Name: Vinit Prasad – Asian Paints_______________________________

Please select any Listed Company of your choice and provide your commentaries to the below mentioned questions ( refer next
page).

Notes:
(1) Kindly note that your analyses should not exceed beyond 1 page – as such request you to provide crisp and succinct analysis.
(2) Request you to maintain the font as “Times New Roman” with font size as 10

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 (1) What are the Competitive Strengths of the chosen company?
Asian Paints display a formidable position in the global paint industry, standing as India’s earliest major paints company and
the second largest in Asia, with a notable seventh global ranking. This robust market presence is supported by a diverse brand
portfolio featuring significant names like Asian Paints Berger, Apco Coatings, and Taubmans, genrate consumer trust and
loyalty. The company's commitment to innovation is evident through its substantial investment of INR 1,080 million in
research and development during FY2023. With 25 patents filed and a team of over 240 scientists, Asian Paints consistently
introduces superior products, maintaining a competitive edge in the market. The company strategically operates in 14 countries
with 27 manufacturing facilities globally, including 17 outside India, contributing to its expansive territorial presence and
global market share. Further diversifying its business, Asian Paints has ventured into the home improvement sector through
Sleek. The company's focus on environmentally friendly products aligns with sustainability trends, reinforcing its industry
leadership. With a decentralized manufacturing approach and a strategic Research and Technology Laboratory, Asian Paints
exhibits operational excellence and a commitment to staying at the forefront of technological advancements.

(2) What are the Key Risks that you can envisage for the chosen company?
Asian Paints struggle with significant risks, particularly the impact of strict environmental regulations on lead content, leading
to costly modifications for compliance. Recent scrutiny over high lead content underscores the necessity for heightened
product standards to align with evolving regulations. The dynamic chemical marketplace raises competition, with the potential
for technological advances by competitors to impact revenue growth. To stay competitive against rivals like Kansai Nerolac
Paints and Berger Paints, Asian Paints must consistently innovate across pricing, promotion, and distribution strategies.
Challenges arise from the fluctuating prices and availability of petrochemical-derived raw materials, with weather conditions
and supply chain disruptions influencing operational stability. Successfully navigating these risks mandates a proactive
approach, encompassing regulatory adherence, competitive agility, and resilient supply chain management for Asian Paints to
sustain its market position.

(3) Provide a brief Industry cum Competitor Analysis for the chosen company?
The industry itself holds immense potential, driven by rapid urbanization, rising disposable incomes, and increasing focus on
home improvement. However, competition is fierce, with strong players like Nippon Paint, Berger Paints, and AkzoNobel have
cutthroat competition with Asian Paints. Nippon Paint, with its premium positioning and technological advancements, is a key
competitor in the decorative segment. Berger Paints holds a significant share in the rural market with its affordable offerings.
AkzoNobel, through Dulux and Dulux Acrylan brands, competes across segments. To maintain its edge, Asian Paints leverages
its robust distribution network, innovative product launches, and strong brand loyalty. They constantly adapt to regional
preferences and embrace digital marketing to engage tech-savvy consumers. Despite a promising future, Asian Paints faces
challenges like fluctuating raw material costs and potential economic downturns. Navigating these hurdles while strengthening
its competitive edge will be crucial for Asian Paints to retain its leadership position in the dynamic Indian paints industry.

(4) Write about an Overall Financial Position of the chosen company along with the Financial Table with key relevant
ratios (provide separately in the excel).
The financial analysis reveals a positive trajectory for the Asian Paints over the past three years. Notably, a consistent rise in
Net Sales signifies robust revenue growth. Operational efficiency is evident with an increasing EBITDA Margin, reaching
20.64% in 2023. The company maintains a healthy Profit After Tax (PAT) across the years, showcasing sustained profitability.
However, the balance sheet indicates an increase in short-term debt and total outstanding liabilities, possibly reflecting
heightened financial obligations. Tangible Net Worth has strengthened, reflecting a robust financial base. Liquidity remains
sound with a current ratio consistently above 2. The Net Operating Cycle has extended, warranting scrutiny for potential
impacts on working capital management. Stable Total Debt/EBITDA suggests sensible debt management. While the Debt-to-
Equity ratio has increased, the overall financial position appears strong, indicating a balance between growth and financial
stability.

(5) What will be your Recommendation if the chosen company is provided an Unsecured Loan – provide reasons for your
decision.
Considering the factors above, it might be advisable to provide an Unsecured Loan under certain conditions. If the company is
pursuing growth opportunities or strategic initiatives that require additional funding and if the interest rates on unsecured loans
are competitive compared to other financing options, an unsecured loan could provide flexibility without requiring specific
collateral.
However, it is crucial to assess the terms and conditions of the unsecured loan, including interest rates, repayment terms, and
covenants. Additionally, the company should ensure that the additional financial obligations align with its overall financial
strategy and won't adversely affect its debt service capacity.
In summary, based on the positive financial indicators, the company could consider an Unsecured Loan for strategic initiatives,
but a detailed evaluation of the terms and alignment with the overall financial strategy is essential.

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