
 Continuous R&D with international facilities and minds coming together has
helped them to stay at par with competitors.
 Product innovation and brand building focus has helped dulux to increase its
brand recall.
 Close look on their competitors by doing time-to-time surveys regarding the
companies entering into the market.
 Better customer satisfaction level.
 Low prices as compared to any other competitors and affordable prices.
 Better HR policy, proper recruitment system and high wage rate.
 Availability of large variety of products in a single company.

Weakness-
 In decorative paints Industry Customer tastes and perceptions change very
fast and products may become obsolete with change in trends, hence
production planning and inventory problem
 Large working capital required.

Opportunities-
 Growing demand of branded quality products
 Mergers and joint venture
 Moving in new countries, international market setup.
 A developing market such as online
 Increasing customers and brand reputation day by day globally.
 With more advertising like Asian paints, Nerolac and Berger Paints they can
create more brand awareness for their lesser known products.
 Being an international company and financially strong company, they can use
their muscle power to enter potential markets in a strong way
 MAKE IN INDIA initiative and various infrastructural development program will
clear way for revenue generation.
 The fiscal benefits given by the government to the housing sector will benefit
the key players in the paint industry.
 Growing investments in the infrastructure and construction industry in
emerging economies is likely to act as an opportunity in the future.

32
 Threats-
 Nearly 30% of the 300 raw materials are petroleum-based derivatives. So, any
change in crude oil prices will lead to change in the prices of raw materials.
 The demand of decorative paints is cyclical in nature i.e. it increases for a
period, then decreases and after certain period of time it again increases thus
showing cyclical pattern. It happens because people generally have their
houses white-wash during festive seasons. Also, once houses get painted,
then it needs a white wash after 4-5 years.
 The majority of paints manufactured in India contain a large amount of lead,
mercury and chromium. These elements are very hazardous in nature and can
pose a threat to health of human beings. Now the policies are becoming very
strict and thus companies are required to come up with newer manufacturing
processes so as to produce paints with a low amount of VOC (volatile organic
compound) and minimal aromatic content.
 Import policies – The import policies play a very significant role in determining
the prices of paints because around 30% of the raw materials has to be
imported from foreign countries. So, any change in import tax regime will
have an impact on the costing.
 Exchange rate – Since the major raw materials are imported, any movement in
rupee-dollar prices is very critical and hence need to be closely looked. For
example, whenever rupee depreciates against dollar, the buyer has to shelve
out more money.
 Technology advancements – the paint industry is highly technology intensive
due to which small players find it very difficult to invest in newer technologies
and thus succumb to competition from foreign companies. Large players have
tied up with foreign companies and they are still dominant in the market.

QUALITY OF MANAGEMENT

Mr Lakshay Kataria (CFO and Wholetime Director)- Lakshay Kataria (Lakshay) is the
Chief Financial Officer and Wholetime Director of the Company since February 2019.
Lakshay is a rankholder Chartered Accountant from ICAI and Bachelors in Commerce
from SRCC, Delhi University. He has 17 years of experience with reputable
organisations like Unilever, GSK Consumer, Microsoft and 21st Century Fox (Star
India). Lakshay´s experience ranges across Finance and Commercial roles including
business partnering, finance controllership, investor relations, commercial
management, treasury and M&A.

Mr Hemant Sahai (Independent Director)- Hemant Sahai (Hemant) joined the Board
of the Company as an Independent Director in August 2018. He is the Chairman of

33
the Stakeholder Relationship Committee. Hemant is the Founding Partner of the law
firm HSA Advocates. Born in 1963, Hemant has done his B Com (H) and LLB from
Delhi University. He has served as adviser to several working groups and committees
formed by top government bodies/ institutions including certain extra ministerial
policy advisory bodies from time to time. He was recently recognised as one of the
top 100 lawyers in India by a leading international publication, IBLJ and was also
awarded the “Infrastructure Lawyer of the Year” by a reputed international legal
publication, “American Lawyer´s Emerging Markets Awards”, in Singapore .

Mr Arvind Uppal (Independent Director)- Arvind Uppal (Arvind) joined the Board of
the Company as an Independent Director in April 2011. He is the Chairman of the
Nomination and Remuneration Committee. Arvind is a Chemical Engineer from IIT,
Delhi and holds a Masters in Business Administration from the Faculty of
Management Studies, Delhi. He has also attended a programme for Executive
Development at IMD, Lausanne, Switzerland.

