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org © 2023 IJCRT | Volume 11, Issue 9 September 2023 | ISSN: 2320-2882

Performance Analysis Of Selected Paint

Companies In India
Mahin Husain1, Nabhjeet Kaur2
1. PGDM Student, IILM Academy of Higher Learning, Lucknow.
2.
Faculty Associate, IILM Academy of Higher Learning, Lucknow.

Abstract
Given the strong competitiveness of today's business environment, maximizing profit is the primary goal of
any organization. Profit is simply the surplus income earned when a company's revenue exceeds its
expenditures. To fully assess an organization's financial performance, it is necessary to examine its
profitability trends over a specific time period. Financial analysis serves as a valuable tool for investors,
stakeholders, and industry analysts to make informed decisions regarding investments and collaborations with
the respective companies. A variety of methodologies and instruments are available in the discipline of
financial accounting to measure an organization's performance. This research looks into the financial
performance of certain paint firms in India, using ratio analysis and statistical approaches to analyze the data.
The research spans a five-year period, from 2019 to 2023. The study's findings reveal that Asian Paints and
Berger Paints are leaders in the paint industry, showcasing strong financial performance, profitability, and
efficiency. However, Nerolac Paints has room for improvement, particularly in profitability and efficiency
aspects.
Keywords- Performance Evaluation, Ratio Analysis, DU Pont Analysis.

1.INTRODUCTION
The paint industry has played a pivotal role in transforming surfaces, beautifying spaces, and providing
protection for various applications. Over the years, this industry has witnessed exponential growth and
remarkable advancements, positioning it as a critical component of the global economy. This introduction
provides an in-depth overview of the paint industry, with a focus on three prominent players - Asian Paints,
Berger Paints, and Nerolac Paints, along with key milestones and developments that have shaped their
trajectories. The paint industry's historical evolution and modern-day innovations highlight its significance in
transforming spaces and protecting surfaces. Asian Paints, Berger Paints, and Nerolac Paints stand as beacons
of success and resilience in this competitive landscape. Through a comparative analysis of these companies,
this report aims to provide comprehensive insights into their financial performance, profitability, liquidity,
solvency, and efficiency. By understanding the strengths and areas for improvement of each company,
investors, stakeholders, and industry observers can make informed decisions and gain a holistic view of the
paint industry's prospects.

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Overview of the Paint Industry

The history of the paint industry dates back to ancient times, with the use of naturally derived pigments and
resins for decorative and protective purposes. However, it was in the late 19th and early 20th centuries that
the paint industry underwent significant transformations, driven by industrialization and technological
advancements. The introduction of synthetic pigments and the development of durable coatings marked a
turning point for the industry.
Asian Paints: From Humble Beginnings to Global Leadership
Established in 1942 by Champaklal Choksey, Chimanlal Choksi, Suryakant Dani, and Arvind Vakil, Asian
Paints began its journey as a small partnership firm in Mumbai, India. Over the years, the company expanded
its product range and geographical presence, becoming India's leading paint manufacturer. In 1967, Asian
Paints went public and got listed on the Bombay Stock Exchange, symbolizing its growth and progress. With
a vision to be a global player, Asian Paints started its international operations in 1975 by setting up a
manufacturing unit in Jamaica. Since then, the company has continuously expanded its footprint in various
countries across Asia, the Middle East, Africa, and the Caribbean. Asian Paints' commitment to innovation,
sustainable practices, and customer-centricity has been instrumental in establishing it as one of the largest and
most successful paint companies worldwide.
Berger Paints: Over a Century of Steady Growth and Innovation
Berger Paints, one of the oldest paint companies, traces its roots back to 1760 when Lewis Berger, a German
national, began manufacturing paints in the United Kingdom. The company's journey in India commenced in
1923, when it set up its first manufacturing unit in Kolkata. Berger Paints (India) Limited was officially
incorporated in 1923, and in 1983, it became a public limited company. Over the years, Berger Paints has
expanded its product range to include decorative, industrial, and protective coatings. The company's
commitment to research and development has led to the introduction of technologically advanced products,
catering to diverse customer needs. Berger Paints' strategic acquisitions and collaborations have further
strengthened its position in the Indian and global markets, reflecting its steady growth and commitment to
innovation.
Nerolac Paints: A Growing Presence in the Paint Industry
Nerolac Paints, part of the Kansai Nerolac Paints Limited, commenced its operations in India in 1920, making
it one of the pioneers in the Indian paint industry. Initially known as Gahagan Paints and Varnish Co. Ltd., the
company was later acquired by Kansai Paints, a Japanese multinational, in 2006.Under the ownership of
Kansai Paints, Nerolac Paints expanded its product portfolio and manufacturing capabilities, enabling it to
cater to both decorative and industrial segments. The company's focus on quality, value-driven products, and
expanding its distribution network has contributed to its growing presence in India and other Asian countries.
2.Objective of the Study
The primary objective of this study is to conduct a comprehensive financial performance analysis of the paint
industry, focusing on the companies Asian Paints, Berger Paints, and Kansai Nerolac Paints. The analysis aims
to provide a deep understanding of each company's financial health, operational efficiency, and profitability
trends over the five-year period from 2019 to 2023.
3.Research Methodology
To conduct the financial analysis of Asian Paints, Berger Paints, and Nerolac Paints, data was collected from
reputable financial websites such as Money Control and Yahoo Finance. These sources provide accurate and
up-to-date financial information. Several financial ratios were chosen to assess the financial performance,
profitability, liquidity, solvency, and efficiency of the three paint companies.
Ratio analysis is used as a financial analysis technique for extracting crucial financial data from a company's
financial statements. It provides a short and comprehensive snapshot of a company's financial performance
and health by assessing several financial ratios such as liquidity, profitability, solvency, and efficiency ratios.

