JEFFERIES INDIA FORUM 2022

June 2022
Disclaimer

This communication, except for the historical information, may contain statements which reflect
the Management’s current views and estimates and could be construed as forward-looking
statements. The future involves many risks and uncertainties that could cause actual results to
differ materially from the current views being expressed. Potential risks and uncertainties include
such factors as general economic conditions, foreign exchange and commodity price fluctuations,
competitive product and pricing pressures and regulatory developments.
 9th
3rd Largest
INR 289 Billion Largest 2.5% 2.6%
Paint
Group revenue Coatings Co.
Co. in Asia 10.0%
in the World
Asian Paints Group

26 84.9%
Operations in 60+
Paint
15 Markets Served
Manufacturing
countries
Plants
Decorative Business International Business

145,000+ 200+ Industrial Business Kitchen & Bath Business

80 Years Retail Touch Scientists
of Points driving PPG-AP revenues are not included in Industrial business
Delivering Joy in India Innovation
 Delivering joy since 1942….
We exist to Beautify, Preserve, Transform all Spaces and Objects,
bringing happiness to the World!
 Q4 & 12M FY 2022
FINANCIAL PERFORMANCE
 Growth trajectory continued in Q4; Volume growth though in single digits, strong
momentum evident from the double digit 2/3 year compounded growth rates
Decorative Business (India)

3 Yr Comp. gr 16% 3 Yr Comp. gr 17%

2 Yr Comp. gr 26% 2 Yr Comp. gr 32%

48%
44%

21%
8%

Volume Gr% Value Gr%

Q4FY21 Q4FY22

Q4 FY22 Volume and Value Trend

 Volume Growth Value Growth
Decorative Business (India)

31% FY 22 36%

8% Qtr 4 21%

18% Qtr 3 27%

34% Qtr 2 35%

106% Qtr 1 94%

Robust performance in FY 2021-22

 Double digit volume and value growth delivery from a 2 / 3 year perspective,
despite a challenging environment
Decorative Business (India)

3 Yr Comp. gr 18% 3 Yr Comp. gr 15%

2 Yr Comp. gr 22% 2 Yr Comp. gr 21%

36%
31%

13%
8%

Volume Gr% Value Gr%

FY21 FY22

Strong Medium Term Growth Trend

 ❖ Q4 as well as Full year growth led by
❖ T1/T2 centers: Good double-digit growths, especially in Luxury & Premium range
❖ T3/T4 : Good growth here as well; Double-digit growth in Economy range
Decorative Business (India)

❖ Overall
❖ Growth dented in Jan’22; High double-digit growth in rest of the quarter
❖ Growth across geographies; Highest growth in West & East geographies
❖ New world-class innovation giving momentum to growth; New products contributing to
14% of revenues
❖ Waterproofing & Wood Finishes growing at exponential rates

❖ Project / Institutional business growing at higher clip than retail

❖ Big surge in business across T1/T2/T3 centers from the Builder segment
❖ Strong growth from Government, Factories segments
❖ Good trajectory in Waterproofing, especially in Admixtures and Membranes
World Class Innovations

Ultima Allura Ultima Allura

Graniza Torino

❖ World class Exterior Textures with an international range of more than 180 texture patterns
❖ Unique range, outclassing best in the world
❖ Suitable to Indian sensibilities and weather conditions
 ❖ First time introduction in India of a Fire-Retardant category
World Class Innovations

❖ A unique hydrophobic ‘Lotus Effect’ technology

❖ Matched with the best Anti-Stain Absorption or Removal performance

ALL Protek
Fire Retardant
Paint

❖ First time introduction of Anti-Crack durable coatings

❖ A unique Teflon Luxury offering with Anti-Stain Absorption
❖ Sophisticated finish, benchmarked to Uber - Luxe

Royale Glitz
New Product Introductions

One of its kind, pioneering solutions for customers

❖ Simplified waterproofing and Efflorescence solution
SmartCare
HydroLOC
with patented technology
❖ Unique waterproofing repair range Epoxy Apcoflur
❖ An Epoxy and Polyurethane Flooring Tech coatings
❖ Wood Finish solutions, benchmarked to best

AP Woodtech SmartCare apcorep

Ingenio KCRETECOAT
 ❖ Distribution Footprint
❖ Expansion in Big city suburbs and T3/T4 cities in a big way
❖ Co-existence of a unique Distributor and Direct Dealer model
Decorative Business (India)

❖ Adding more than 15,000 retail points taking AP presence across 1,45,000 retail points

❖ Product category expansions

❖ Gaining traction across categories – Emulsions, Wood Finishes, Waterproofing, Undercoats,
Adhesives, DIY Paints

