EXCISE cuts, reduction in import duties on some raw materials like orthoxylene and pthallic anhydride, and a boom in the construction and automobile sectors have put the Indian paints industry on a roll for another couple of years at least. Paintmakers are looking at a 20-30 per cent growth per annum. Capacity expansion is on the cards for most of the players, especially in the industrial paints sector, which is growing faster than the decorative paints market. A glance at the top two paint companies:
ASIAN PAINTS: The market leader's strength has always been its superior marketing and distribution prowess. Sales grew by 23.5 per cent in 1994-95, and net profit by an impressive 69.8 per cent.
While its decorative paints business--the company has a marketshare of 37 per cent--will gain substantially from excise cuts, Asian Paints is also investing heavily in industrial paints (marketshare: 14 per cent), which has not been a traditional focus area for the Bombay-based company.
At Rs 650, with an EPS of 29.6 (all prices are Bombay...