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These ratios provide critical information about a company's capacity to satisfy short-term obligations, produce
profits, manage debt, and utilize its assets efficiently. In summary, ratio analysis is used as a tool for distilling
complex financial data into relevant insights that aids in overall financial situation assessment.
Data collected from the financial websites was organized and analyzed using Microsoft Excel. The Excel
spreadsheet allowed for efficient data management and calculation of the selected financial ratios. Each
company's financial ratios were calculated for the most recent fiscal year available. The calculated financial
ratios for Asian Paints, Berger Paints, and Nerolac Paints were then comparatively analyzed. A side-by-side
comparison of the ratios allowed for identifying patterns, trends, and variations among the companies. The
goal was to gain a better understanding of the companies' relative financial positions and performance.
The interpretation of the financial ratios involved a qualitative analysis of the results. Key findings were
identified, focusing on the strengths and weaknesses of each company. The interpretation aimed to provide
meaningful insights into the financial health and performance of the paint companies.
Various financial tools were employed to enrich the analysis. The DuPont Analysis helped to decompose the
Return on Equity (ROE) into its constituent components, such as Profit Margin, Asset Turnover, and Financial
Leverage. Additionally, the calculation of Beta (β) helped gauge the companies' market risk and volatility
relative to the market index.
4.Literature Review
The major goal of financial reports is to provide information on a company's financial status, operational
performance, changes in corporate governance, and cash flow. (Almagtome et al., 2019). Financial reports'
main objective is to give interested parties a thorough insight of a company's financial situation, operational
performance, changes in corporate governance, and cash flow management. Through balance sheets, income
statements, these reports give a snapshot of the company's financial stability, profitability, and efficiency. They
also describe the company's proficiency in managing cash flow.(Davies, 2018).
Financial reports help investors, creditors, regulators, and other interested parties to monitor the overall health
of the organisation by attaining these goals (Naji Ali et al., 2019). A firm's valuation is influenced by a variety
of factors, including financial decisions, investment strategy, capital structure, growth trajectory, and company
size. Among these characteristics, the company's financial performance is critical for prospective investors
when contemplating equity investments. As a result, an unshakable commitment to maintaining and improving
financial performance is required (Pascareno & Siringoringo, 2016).
Financial performance is a multidimensional notion. According to Ranjbar et al., (2017), it is the unit's ability
to efficiently use its resources to develop outputs that are aligned with its objectives and meet the needs of its
stakeholders. Stephen, (2019) define financial performance in a broader sense as a snapshot of a firm's
financial status at a certain point in time or over a specified period, incorporating many aspects of its
operational prowess. It reflects the convergence of activities that result in the facility, and it assesses the
amount to which these activities contribute to value creation and effectiveness in deploying existing financial
resources while achieving financial goals with low financial outlays.
Financial performance is an important tool for managers because it allows them to scrutinise a company's
operational behaviour and ensure that its strategic trajectory is aligned with the imperatives of survival and
competitiveness. According to (Fung, 2014), a thorough knowledge of the financial situation becomes difficult
in the absence of critical data and information. Simultaneously, for those who rely on financial reports, this
data is a vital resource for determining both the organization's strengths and risks. Furthermore, it enables
stakeholders to use this financial performance data to make better educated decisions. Investors, in particular,
profit significantly from a thorough understanding of financial success, which manifests in the attainment of
numerous goals (Buckley et al., 2017). Elshandidy et al., (2018) underline the potential benefits of maintaining
an informed voluntary disclosure system. The advantages include increased credibility, better investor
relations, access to more liquid markets, greater pricing and decision-making capabilities, reduced perceived
risk and reputational enhancement, and a potentially lower cost of capital.

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While annual reports are widely acknowledged as an important source of information for decision-making
(Solomon et al., 2000) they are not the only way for corporations to publish risk information. A increasing
body of research emphasises the necessity of using quantitative methods such as Ratio Analysis, in addition
to annual reports, to acquire a more thorough view of a company's risk profile and financial health.
According to Dewi et al., (2019) high-quality financial statements are helpful when they provide complete
and understandable information without aiming to deceive readers. This characteristic of financial reporting
guarantees that stakeholders have a precise and reliable understanding of a company's financial status,
assisting them in making decisions.
An effective management system must be built on a solid foundation of high-quality accounting data. The
fundamental building block for determining a company's present financial and asset condition, as well as for
tracking shifts and trends in particular criteria, is accounting data. As a result, organised accounting and
internal audit systems are crucial parts of modern management systems, with the data produced within these
systems serving as their main building block (Pelekh et al., 2020)

5.DATA ANALYSIS AND DISCUSSION

COMPARATIVE RATIO ANALYSIS
LIQUIDITY RATIOS
Liquidity is a ability of a company to fulfil its short-term liabilities. Liquidity ratios are financial measurements
that examine a company's capacity to satisfy its short-term financial obligations using accessible liquid assets
that can be turned into cash quickly and without considerable loss of value. These ratios reveal a company's
short-term financial health, ability to fund current expenses, and ability to withstand unanticipated financial
crises. The liquidity ratios used in this study are Current Ratio and Liquid Ratio.
Current Ratio: The current ratio evaluates a company's capacity to use its current assets to cover its short-
term liabilities. Better short-term liquidity is indicated by a larger current ratio.
Quick Ratio: Since inventory might not be readily convertible to cash, the quick ratio, also known as the
acid-test ratio, is a stricter liquidity measurement that removes inventory from current assets.

Liquidity ratios
2019 2020 2021 2022 2023

Current ratio Asian paint 1.47 1.73 2.03 2.00 2.09

Berger paint 1.69 1.52 1.71 1.42 1.40
Kansai Nerolac Paints 2.44 2.71 2.56 2.44 2.52

Quick ratio Asian paint 0.86 0.96 1.39 1.19 1.31

Berger paint 0.88 0.77 0.92 0.61 0.62
Kansai Nerolac Paints 1.27 1.61 1.60 1.21 1.38

Solvency Ratios

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company's current assets are generally sufficient to

Current Ratio cover its short-term liabilities. However, the
3.00 current ratio is relatively lower than that of Asian
2.50 Paints, suggesting a slightly weaker liquidity
2.00 position.
1.50
Quick Ratio: The quick ratio of Berger Paints is
1.00
between 0.61 and 0.92, which is generally below 1.
0.50
This suggests that the company's quick assets may
0.00
2019 2020 2021 2022 2023 be relatively lower, and it relies more on inventory
to meet short-term obligations.
Quick Ratio Kansai Nerolac Paints:
2.00 Current Ratio: The current ratio of Kansai Nerolac
1.50 Paints ranges from 2.44 to 2.71, indicating a strong
1.00 liquidity position. The company has ample current
assets to cover its short-term liabilities, and its
0.50
current ratio is higher than that of both Asian Paints
0.00 and Berger Paints.
2019 2020 2021 2022 2023
Quick Ratio: The quick ratio of Kansai Nerolac
Asian paint Berger paint Kansai Nerolac Paints
Paints is between 1.21 and 1.61, which is generally
Asian Paints: above 1. This indicates that the company has
sufficient quick assets to meet its short-term
Current Ratio: The current ratio of Asian Paints obligations without relying heavily on inventory.
ranges from 1.47 to 2.09 over the provided period.
This indicates that the company has sufficient Comparison:
current assets to cover its short-term liabilities, Among the three companies, Kansai Nerolac Paints
suggesting a healthy liquidity position. consistently shows the highest current and quick
Quick Ratio: The quick ratio of Asian Paints is ratios, indicating the strongest liquidity position.
between 0.86 and 1.39, which is generally above 1. Asian Paints also maintains a healthy liquidity
This indicates that the company has enough quick position, with current and quick ratios in the
assets (excluding inventory) to meet its short-term moderate to high range.
obligations.
Berger Paints has relatively lower current and
Berger Paints: quick ratios compared to its peers, suggesting a
Current Ratio: The current ratio of Berger Paints slightly weaker liquidity position.
ranges from 1.40 to 1.71, indicating that the

SOLVENCY RATIOS
Solvency is the ability of a company to fulfill its long-term liabilities.
Solvency Ratios Analysis:
a. Debt to Equity Ratio:
The debt-to-equity ratio calculates how much of a company's funding is provided by equity and debt. reduced
financial leverage and reduced risk are both indicated by a lower debt to equity ratio.It tells how much
proportion of business owned by external long-term lenders.
b. Debt Ratio (%):
The percentage of a company's assets that are financed by debt is shown by the debt ratio. A lower debt ratio
signifies more cautious financing and lesser financial risk.