❖ Increasing the per Capita Paint consumption & enlargement of the Paint market
❖ Introducing new categories to fuel growth
❖ Wood Polish Market : Glow Max
❖ Super Economy Emulsions : Tractor/ Ace Sparc Range
❖ New Categories like Hygiene Paints / Fire retardant Paints / Glass Paints / Floor paints
❖ Increasing Paint application productivity through mechanized tools
 ❖ Best in Class Painting Service
❖ Unique Painting Service Model : Globally the biggest and best service model
Decorative Business (India)

❖ Unparalleled Consumer delight measured through NPS

❖ Delivered through more than 1,50,000 trained painters

❖ Presence across 240 towns in India

❖ A Range of services offered:

❖ Colour Consultancy and Visualization
❖ Express Painting services : Quick Makeover
❖ Waterproofing Solutions
❖ Wood Finishes Solutions
❖ Hygiene Services
Services – A Key Differentiator
Home Décor Business
 ❖ Home Décor Foray
❖ Asian Paints being a forerunner in inspirational and exciting Home Décor partnering the customers
in making her dream home!
❖ Transitioning from ‘Share of Surface’ to ‘Share of Space’ within the Homes
Home Décor Business

❖ Asian Paints providing Home Décor under one roof : Beautiful Home Stores offering Kitchen, Bath &
Sanitaryware, Lighting, Tiles, Flooring, Furnishings, Furniture, Doors & windows
❖ 29 stores till March 2022
❖ Beautiful Homes Service – Personalized Interior Design to Professional Execution –offered in 9 cities
❖ Beautiful Home Shop energizing the Ecom deliveries in Home Décor
❖ Central Inspirational Model: BeautifulHomes.com
 ❖ Home Décor Acquisitions / Investments till now
• Kitchen & Kitchen Hardware & Components: Sleek; A new factory in Maharashtra in 22-23
• Bath & Sanitary: Ess Ess; A new factory in Maharashtra in 22-23
• Designer and General Tiles: Green Field foray in 21-22
Home Décor Business

• Wardrobes and Vanities: Green Field foray in 20-21

• Fabric and Furnishing: Alliance with GM Syntex - Brand Pure
• Designer Wall Paper: Green Field foray - Ink Jaipur
• Furniture: AP Design Range under Nilaya / Royale / Ador - Outsourcing Model
• Rugs: Alignment with Jaipur Rugs
• Two New Acquisitions announced in April 2022
➢ White Teak in Decorative & Designer Lighting
➢ Weatherseal in Doors & Windows

Makes AP a unique player in the Indian market which operates in the Ecom, Physical and the
Services space with almost all categories being owned /manufactured by the brand
 Home Décor - Partnership with “The White Teak Company”
• Foray in the Rs. 1200 crores Decorative & Designer
Lighting market

• White Teak brings a strong ‘Phygital’ model

• Operating 10 stores pan India across Tier 1 cities
• Tech enabled Website provides unique
experience & facilitates footfalls at stores

• Collection of unique and premium decorative lights

 Home Décor - Partnership with “Weatherseal”
• Rs 11,000 crores market size for Windows & Doors

• End-to-end fabrication and installation of world-class

uPVC windows & doors

• Network of almost 20 COCO & Franchisee stores

• Strong presence in Southern India

• Association with renowned builders – Prestige,

Brigade, Mahindra
 ❖ Home Décor Business Trajectory

❖ Home Décor business about 4% of the Deco Business in FY 21-22

Home Décor Business

❖ Attempting to make this 8-10% of the Deco Business by FY 25-26, including

the Home Décor Services

❖ This we believe has a strong synergy with the core business of Decorative
Coatings

❖ This will make Asian paints a strong partner in the Customer Life journey
for creating ‘Beautiful Homes’
 ❖ Kitchen Business
❖ Rs. 100 crores+ delivery for 3rd consecutive quarter Revenue
❖ Full Kitchen solutions as well as Components

55%

46%
business doing well
❖ Projects business gaining traction
Home Décor Business

410

17%
34%
❖ Network expansion continued in Full Kitchen dealer 360

network
❖ Significantly lower loss compared to LY; benefit of 128 109

scale inspite of rising inflation Kitchen Business Bath Business

❖ Loss of Rs. 9 crores this year (vs Rs. 21 crores Q4 FY
loss LY)
❖ Bath Business PBT
❖ Rs. 100 crores+ delivery for 2nd quarter in a row
❖ Solid footing in the Projects business in
collaboration with the Decorative Project team
❖ Premium range ‘Bath Sense’ & Sanitary ware -2 -9
1 4
expanding well
Kitchen Business Bath Business
❖ Profitable quarter & Full year Q4 FY
❖ Benefit of scale; Raw material inflation partially (figures in columns in Rs. crs)
offset by price increases
International Business
 ❖ Double digit revenue growth for Q4 & full year
Revenue
❖ Asia – Strong growth in Nepal, Bangladesh

