{"id":1264,"date":"2010-05-26T17:22:18","date_gmt":"2010-05-26T11:52:18","guid":{"rendered":"https:\/\/www.moneyworks4me.com\/investmentshastra\/?page_id=1264"},"modified":"2020-03-11T16:45:12","modified_gmt":"2020-03-11T11:15:12","slug":"company-shastra-4","status":"publish","type":"page","link":"https:\/\/www.moneyworks4me.com\/investmentshastra\/company-shastra-4\/","title":{"rendered":"Company Shastra"},"content":{"rendered":"

Asian Paints Ltd. \u2013 What makes it a Leader?<\/h1>\n

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Asian Paints\u2019 10 YEAR X-RAY*:<\/strong> G<\/span><\/strong>reen (Very Good)<\/strong><\/span><\/h2>\n

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(* 10 YEAR X-RAY shows the financial performance of a company in the last 10 years.) <\/strong><\/p>\n

Asian Paints Ltd, in brief<\/h2>\n

Asian Paints is India’s largest paint company and among the top ten decorative coating companies in the world. It is a fully integrated paints company that operates in the 2 main segments \u2013 decorative and industrial. It has more than 50% market share in the organized paint industry.<\/strong> The company has been able to cater to the vast Indian paint market with the help of its strong distribution network \u2013 25000+ dealers and 14,000+ Color World outlets with tinting machines. <\/strong>It has a huge global presence, operating successfully in 17 countries<\/p>\n

What does Asian Paints\u2019 past say?<\/strong><\/h2>\n

\"\"<\/strong>Asian Paints has performed robustly in all its parameters over the last 10 years. Its impressive fundamentals in the past form a strong base for its future. Hence, the 10 YEAR X-RAY of Asian Paints is Green (Very Good)<\/span> <\/strong><\/p>\n

Asian Paints has an excellent financial track record<\/strong>, which is an indication of it having an unbreachable moat.\u00a0Stock Shastra#4<\/a><\/strong> highlights the importance of a moat (sustainable competitive advantage)<\/strong> in a business: Having a wide moat helps a company survive competitive pressures & remain a leader.<\/strong><\/p>\n

In the Indian paint industry, Asian Paints has been a leader since the last four decades. <\/strong><\/p>\n

What has helped Asian Paints maintain its leadership position till date?<\/em><\/strong><\/p>\n

It is the presence of 2 unbreachable moats \u2013High Brand Equity and Strong Distribution Network – <\/strong>that Asian Paints Ltd has developed over the years.<\/p>\n

The 2 Unbreachable Moats developed by Asian Paints Ltd:<\/strong><\/p>\n

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  1. High Brand Equity:<\/strong> Asian Paints realized the need for brand building as early as the sixties, which has now made it an iconic brand.<\/strong> It has re-positioned itself from time to time to cater to the changing mind-sets of consumers and has built an emotional connect with consumers, in that process. For eg: It changed its 80\u2019s positioning of \u2018Celebrate with Asian Paints\u2019 – <\/strong>catering to the habit of painting during festivals to \u2018Har Ghar Kuch Kehta Hai\u2019,<\/strong> in the late 90\u2019s, reflecting the shift in the consumers\u2019 mind, in terms of paint becoming a high-involvement category.<\/li>\n
  2. Strong Distribution Network:<\/strong> The second strong moat of Asian Paints is its Strong distribution network, <\/strong>which is more than twice as large as its nearest competitors<\/strong>. It has a direct distribution network of 25,000 dealers, where the company pro-actively connects with the dealers themselves. It is present in 17 countries<\/li>\n<\/ol>\n

    Both these moats \u2013 High Brand Equity and Strong Distribution Network have been its major growth drivers till date.<\/strong> No retailer can do without Asian Paints products & hence they are widely available. As a result, It has been able to cater to the vast Indian paint market. These 2 moats have helped it maintain its market leadership position over the years<\/strong><\/p>\n

    What is Asian Paint\u2019s Short-term Outlook?<\/strong>–<\/span><\/h2>\n