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c. Interest Coverage Ratio:

A company's capacity to pay its interest commitments out of its earnings before interest and taxes (EBIT) is
measured by its interest coverage ratio. An organization's ability to service its interest payments is suggested
by a higher interest coverage ratio.
Solvency Ratios
2019 2020 2021 2022 2023

Debt to equity Asian paint 0.002 0.002 0.001 0.003 0.005

Berger paint 0.097 0.091 0.050 0.003 0.076
Kansai Nerolac Paints 0.001 0.006 0.004 0.003 0.001

Debt ratio (%) Asian paint 4% 2% 2% 3% 4%

Berger paint 11% 11% 6% 9% 15%
Kansai Nerolac Paints 2% 4% 3% 4% 3%

Interest Coverage Ratio Asian paint 30 33 44 42 37

Berger paint 23 18 22 22 12
Kansai Nerolac Paints 65 32 29 17 22

Efficiency Ratios

Debt To Equity Ratio

0.150

0.100

0.050
Company Analysis:
0.000 a. Asian Paints:
2019 2020 2021 2022 2023

Asian paint Berger paint Kansai Nerolac Paints

The debt-to-equity ratio of Asian Paints is very low,
ranging from 0.001 to 0.005. This indicates that the
company relies significantly on equity financing
Debt Ratio and has minimal debt, making it less risky in terms
20%
of solvency.
15% The debt ratio of Asian Paints ranges from 2% to
10% 4%, which is very low, signifying a conservative
5%
financing structure and a stable financial position.
0% The interest coverage ratio of Asian Paints is
2019 2020 2021 2022 2023 consistently high, ranging from 30 to 44. This
indicates the company has a strong ability to cover
Asian paint Berger paint Kansai Nerolac Paints
its interest expenses from its operating profits.

Interest Coverage
b. Berger Paints:
80

60
The debt-to-equity ratio of Berger Paints ranges
from 0.003 to 0.097. While the ratio is generally
40
higher than that of Asian Paints, it is still relatively
20 low, suggesting the company has a balanced
0 financing mix.
2019 2020 2021 2022 2023
The debt ratio of Berger Paints ranges from 6% to
Asian paint Berger paint Kansai Nerolac Paints 15%, indicating moderate financial leverage and a
relatively stable financial position.

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The interest coverage ratio of Berger Paints varies financing and has minimal debt, making it
but is generally reasonable, ranging from 12 to 23, financially stable.
suggesting the company can comfortably meet its
The debt ratio of Kansai Nerolac Paints ranges
interest obligations.
from 2% to 4%, which is low, indicating a
c. Kansai Nerolac Paints: conservative financial structure and good solvency.
The debt-to-equity ratio of Kansai Nerolac Paints The interest coverage ratio of Kansai Nerolac
is quite low, ranging from 0.001 to 0.006. This Paints is consistently high, ranging from 17 to 65,
indicates the company relies mostly on equity indicating a strong ability to meet its interest
obligations.

EFFCIENCY RATIOS
Efficiency, in a business context, refers to the ability of an organization to utilize its resources effectively to
achieve its objectives and maximize output while minimizing input. It is a measure of how well a company
uses its resources (such as capital, labor, time, and materials) to produce goods or services.
Asset Turnover Ratio:
The asset turnover ratio gauges how effectively a business generates sales income from all of its assets. Better
asset utilization and efficiency are indicated by a greater asset turnover ratio.
Inventory Turnover Ratio:
The inventory turnover ratio determines how frequently a company’s stock is sold and replaced over a given
time frame. An increased inventory turnover ratio denotes effective inventory control.

Inventory (Holding) Days:

The number of days it takes for a business to sell all of its inventory is measured in inventory days. Lower
inventory days suggest a quicker turnover of the stock and better inventory control.
Receivable Turnover Ratio:
The ratio of accounts receivable to total revenue reveals how successfully a business collects money from its
clients. A higher ratio of outstanding to total receivables shows effective receivables management.
Average Collection Period:
The average collection period measures how long it typically takes a business to collect its accounts receivable.
Receivables are collected more quickly when the collection periods are lower.
Payable Turnover Ratio:
The payable turnover ratio gauges the speed at which a business pays its vendors. A higher ratio of outstanding
payables reflects effective payables management.

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Average Payment Period:

The average payment period shows how many days on average it takes for a business to pay its suppliers.
Lower payment intervals indicate quicker supplier payments.
Efficiency Ratios
2019 2020 2021 2022 2023

Total Asset turnover ratio Asian paint 1.18 1.25 1.07 1.27 1.34
Berger paint 1.39 1.30 1.15 1.21 1.33
Kansai Nerolac Paints 1.20 1.08 0.92 1.12 1.20

Inventory turnover ratio Asian paint 4.11 6.18 6.04 5.85 5.58
Berger paint 2.46 1.27 1.18 1.11 1.14
Kansai Nerolac Paints 4.88 4.98 4.60 4.51 4.49

Inventory (holding) days Asian paint 89 59 60 62 65

Berger paint 149 288 310 328 320
Kansai Nerolac Paints 75 73 79 81 81

Receivable turnover ratio Asian paint 5.88 10.92 9.88 8.99 8.11
Berger paint 4.51 2.30 1.97 2.11 2.30
Kansai Nerolac Paints 7.18 6.85 5.82 6.21 6.47

Avg Collection Period Asian paint 62 33 37 41 45

Berger paint 81 159 186 173 159
Kansai Nerolac Paints 51 53 63 59 56

Payable turnover ratio Asian paint 6.38 8.92 7.87 7.72 8.84
Berger paint 3.03 1.54 1.33 1.33 1.48
Kansai Nerolac Paints 7.82 8.19 6.76 6.75 7.56

Avg Payment Period Asian paint 57 41 46 47 41

Berger paint 120 237 274 275 247
Kansai Nerolac Paints 47 45 54 54 48

Total Asset Turnover Inventory Turnover Ratio

1.50 8.00

6.00
1.00
4.00
0.50
2.00

0.00 0.00
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023

Asian paint Berger paint Kansai Nerolac Paints Asian paint Berger paint Kansai Nerolac Paints

Inventory Holding Days Receivable Turnover Ratio

400 12.00
10.00
300
8.00
200 6.00
4.00
100
2.00
0 0.00
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023