29%
❖ Sri Lanka facing unprecedented forex
crisis
International Business

13%

18%
1,480

6%

8%

10%

11%
1%
❖ Africa – a weak spot; High inflation, regional 759
disturbances & forex crisis impacting Ethiopia 158
560
197 442 32 130

Africa Middle East Asia South Pacific

❖ Overall, International Business revenue: Q4 at Q4 FY
Rs. 818 crores (+12%) & FY22 at Rs. 2895 crores
(+16%) PBT*

8%
❖ High single digit 3 year compounded

135%
growth in FY22 over FY19 71

1%
14%
❖ Profitability significantly impacted by the -3
37
29
-43 -17 -27
steep material inflation & currency devaluations 6

in Sri Lanka, Ethiopia & Egypt Africa Middle East Asia South Pacific
Q4 FY
❖ Q4 PBT* at Rs. 15 crores against Rs 34 crores
in LY & FY22 PBT* at break-even (Rs 179 crores (figures in columns in Rs. crs)
* PBT is before exceptional items
LY)
Industrial Business
 ❖ PPG-AP Revenue
❖ Good growth amidst challenges faced by the

32%
Auto industry

51%
❖ Strong push for implementing price increases 1,444

19%
Industrial Business

28%
across B2B customers
794

❖ AP-PPG 396 247

❖ Closed the year with record revenue delivery PPG-AP Q4 FY AP-PPG

❖ Almost 20% plus revenue growth for the
year on a 3 year compounded basis PBT
❖ Led by growth in Protective Coatings segment

12%
❖ Collaboration with Decorative project team
lead to strong performance in Floor coating

41%
86

56%

83%
❖ Efficiency measures, cost controls limiting the 41
impact of fall in gross margins 25 21

PPG-AP Q4 FY AP-PPG
(figures in columns in Rs. crs)
 Exceptional Items Impacting Q4 and FY22
Expected credit loss on subsidies available from State governments
❖ Considering the delay in receipt of subsidy amounts from the State governments, an expense of Rs. 53.7 crores recognized as
Exceptional Item, towards time value of money computed under ‘expected credit loss’ method based on reassessment of
expected timing of cash inflows for subsidy income accrued till FY 20-21
❖ Company is confident about the ultimate realization of the dues from the State Governments
❖ In addition, subsidy income disclosed under Operating income for Q4 FY21-22 and FY21-22 lower by Rs 31.1 crores to recognize
impact of reassessment of expected timing of cash inflows for the subsidy income accrued in FY 21-22

Causeway Paints Lanka Pvt Ltd: Currency Devaluation and Impairment of loss on ‘Goodwill on Consolidation’
❖ Current economic crisis in Sri Lanka has led to sharp currency devaluation, resulting in recognition of an expense of Rs. 48.5 crores
towards exchange loss on foreign currency obligations of Causeway. Disclosed as Exceptional item.
❖ Impairment provision of Rs. 13.5 crores considered as Exceptional Item on Goodwill on Consolidation recognized on acquisition of
Causeway
 Sequential improvement in Gross Margin from lows of 2nd Qtr. Full benefit of the
calibrated price increases taken in Nov’21 & Dec’21 supporting Q4 margins
APL Standalone Gross Margins

~4% Material
~6% Material
~15% Material inflation. ~1%
inflation. ~4%
inflation. ~3% ~15% Material
additional
Price increase additional inflation
Price increase
taken in Q1 Price increase in Q4
46.0% 45.0% 45.4% taken in Q2
43.6% taken in Q3
38.9% 39.7%
36.9%
35.0%

Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22

 Summary – Standalone Financials (figures in columns in Rs. crs)
Quarter 4 Full Year

37%
22%
25,002
6,755

15%
11%

14%

10%
11%
9,393

4%

3%
2%
2,679
1,363 1,256 4,588 4,248 3,135
900

Net Sales Gross Margins PBDIT* PBT** PAT Net Sales Gross Margins PBDIT* PBT** PAT
CY LY CY LY