Mr Oscar Wezenbeek (Non Executive Director)- Oscar Wezenbeek (Oscar) joined the
Board of the Company as a Non Executive Director in May 2019. Oscar is currently
the Managing Director for AkzoNobel Decorative Paints in South East & South Asia
(SESA). Over the course of his 28-year career with AkzoNobel Group, he has
successfully led various portfolios in the coatings and automobile departments. He is
a passionate people manager, driving customer focus and performance improvement
in all business areas. Other areas of his expertise include market research, business
planning, strategy development and innovation

Mr Raj S Kapur (Independent Director) -Raj S Kapur (Raj) joined the Board of the
Company in March 2014. Based in Gurgaon, Raj is the owner of Country Strategy
Business Consultants and in his professional capacity, he advises companies on their
geographic expansion and market development strategies. He has in-depth technical
and business knowledge of the chemicals industry and more specifically,
performance coatings and specialty chemicals. He is passionate about helping
international companies build their business in India and then leveraging the Indian
capabilities to strengthen their Global position.

Mr Rajiv Rajgopal (Managing Director)- Rajiv Rajgopal (Rajiv) was appointed as the
Managing Director of the Company from November 2018. Rajiv is a Chemical
Engineer from University of Mumbai and MMS (Marketing) from SP Jain, Mumbai of
the 1993 Batch. He has attended programs at INSEAD Singapore and Harvard
Business School and Centre for Creative Leadership. He joined AkzoNobel in 2013 as
Head of Sales and Marketing, Decorative Paints and was appointed Country General
Manager India in 2014. Rajiv has been the Regional Director, Performance Coatings,
Middle East & Africa since January 2017 and serves on the Boards of several

34
AkzoNobel group companies in the Middle-East and Africa. Prior to joining
AkzoNobel India, he worked as the CEO - Broadband & Data at Airtel India. He has
also worked with multinational organizations such as Hindustan Unilever and
BP/Castrol India primarily in Sales, Marketing and Business Leadership roles.

Ms Kimsuka Narsimhan (Independent Director) -Kimsuka Narsimhan (Kimsuka) joined

the Board of the Company as an Independent Director in January 2015. She is the
Chairperson of the Audit Committee. Kimsuka is the Chief Financial Officer, Asia
Pacific, Kimberly-Clark Corporation. A Chartered and Cost Accountant, Kimsuka was
earlier with PepsiCo in the India business as also the Asia/Middle East/ Africa Sector.
Prior to PepsiCo, she was with Unilever in various roles across the Home & Personal
Care and Foods businesses, in India, UK and Singapore. She also serves as an
independent Director on the boards of Astra Zeneca Pharma India Ltd and Bharti
Airtel Limited.

Mr Amit Jain (Chairman)- Amit Jain (Amit) is the Chairman of the Company since 15
August 2017. Earlier, he served as the Managing Director of the Company from 2009-
2013 and continued on the Board as a NonExecutive Director from Jan 2014 post his
appointment as Managing Director for AkzoNobel Decorative Business for North &
West Europe. He is currently the Managing Director of L´Oreal India Private Limited.
He commenced his career with the Company in 1987, where he managed a diverse
set of responsibilities in sales & marketing. He subsequently served in business
leadership roles with Coca-Cola and Viacom & MTV across Asia. He is an MBA from
the Faculty of Management Studies, Delhi and has done Advanced Management
from the Wharton Business School. An avid reader and golfer, he actively supports
wildlife conservation and literacy for under-privileged children.

Conclusion

Intrinsic Value Range

AKZO NOBEL INDIA LTD
  Lower Higher market  

35
 cap
1,4 2,5
Dhandho 61 12 9401 overpriced
3,9 5,6
Ben Graham 12 83 9401 overpriced
1,7
DCF 98   9401 overpriced
4,2
Expected Return 20   9401 overpriced
Current Market 9,40
Cap. 1

 As per DHANDHO IV, BEN GRAHAM, DCF and EXPECTED RETURN model the
intrinsic value of the company is less than the current market capitalization.
Hence, it is overvalued and an investor must sell the stock, as it is likely that
the prices will fall in future, making it unprofitable for the investors.
 There is no news of any investments or long-term plan of the company in the
near future.
 So, based on the values derived with the help of the aforesaid models any
investor who has the stocks of this company should sell the stocks and those
who don’t have the stock should refrain themselves from buying the same
REFERENCES
https://www.akzonobel.com/en/about-us/how-we-operate

http://www.capitalmarket.com/Company-Information/Information/About-Company/Akzo-
Nobel-India-Ltd/266?Heading=Akzo-Nobel-India-Ltd&cocode=266

https://www.comparably.com/companies/akzo-nobel-worldwide/mission

BIBLOGRAPHY

36
INDIVIDUAL CONTRIBUTION
HRISHI SHAH B011-
ISHA BANTHIA B012-
ISHITA SINGHAL B013-
ISHITA TIWARI B014- pestle analysis, opportunities and
challenges and AKZONOBEL ltd
KEDAR KORE B015-

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