Asian paint Berger paint Kansai Nerolac Paints Asian paint Berger paint Kansai Nerolac Paints

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Average Payment Days Average Collection days

300 200
250
150
200
150 100
100 50
50
0
0
2019 2020 2021 2022 2023
2019 2020 2021 2022 2023
Asian paint Berger paint Kansai Nerolac Paints
Asian paint Berger paint Kansai Nerolac Paints

Berger Paints:
• Berger Paints has a slightly higher asset
Payable Ratio
turnover ratio than Asian Paints, indicating
10.00 good asset utilization.
8.00
• The inventory turnover ratio is moderate,
6.00
suggesting reasonable inventory
4.00
management.
2.00
• The inventory holding days are higher than
0.00
2019 2020 2021 2022 2023
Asian Paints, indicating slightly slower
inventory turnover.
Asian paint Berger paint Kansai Nerolac Paints
• The receivable turnover ratio is lower,
suggesting that the company may take a bit
Company Analysis: more time to collect payments from
customers.
Asian Paints:
• The average collection period is relatively
• Asian Paints has a relatively high asset higher, indicating a longer time to collect
turnover ratio, indicating efficient use of its receivables compared to Asian Paints.
total assets to generate sales revenue. • Berger Paints has a lower payable turnover
• The company's inventory turnover ratio is ratio, indicating a longer payment cycle to
consistently above 4, showing efficient suppliers.
inventory management. • The average payment period is higher,
• Asian Paints has a moderate inventory showing slower payments to suppliers
holding period, reflecting good inventory compared to Asian Paints.
turnover and management.
Kansai Nerolac Paints:
• The receivable turnover ratio is relatively
high, indicating efficient collection of • Kansai Nerolac Paints has a lower asset
payments from customers. turnover ratio than Asian Paints and Berger
• The company has a low average collection Paints but still demonstrates efficient asset
period, implying quick collection of utilization.
receivables. • The inventory turnover ratio is consistent
• Asian Paints also has a high payable and relatively high, indicating efficient
turnover ratio, showing efficient inventory management.
management of payables. • The company's inventory holding days are
• The company's average payment period is moderate, reflecting a reasonable inventory
relatively low, indicating timely payments turnover period.
to suppliers.

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• The receivable turnover ratio is relatively SUMMATION

high, suggesting efficient collection of
• Asian Paints shows overall efficient asset
payments from customers.
utilization, inventory management, and
• The average collection period is lower than
collection of receivables.
Berger Paints, indicating faster collection
• Berger Paints has slightly lower asset
of receivables.
turnover and receivable turnover ratios,
• Kansai Nerolac Paints has a higher payable
indicating slightly slower asset utilization
turnover ratio, showing efficient
and collection of payments.
management of payables compared to
• Kansai Nerolac Paints demonstrates
Berger Paints.
efficient inventory management and
• The average payment period is relatively
collection of receivables but has a lower
lower, indicating faster payment to
asset turnover ratio compared to Asian
suppliers compared to Berger Paints.
Paints and Berger Paints.

PROFITABILTY RATIOS
Profitability, in the context of business and finance, refers to the ability of a company to generate earnings or
profit from its business activities . It measures the company's ability to generate a surplus of revenues over
expenses, which is a key indicator of its financial health and success.
Operating Margin (EBIT) %:
Earnings before interest and taxes, or EBIT, are used to calculate operating margin, which is the proportion of
operational income to total sales. It illustrates the business' capacity to manage operating expenses and turn a
profit from its primary activities.
Gross Profit Margin:
The proportion of revenue that exceeds the cost of goods sold (COGS) is known as gross profit margin. It
shows how profitable the company's primary production processes are.
EBITDA Margin:
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin quantifies the proportion
of EBITDA to total revenue. It gives information about the business' operating profitability before taking
interest, taxes, and non-cash expenses into consideration.
NET PROFIT MARGIN
The amount of income left over as profit after all costs have been paid is indicated by the financial metric
known as net profit margin, which is stated as a percentage. It shows how successfully a business turns a profit
from its sales. Better profitability is indicated by larger margins, whilst lower margins signify higher expenses
in relation to sales.
Return on Equity (ROE)
A financial statistic called return on equity (ROE) gauges a company's capacity to make money in relation to
the equity of its shareholders. It shows how successfully a business generates profits using the equity staked
by its owners.
Return on Assets (ROA)

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A financial statistic called return on assets (ROA) gauges a company's capacity to make a profit from all of its
assets. It shows how effectively a business uses its resources to produce profits.
Return on Capital Employed (ROCE)
A financial ratio known as ROCE assesses a company's profitability in relation to the total amount of capital
used to support its activities. It demonstrates how successfully a business produces profits using the capital it
uses, which includes both equity and debt.

Profitability Ratios
2019 2020 2021 2022 2023

Operating Margin (EBIT) % Asian paint 16% 17% 19% 14% 16%
Berger paint 12% 14% 14% 13% 12%
Kansai Nerolac Paints 12% 13% 14% 8% 8%

Gross Profit Margin Asian paint 41% 44% 44% 37% 39%
Berger paint 39% 41% 43% 38% 36%
Kansai Nerolac Paints 36% 38% 38% 30% 30%

EBITDA Margin Asian paint 20% 21% 22% 17% 18%

Berger paint 15% 17% 17% 15% 14%
Kansai Nerolac Paints 13% 13% 14% 7% 8%

Net Profit Margin Asian paint 11% 13% 14% 10% 12%
Berger paint 8% 10% 11% 9% 8%
Kansai Nerolac Paints 8% 10% 10% 6% 6%

ROE (Return one equity) Asian paint 23% 27% 25% 22% 26%
Berger paint 20% 25% 21% 21% 19%
Kansai Nerolac Paints 13% 14% 13% 9% 10%

ROA (return on assest) Asian paint 13% 17% 15% 13% 16%
Berger paint 11% 14% 12% 11% 11%
Kansai Nerolac Paints 10% 11% 10% 6% 7%

ROCE (return on capital employed) Asian paint 29% 30% 29% 27% 31%
Berger paint 26% 27% 25% 25% 25%
Kansai Nerolac Paints 18% 17% 16% 11% 13%

Operating Margin Gross Profit

20% 50%
15% 40%
30%
10%
20%
5% 10%
0% 0%
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023

Asian paint Berger paint Kansai Nerolac Paints Asian paint Berger paint Kansai Nerolac Paints

