How Asian Paints Became A Billion Dollar Empire

Asian Paints is considered a market leader in the Indian paint industry with operations spread across 15 countries. It has 26 manufacturing plants globally (including plants in India).
While Asian Paints derives 70-80% of revenue from paint manufacturing, the company is also into chemicals, wall covering, waterproofing, adhesives, sanitisers and kitchen and bath fittings.
Asian Paints commands nearly 50% market share in the domestic paint market. And slightly over 60% market share in decorative paints business segment (mainstay business) in the country. Its product range and extensive distribution network are strong points for its market dominance.
Its size in the scale of operations, brand positioning, pricing and the company's fundamentals plays a crucial role in attracting investors from various categories.
The raw materials for paint companies are crude oil derivatives such as zinc oxide, titanium dioxide, solvents such as turpentine and other additives. An increase/decrease in crude oil prices directly impacts the cost of raw materials for paint companies.
Raw materials costs account for about 50% of its revenue (nearly 55-58% of its total expenses). So, any increase in this, affects the operating profits and puts pressure on the margin.
Recently, the company has taken a price hike (of 15-18%) across its product segments to compensate for the increase in raw material costs. According to the management, the hike's impact can be realised in the next quarter.
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