❖ Strong double digit revenue growth trajectory continued in Q4 FY22, leading to 37% value growth in FY22 over LY
❖ Steep material inflation in FY22 across all quarters – offset by multiple rounds of price increases
❖ Sequential improvement in Gross Margins from Q2 FY22 onwards; improving by 470 bps from Q2 low
❖ Cost optimization, efficiency measures arresting impact of lower gross margins
❖ Q4 PBT growth of 14%; excluding impact of lower subsidy income in Other Operating income of Rs. 31.1 crores,
Q4 PBT growth of 16.7%
❖ PAT growth lower due to impact of Exceptional Items * PBDIT before Other Income
** PBT is before exceptional item
 Quarter 4
Summary – Consolidated Financials (figures in columns in Rs. crs)

Full Year

35%
21%

28,923
7,890

13%
10%

1%

0%
13%

4%
9%

0%
3,052 10,623
1,443 1,305 874 4,804 4,303 3,085

Net Sales Gross Margins PBDIT* PBT** PAT Net Sales Gross Margins PBDIT* PBT** PAT
CY LY CY LY

❖ Equally robust revenue growth of 21% in Q4 at Consolidated levels – all businesses growing in double digits
❖ Sequential improvement in Gross margins, improving by 450 bps from Q2 low
❖ Q4 PBT growth of 13%; Excluding impact of lower subsidy income in Other Operating income of Rs. 31.1 crores,
Q4 PBT growth of 15.5%
❖ PAT for Q4 flat compared to previous year; impact of Exceptional Items
• PBDIT before Share in profit of Associates & before Other Income
• ** PBT is before exceptional item
 Steady Dividend Payouts
FY 21-22 Rs 19.15 58.6%

FY 20-21 Rs 17.85 56.1%

FY 19-20 Rs 12.00 51.1%

FY 18-19 Rs 10.50 56.7%

FY 17-18 Rs 8.70 53.0%

FY16-17* Rs 10.30 65.9%

FY 15-16 Rs 7.50 53.4%

* FY 16-17 data including Rs 2 per share special dividend

Figures in column are Dividend per share
 Immediate Outlook - Challenging
❖ Tough demand conditions ahead due to fast changing macroeconomic factors
❖ Spread & severity of new variants of Covid and its impact on business operations need to
be closely monitored

❖ Monetary policy tightening could hurt consumer sentiment in key sectors like Housing,
Automobiles

❖ Expectations of normal monsoon provides comfort

❖ Material inflation unabated and looking to pick up with the prolonged geopolitical tensions
❖ Calibrated prices increases are imminent with continued uptrend in material prices

❖ Global markets facing challenges of steep inflation, economic & forex crisis
❖ Especially in Sri Lanka, Egypt, Ethiopia
 Focus on Long Term Sustainable Journey
Making Responsible Choices
Environment Social Governance

• Community Ownership,
Customer Celebrations
• Water Stewardship
• Empowering Safety
• Energizing, Equitable,
Inclusive Work
Environment
 Product Stewardship Eliminating Harmful Ingredients
Focused on eliminating/minimizing
restricted raw materials from our products.
Certified Sustainable products
Our Architectural paints are lead and heavy
Sustainable products with leadership metal free since 2008, and subsequently
standards such as Green SealTM with free from added Respirable Crystalline Silica
GS-11 certification as well as Green (RCS) since 2013
Assure, our voluntary standard
Shrinking Carbon Footprint
187 Products awarded GreenPro Focused on improving the scattering efficiency
certification by CII-IGBC of Rutile through multiple formulation and
process innovations

Rutile optimization resulted in net carbon

footprint reduction of approximately 17,700 MT
CO2 e
248% Water Replenishment More than 3,400 tonnes
of post-consumer flexible plastic &
62%* reduction More than 14,400 tonnes
in Specific Non-process Fresh Water Consumption
of post-consumer rigid plastic
collected and recycled across 23
states in India

77%* reduction
in Specific Industrial Effluent Generation 37%* reduction
in Specific Electricity Consumption
64%* reduction
in Specific Hazardous Waste Disposal
59%* electricity
from Renewable Sources

* Baseline Year FY 2013-14

 LIVES TOUCHED
Vocational Training
CSR at
APL
Providing skilling and vocational training and technical 3,60,000+
knowledge distribution, to enhance productivity and livelihood Vocational Trainings
for painters, carpenters and plumbers community imparted
Health & Hygiene
Improving health index of the communities by providing
healthcare through static clinics, mobile medical units, free 2,70,000+
medical camps, implementing sanitation projects and Healthcare beneficiaries
awareness programmes for communities through static clinics and
MMUs
Water Management
Promoting integrated watershed development, rejuvenation of
water bodies including desilting lakes, installing & maintaining
rooftop rainwater harvesting units and providing access to 21,66,483+ KL
potable water Water Recharged
through initiatives
Thank You