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Berger Paints:
Net Profit
20%
• The operating margin for Berger Paints
ranges from 12% to 14%. While it is lower
15% than Asian Paints, it still reflects the
10%
company's ability to generate earnings from
its operations.
5% • Berger Paints: Berger Paints' gross profit
0%
margin ranges from 36% to 43%. While
2019 2020 2021 2022 2023 slightly lower than Asian Paints, it still
demonstrates effective cost management in
Asian paint Berger paint Kansai Nerolac Paints
its production processes.
• Berger Paints' EBITDA margin ranges from
Company Analysis: 14% to 17%. Although lower than Asian
Asian Paints: Paints, it still reflects the company's ability
to generate strong operational earnings.
• With a consistently higher operating margin • Aim to gradually increase the net profit
ranging from 14% to 19%, Asian Paints margin by optimizing operational costs and
demonstrates strong control over its refining production processes.
operating costs and efficient revenue • Explore avenues to enhance customer
generation from its core operations. This value, potentially allowing for pricing
indicates effective management of adjustments that positively impact
production, distribution, and administrative profitability.
expenses.
• Asian Paints consistently maintains a Kansai Nerolac Paints:
higher gross profit margin, ranging from • Kansai Nerolac Paints also maintains an
36% to 44%. This indicates the company's operating margin ranging from 8% to 14%.
strong ability to manage its production While it's on par with Berger Paints, the
costs efficiently, ensuring a healthy company might consider optimizing its
difference between revenue and the cost of operational efficiency to potentially
goods sold. increase this margin.
• Asian Paints consistently maintains the • Kansai Nerolac Paints has a gross profit
highest EBITDA margin, ranging from margin ranging from 30% to 38%. While
17% to 22%. This indicates that the the margin is competitive, the company
company is adept at generating operational could focus on refining production
earnings before accounting for interest, processes to further improve this metric.
taxes, and non-cash expenses.
• Kansai Nerolac Paints has an EBITDA
• Maintain the consistent trend of net profit margin ranging from 7% to 14%. While
margin improvement. Continue focusing on competitive, the company could explore st
cost management and efficiency to ensure Focus on enhancing operational efficiency
sustainable profitability. to improve net profit margin. Implement
• Consider periodic reviews of pricing cost-effective strategies while maintaining
strategies to balance profitability with product quality and market presence.
customer demand and market competition. • Focus on enhancing operational efficiency
to improve net profit margin. Implement
cost-effective strategies while maintaining
product quality and market presence.

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• Consider innovative approaches to expand

revenue streams and improve the bottom
line

Return On Equity Return on Equity (ROE)

30%
Asian Paints: Shows some variation but maintains
25%
a relatively strong ROE over the years, indicating
20% effective utilization of equity capital.
15%
Berger Paints: Demonstrates a consistent ROE
10%
with minor fluctuations, reflecting stable equity
5%
profitability.
0%
2019 2020 2021 2022 2023 Kansai Nerolac Paints: Exhibits a relatively stable
Asian paint Berger paint Kansai Nerolac Paints but lower ROE compared to the other two.
companies, suggesting room for improvement in
equity efficiency.

Return On Asset Return on Assets (ROA):

20% Asian Paints: Displays consistent and competitive
15%
ROA, indicating effective utilization of assets to
generate earnings.
10%
Berger Paints: Maintains a relatively stable ROA,
5% slightly lower than Asian Paints.
0%
Kansai Nerolac Paints: Shows a lower but stable
2019 2020 2021 2022 2023
ROA, with room for enhancement in asset
Asian paint Berger paint Kansai Nerolac Paints efficiency.
Return on Capital Employed (ROCE):
Asian Paints: Maintains a consistently high
Return On Capital Employed
ROCE, indicating the company's ability to generate
30% returns from its invested capital.
25%
20% Berger Paints: Demonstrates a stable ROCE with
15% minor fluctuations, reflecting effective capital
10% utilization.
5% Kansai Nerolac Paints: Shows a stable but
0% comparatively lower ROCE, suggesting the
2019 2020 2021 2022 2023
company could explore strategies to enhance
Asian paint Berger paint Kansai Nerolac Paints capital efficiency.
Comparison:
Asian Paints: Leads in all three ratios, showcasing
efficient utilization of equity, assets, and capital.

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Berger Paints: Maintains competitive ratios, In summary, Asian Paints consistently

reflecting stable and effective utilization of demonstrates superior performance in terms of
resources. ROE, ROA, and ROCE. Berger Paints and Kansai
Nerolac Paints also show reasonable performance,
Kansai Nerolac Paints: While showing stability, the
but there is potential for further improvement,
company could focus on improving its ratios,
particularly in the utilization of equity and capital.
especially ROE and ROCE, to enhance profitability
from equity and capital.
MARKET RATIOS

Market Ratios
2019 2020 2021 2022 2023

EPS Asian paint 22.48 28.20 32.73 31.59 42.81

Berger paint 5 7 7 9 9
Kansai Nerolac Paints 8 10 10 7 9

Book value per share Asian paint 98.73 105.61 133.51 143.99 166.72
Berger paint 25 27 35 40 46
Kansai Nerolac Paints 63.39 69.78 75.21 76.68 84.13

EPS
50.00
Earnings Per Share (EPS) Analysis:
40.00 Asian Paints: The EPS has been consistently
30.00 increasing from 2019 to 2023, showing strong and
20.00 steady profitability growth over the years.
10.00 Berger Paints: The EPS has shown minor
0.00 fluctuations but remains relatively stable over the
2019 2020 2021 2022 2023
years.
Asian paint Berger paint Kansai Nerolac Paints
Kansai Nerolac Paints: The EPS has fluctuated
slightly but has not shown significant growth
during the period.
Book Value
200.00
Book Value Per Share Analysis:

150.00 Asian Paints: The book value per share has

consistently increased, indicating the company's
100.00 strong asset base and financial health.
50.00 Berger Paints: The book value per share has also
0.00
increased consistently, but at a lower rate compared
2019 2020 2021 2022 2023 to Asian Paints.
Asian paint Berger paint Kansai Nerolac Paints Kansai Nerolac Paints: The book value per share
has shown steady growth, but it is lower than that
of Asian Paints and Berger Paints.

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DU PONT ANALYSIS
The DuPont analysis breaks down the ROE into three components: Net Profit Margin, Asset Turnover Ratio,
and Equity Multiplier.
Net Profit Margin: The company's profitability is shown by the Net Profit Margin, which shows how much
profit the business makes from its sales.
The asset turnover ratio: This ratio gauges how effectively a business generates revenue from its assets.
The equity multiplier: It shows the company's financial leverage and how much debt it has taken on to
finance its assets.
DuPont Analysis can also be applied to Return on Assets (ROA), breaking it down into its component parts to
understand the underlying factors contributing to a company's profitability relative to its total assets. The
DuPont formula for ROA is as follows:
ROA = (Net Profit Margin) x (Asset Turnover)
Net Profit Margin (NPM): Measures the company's profitability by expressing net income as a percentage
of total revenue. It shows how much profit the company generates from each dollar of sales.
Asset Turnover (AT): Measures the company's efficiency in utilizing its assets to generate revenue. It
indicates how much revenue the company generates for each dollar of assets.
Just like in the case of ROE, DuPont Analysis for ROA can help investors and management identify areas for
improvement and understand the key drivers of the company's profitability and operational efficiency. It
enables a more in-depth evaluation of a company's financial performance beyond just looking at the ROA as
a standalone metric.

Key points to consider about DuPont Analysis:

Holistic Perspective: DuPont Analysis provides a holistic view of a company's performance by considering
multiple factors impacting ROE.
Comparative Analysis: It enables the comparison of a company's financial performance with its industry peers
or across different industries.
Diagnosis Tool: DuPont Analysis helps identify strengths and weaknesses in a company's financial structure
and operations.
Financial Strategy: The analysis can guide management in formulating strategies to improve ROE and overall
financial health.
Limitations: While DuPont Analysis is valuable, it may not provide a complete picture of a company's
financial health. It is essential to consider other financial ratios and qualitative factors in conjunction with
DuPont Analysis.

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ASIAN PAINTS
DU PONT ANALYSIS (ASIAN PAINT) 2019 2020 2021 2022 2023

ROE (asian paint) 23% 27% 25% 22% 26%

Net profit margin 11% 13% 14% 10% 12%

Asset Turnover Ratio 1.18 1.25 1.07 1.27 1.34
Equity multiplier 1.72 1.59 1.59 1.66 1.61

ROA (asian paint) 13% 17% 15% 13% 16%

Net profit margin 11% 13% 14% 10% 12%

Asset Turnover Ratio 1.18 1.25 1.07 1.27 1.34

ROE & ROA Equity multiplier

30% 1.75
27% 26%
23% 25% 1.72
20% 22% 1.70
17% 15% 16%
13% 13% 1.66
1.65
10%
1.61
1.60 1.59 1.59
0%
2019 2020 2021 2022 2023 1.55

1.50
ROE (asian paint) ROA (asian paint)
2019 2020 2021 2022 2023

Net profit margin Asset Turnover Ratio

16% 1.50
14% 14% 1.34
13% 1.25 1.27
12% 12% 1.18
11% 1.00 1.07
10% 10%
8%
6% 0.50
4%
2%
0% 0.00
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023

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ANALYSIS • The ROE in 2021 remains relatively stable,

despite a slight decline in Net Profit Margin
• The ROE for Asian Paints fluctuates over
and Asset Turnover Ratio.
the years, with the highest ROE of
• The increase in ROE in 2023 is primarily
approximately 27% in 2020 and the lowest
due to improved Net Profit Margin and
ROE of about 22% in 2022.
Asset Turnover Ratio.
• The improvement in ROE from 2019 to
2020 is mainly driven by higher Net Profit
Margin and Asset Turnover Ratio.

BERGER PAINT

DU POINT ANALYSIS (BERGER PAINT) 2019 2020 2021 2022 2023

ROE (berger paint) 20% 25% 21% 21% 19%

Net profit margin 8% 10% 11% 9% 8%

Asset Turnover Ratio 1.39 1.30 1.15 1.21 1.33
Equity multi[plier 1.76 1.84 1.75 1.84 1.77

ROA (berger paint) 11% 14% 12% 11% 11%

Net profit margin 8% 10% 11% 9% 8%

Asset Turnover Ratio 1.39 1.30 1.15 1.21 1.33

ROE & ROA Asset Turnover

30%
25% 25%
Ratio
20% 20% 21% 21% 19% 1.50
1.39 1.33
15% 1.30 1.21
14% 12% 1.15
10% 11% 11% 11% 1.00
5%
0% 0.50
2019 2020 2021 2022 2023
-
ROE (berger paint) ROA (berger paint) 2019 2020 2021 2022 2023

Net profit margin Equity multiplier

12% 1.90
10% 10% 11%
9% 1.85
8% 1.84 1.84
8% 8%
6% 1.80
4% 1.76 1.77
1.75 1.75
2%
0% 1.70
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023

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ANALYSIS RETURN ON ASSET (ROA)

The ROE for Berger Paints fluctuates over the In some years, the impact of NPM and Asset
years, with the highest ROE of approximately 25% Turnover seems to counterbalance each other. For
in 2020 and the lowest ROE of about 19% in 2023. example, in 2022, the ROA declined despite a
higher Asset Turnover of 1.21 because the NPM
The increase in ROE from 2019 to 2020 is mainly
decreased to 9%. This indicates that both factors
driven by higher Net Profit Margin and Equity
need to be considered together to understand the
Multiplier.
overall impact on ROA.
The ROE in 2021 and 2022 remains relatively
Stable Asset Turnover: Over the years, Asset
stable, despite fluctuations in the components.
Turnover remained relatively stable, with minor
The decline in ROE in 2023 is primarily due to a fluctuations, while NPM showed variation.
decrease in Net Profit Margin and a slightly lower
Equity Multiplier.

Kansai Nerolac Paints

DU POINT ANALYSIS (NEROLAC) 2019 2020 2021 2022 2023

ROE 13% 14% 13% 9% 10%

Net profit margin 8% 10% 10% 6% 6%

Asset Turnover Ratio 1.20 1.08 0.92 1.12 1.20
Equity multi[plier 1.32 1.30 1.37 1.38 1.39

ROA 10% 11% 10% 6% 7%

Net profit margin 8% 10% 10% 6% 6%

Asset Turnover Ratio 1.20 1.08 0.92 1.12 1.20

15%
14%
Equity multiplier
13% 13%
1.40
11% 10% 1.39
10% 10% 10% 1.38
9% 1.37
7% 1.35
6%
5% 1.32
1.30 1.30
0%
1.25
2019 2020 2021 2022 2023
ROE ROA 2019 2020 2021 2022 2023

Net profit margin Asset Turnover Ratio

1.50
12%
10% 10% 10% 1.20 1.20
1.08 1.12
8% 8% 1.00
0.92
6% 6% 6%
4% 0.50
2%
0% 0.00
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023

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ANALYSIS
starts at 10% in 2019, increases to 11% in
2020, declines to 10% in 2021, and then
• The ROE for Kansai Nerolac Paints drops further to 6% in 2022, and slightly
fluctuates over the years, with the highest recovers to 7% in 2023.
ROE of approximately 14% in 2020 and the
• Net Profit Margin (NPM): The NPM, which
lowest ROE of about 9% in 2022.
represents the company's profitability,
• The changes in ROE are mainly influenced shows fluctuations in line with ROA.
by fluctuations in Net Profit Margin, Asset Higher NPM in 2020 (10%) and 2021
Turnover Ratio, and Equity Multiplier. (10%) corresponds to the higher ROA in
• "Kansai Nerolac Paints shows relatively those years, while lower NPM in 2022 (6%)
stable performance in terms of Net Profit and 2023 (6%) is aligned with the declining
Margin and Equity Multiplier over the ROA in those years.
years. However, the Asset Turnover Ratio
• Asset Turnover Ratio: The Asset Turnover
experiences more significant fluctuations. Ratio, which reflects the efficiency of asset
utilization, also follows a similar trend to
ROA. The decline in Asset Turnover Ratio
RETURN ON ASSET (ROA) in 2020 (1.08) and 2021 (0.92) coincides
• Overall Trend: The trend of ROA shows with the corresponding decline in ROA
fluctuations over the five-year period. ROA during those year.

CASH FLOW STATEMENT

ASIAN PAINTS

CASH FLOW OF ASIAN PAINTS (in Rs. Cr.) Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

NET PROFIT/LOSS BEFORE EXTRAORDINARY ITEMS AND TAX 3,311.90 3,628.26 4,304.35 4,187.72 5,688.83
Net CashFlow From Operating Activities 2,469.54 3,038.15 3,683.35 986.49 4,193.43
Net Cash Used In Investing Activities -944.49 -521.42 -547.79 -321.69 -1,274.64
Net Cash Used From Financing Activities -1,117.46 -2,871.46 -650.4 -1,807.61 -2,140.05
Foreign Exchange Gains / Losses 26.7 3.51 7.25 4.94 -7.7
Adjustments On Amalgamation Merger Demerger Others 0 0 0 0 0
NET INC/DEC IN CASH AND CASH EQUIVALENTS 434.29 -351.22 2,492.41 -1,137.87 771.04
Cash And Cash Equivalents Begin of Year 845.68 1,279.97 928.75 3,421.16 2,283.29
Cash And Cash Equivalents End Of Year 1,279.97 928.75 3,421.16 2,283.29 3,054.33

Net Cash Flow from Operating Activities:

The company consistently generated positive cash flows from its operating activities over the years. There
was a significant increase in cash generated from operating activities from Mar-19 to Mar-21, indicating
improved operational efficiency and profitability. However, there was a notable decrease in operating cash
flow in Mar-22, which could be attributed to various factors such as changes in working capital or business
operations. The operating cash flow saw a substantial rebound in Mar-23, reaching a significantly higher level
than in previous years, indicating strong operational performance and profitability.
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Net Cash used in Investing Activities:

The company has been consistently investing cash in its investing activities. There were fluctuations in the
cash used in investing activities over the years, possibly due to different investment decisions and capital
expenditures. The cash used in investing activities reached a peak negative value in Mar-21, suggesting a
significant amount of investments made during that year.
Net Cash used from Financing Activities:
The company has consistently used cash in its financing activities. There were fluctuations in the cash used
from financing activities, which could be related to debt repayments, dividends, or other financing decisions.
The highest negative value in cash used from financing activities was in Mar-20, possibly indicating a
significant debt repayment or dividend payout during that year.
Net Increase/Decrease in Cash and Cash Equivalents:
The company's net cash and cash equivalents increased in Mar-19 and Mar-21, indicating positive cash flow
outcomes. There was a substantial decrease in net cash and cash equivalents in Mar-20, indicating a
challenging year in terms of cash generation. The net cash and cash equivalents decreased again in Mar-22,
but this trend reversed in Mar-23 with a positive increase.
Foreign Exchange Gains/Losses:
The company experienced foreign exchange gains in most years, contributing positively to its cash flow from
operating activities.
Overall Observations:
Asian Paints has generally exhibited a positive trend in generating cash from operating activities, indicating
strong operational performance. Fluctuations in cash flows from investing and financing activities suggest
varying investment and financing decisions over the years. There were challenging years (Mar-20 and Mar-
22) with decreased net cash flow, which could be due to industry or economic factors. The substantial increase
in net cash flow from operating activities in Mar-23 indicates a strong recovery and improved financial
performance.

BERGER PAINTS

CASH FLOW OF BERGER PAINTS INDIA (in Rs. Cr.) Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

NET PROFIT/LOSS BEFORE EXTRAORDINARY ITEMS AND TAX 770.60 883.16 978.62 1,122.29 1,162.34
Net CashFlow From Operating Activities 561.67 724.64 795.76 566.5 975.97
Net Cash Used In Investing Activities -409.05 -223.37 -456.7 -521.29 -600.25
Net Cash Used From Financing Activities -179.14 -479.42 -281.76 -78.13 -362.85
Foreign Exchange Gains / Losses 0 0 0 0 0
Adjustments On Amalgamation Merger Demerger Others 0 0 0 0 0
NET INC/DEC IN CASH AND CASH EQUIVALENTS -26.52 21.85 57.3 -32.92 12.87
Cash And Cash Equivalents Begin of Year 83.59 57.07 78.92 136.22 103.3
Cash And Cash Equivalents End Of Year 57.07 78.92 136.22 103.3 116.17

Net Cash Flow from Operating Activities:

The company consistently generated positive cash flows from its operating activities over the years. There
was a consistent upward trend in net cash flow from operating activities from Mar-19 to Mar-21, indicating
improved operational efficiency and profitability. The cash flow from operating activities decreased in Mar-
22, suggesting potential challenges or changes in operational dynamics. The company experienced a recovery
in cash flow from operating activities in Mar-23, reaching a level higher than in previous years.

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Net Cash Used in Investing Activities:

The company consistently used cash in its investing activities. There were fluctuations in the cash used in
investing activities, reflecting different investment decisions and capital expenditures. The highest negative
value in cash used in investing activities was in Mar-22, indicating significant investment decisions during
that year.
Net Cash Used from Financing Activities:
The company consistently used cash in its financing activities. There were fluctuations in the cash used from
financing activities, which could be related to debt repayments, dividends, or other financing decisions. The
highest negative value in cash used from financing activities was in Mar-20, possibly indicating a significant
debt repayment or dividend payout during that year.
Net Increase/Decrease in Cash and Cash Equivalents:
The company's net cash and cash equivalents showed fluctuations, but the trend remained positive in most
years. There was a decrease in net cash and cash equivalents in Mar-22, suggesting potential challenges in
generating sufficient cash flow. The trend reversed again in Mar-23, with a positive increase in net cash and
cash equivalents.
Foreign Exchange Gains/Losses:
There were no recorded foreign exchange gains or losses in the provided cash flow statement data.
Overall Observations:
Berger Paints India has generally exhibited a positive trend in generating cash from operating activities,
indicating stable operational performance. Fluctuations in cash flows from investing and financing activities
suggest varying investment and financing decisions over the years. There were challenging years (Mar-22)
with decreased net cash flow, which could be due to industry or economic factors. The positive increase in net
cash flow from operating activities in Mar-23 indicates a strong recovery and improved financial performance.

Kansai Nerolac Paints

CASH FLOW OF KANSAI NEROLAC PAINTS (in Rs. Cr.) Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

NET PROFIT/LOSS BEFORE EXTRAORDINARY ITEMS AND TAX 696.79 666.96 712.45 476.41 634.89
Net CashFlow From Operating Activities 99.92 595.07 645.87 24.77 408.25
Net Cash Used In Investing Activities 88.45 -376.22 -452.84 249.54 -226.91
Net Cash Used From Financing Activities -222.89 -140.69 -274.16 -309.31 -132.6
Foreign Exchange Gains / Losses 0 0 0 0 0
Adjustments On Amalgamation Merger Demerger Others 0 0 0 0 0
NET INC/DEC IN CASH AND CASH EQUIVALENTS -34.52 78.16 -81.13 -35 48.74
Cash And Cash Equivalents Begin of Year 61.32 26.8 104.96 23.83 -11.17
Cash And Cash Equivalents End Of Year 26.8 104.96 23.83 -11.17 37.57

Net Cash Flow from Operating Activities:

The company's net cash flow from operating activities varied over the years. There was a significant increase
in net cash flow from operating activities from Mar-19 to Mar-20, indicating improved operational efficiency
and profitability. The cash flow from operating activities continued to increase in Mar-21, suggesting sustained
improvement in operational performance. The company experienced a substantial decrease in net cash flow
from operating activities in Mar-22, indicating potential challenges or changes in operational dynamics. The
cash flow from operating activities rebounded in Mar-23, reaching a level higher than in the previous year.

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Net Cash Used in Investing Activities:

The company used cash in its investing activities in most years. There were fluctuations in the cash used in
investing activities over the years, reflecting different investment decisions and capital expenditures. The
highest negative value in cash used in investing activities was in Mar-22, indicating significant investment
decisions during that year.
Net Cash Used from Financing Activities:
The company consistently used cash in its financing activities. There were fluctuations in the cash used from
financing activities, which could be related to debt repayments, dividends, or other financing decisions. The
highest negative value in cash used from financing activities was in Mar-19, possibly indicating significant
debt repayments or other financing transactions.
Net Increase/Decrease in Cash and Cash Equivalents:
The company's net cash and cash equivalents showed fluctuations over the years. There was a decrease in net
cash and cash equivalents in Mar-21, suggesting potential challenges in generating sufficient cash flow.
Foreign Exchange Gains/Losses:
There were no recorded foreign exchange gains or losses in the provided cash flow statement data.
Overall Observations:
Kansai Nerolac Paints exhibited varying levels of cash generation from operating activities, with
improvements seen in certain years. Fluctuations in cash flows from investing and financing activities suggest
varying investment and financing decisions over the years. There were challenging years (Mar-22) with
decreased net cash flow, which could be due to industry or economic factors. The positive increase in net cash
flow from operating activities in Mar-23 indicates a recovery and improved financial performance.

6.CONCLUSION
Financial Performance:
Revenue Growth: Over the five-year period, Asian Paints consistently demonstrated robust revenue growth,
showcasing its market leadership. Berger Paints and Kansai Nerolac Paints also displayed steady revenue
increases, indicating their competitiveness. Asian Paints maintained a strong profitability margin, with a
noteworthy net profit margin. Berger Paints and Kansai Nerolac Paints also exhibited respectable profitability,
albeit at slightly lower levels. Asian Paints stood out with its significant cash and cash equivalents, showcasing
strong liquidity management. Kansai Nerolac Paints and Berger Paints, while maintaining solid financial
positions, held comparatively lower cash reserves, possibly reflecting different approaches to cash
management. Both Kansai Nerolac Paints and Berger Paints effectively reduced their long-term borrowings
in the latest year, positively impacting their debt-to-equity ratios. Asian Paints, on the other hand, increased
its long-term borrowings, potentially to fuel growth initiatives. Management Strategies of all three companies
invested in tangible assets, signaling their commitment to expanding operational capacities. Asian Paints, with
the highest non-current investments, potentially maintains a more diverse investment portfolio.

Asian Paints has displayed an impressive performance in terms of revenue growth and profitability. The
company consistently achieved significant revenue growth, with total revenue steadily increasing over the
years. Asian Paints maintained robust gross profit margins, reflecting its effective cost management and
pricing strategies. Despite increased operating expenses, including employee benefits and other costs, the
company managed them efficiently, maintaining stable EBITDA and EBIT margins. Additionally, low finance

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costs contributed to Asian Paints' healthy profitability, with net profit margins consistently on the rise. This
indicates not only sustained profitability but also an ability to adapt to market conditions effectively.

Berger Paints exhibited a commendable financial performance as well. The company demonstrated consistent
revenue growth, with total revenue steadily increasing over the five-year period. Gross profit margins
remained stable, showing effective control over material costs. Operating expenses, including employee
benefits and other expenses, increased in line with revenue growth, and Berger Paints managed them
efficiently. EBITDA and EBIT margins displayed stability, reflecting steady operational performance.
Although finance costs increased slightly over the years, Berger Paints maintained a consistent net profit
margin, indicating stable and reliable profitability.

Kansai Nerolac Paints, while experiencing growth, did so at a slightly slower pace compared to its peers. The
company demonstrated revenue growth, albeit at a more gradual rate. Gross profit margins remained relatively
stable, indicating control over material costs. Operating expenses, including employee benefits and other
expenses, increased in line with revenue but were managed efficiently. EBITDA and EBIT margins showed
some fluctuations but generally remained stable. Kansai Nerolac Paints maintained low and stable finance
costs. The net profit margin experienced fluctuations over the years, with a decrease in 2022, followed by a
rebound in 2023.

In conclusion, the analysis of the financial performance of three prominent paint companies, namely Asian
Paints, Berger Paints, and Kansai Nerolac Paints, over a five-year period reveals intriguing insights into their
Return on Equity (ROE) and Return on Asset (ROA). Asian Paints demonstrated fluctuating ROE, with its
highest point in 2020 and the lowest in 2022, driven by variations in Net Profit Margin (NPM) and Asset
Turnover Ratio. Berger Paints exhibited a similar pattern in ROE, with its peak in 2020 and a decline in 2023,
primarily attributed to shifts in NPM and Equity Multiplier. Kansai Nerolac Paints, on the other hand, showed
a relatively stable performance in terms of NPM and Equity Multiplier over the years, with fluctuations in
Asset Turnover Ratio affecting its ROE. Furthermore, the analysis of Return on Asset (ROA) highlighted the
intricate interplay between NPM and Asset Turnover Ratio, emphasizing the need to consider both factors
together for a comprehensive understanding of a company's overall financial health. These findings underscore
the importance of closely examining these components and industry-specific factors when evaluating the
financial performance of companies in the paint sector.

All three paint companies demonstrated revenue growth and effective cost management during the five-year
period. Asian Paints stood out with its consistent high revenue growth and profitability. Berger Paints
showcased steady growth and stability in profitability. Kansai Nerolac Paints exhibited growth with some
fluctuations in profitability. The performance of these companies underscores their ability to manage
operations effectively, adapt to market dynamics, and maintain competitive positions in the paint industry.

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https://www.asianpaints.com
https://www.bergerpaints.com
https://www.nerolac.com
https://www.moneycontrol.com
https://finance.yahoo.com

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