JM Financial India Conference

Mumbai

November 11, 2014

Disclaimer

This presentation may contain statements which reflect Management’s

current views and estimates and could be construed as forward

looking statements. The future involves certain 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 fluctuations,

competitive product and pricing pressures and regulatory

developments.

Responses can only be given to questions which are not price

sensitive.

Economic Environment – Q2 & H1FY15

Financial Performance – Q2 & H1FY15

Business Review – Q2 & H1 FY15

Risks and Outlook

Agenda

Group Overview

No. 1Paint Company

in India

Servicing

Consumers in over

65 Countries

3rd

Largest Paint

Company in Asia

Over

USD 2 Billion

Group revenue

Operations in

17countries

47 Years of Market

Leadership in India

23Paint

Manufacturing

Plants

Forbes Asia’s Fab

50Company; Four

times in a row

3Times nearest

Competitor in India

13th

Largest Coating

Company

In the World

7000+

Employees

worldwide

Part of NSE Nifty

50

Asian Paints Group Today…

Global standing…

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0 13.3 12.8

11.2

9.3

4.3 4.1 4.1 4.0

3.1 3.1

2.3 2.3 2.1 2.1 2.0 1.9 1.7 1.4 1.3 1.1

In B

illio

n U

SD

* Coating World 2014 Rankings

3rd largest in Asia

13th largest in the World

Worldwide Operations…

JamaicaBarbados

Trinidad & Tobago

Egypt

Oman

BahrainUAE

Nepal

India

Sri Lanka

Bangladesh

Singapore

Solomon IslandsVanuatu

FijiSamoa

Tonga

Total Installed Global Capacity of more than 1.26 Million KL

Strong Brands...

Aspiration…

“To be the fore runner of inspiring décor and to actively

empower customers to create their dream homes”

• Belief in fostering the principles of trust and transparency

• Ability to adapt itself to the changing environment

• Dynamic professional management team focused towards delivering stakeholder

value with highest levels of corporate governance

• Innovative strategies in the marketplace

• Efficient manufacturing and logistics

• Capabilities to effectively harness Information Technology to improve efficiency

in operations (SAP, i2, etc.)

• Prudent management of financial resources

• Focus on Research and Development (dedicated group R & D centre in India at

Turbhe near Mumbai)

Stand for…

Innovative Market place Strategies

• Small Packs

• Exterior Paint Segment

• Consumer and Dealer helpline

• Colour Next (Prediction of Colour trends through

in-depth research)

• Special effect and textured paints

• Signature Stores

• Colour Ideas store

• Samplers

• Beautiful Homes Guide

• Water Proofing and Wallpaper business

• Ezycolour Service brand

• Home Solutions (Painting solution service)

• Colour Consultancy @ Home

Powerful Consumer Connect

• Innovative retailing strategy showcasing latest product and solution offerings enabling consumers to get inspired, try and decide

• Strong presence in all product segments, servicing over 34,000+ dealers

Signature Stores in Metros Colour Idea Stores

Robust Supply chain and IT• State of the art Supply Chain system using cutting edge latest technology for

efficient management and execution

• World Class, large manufacturing facilities with latest automation technologies

– Largest single location paint manufacturing capacities at Rohtak, Haryana and Khandala,

Maharashtra. Both these plants can be scaled up to 4,00,000 KL p.a.

– Planning to set up a new, fully-automated manufacturing facility over the next 2-3 years

• Strong distribution and logistic network across geographies using modern

material storage and handling technologies

• Dedicated in-house IT team adding value to business process in terms of higher

productivity, lower costs, speed, consistency and standardization

Dedicated R&D

• Dedicated Research and Technology facility at

Turbhe (Near Mumbai) with over 150

scientists

• Supports company strategy around

Technology development, Sustainable new

products, Green products, Value re-

engineering for productivity improvement and

cost optimization

• Our scientists had won the Roon award in

2013 – one of the highest technical

achievements in the coatings industry

Changing with times

Decorative - India, 81%

Industrial - India, 5%

International operations, 13%

Home Improvement -

India, 1%

Chemicals -India, 1%

Business Portfolio…

• Decorative Coatings – India

• Industrial Coatings – India

• PPG Asian Paints

• Asian Paints PPG

• International Operations

• Home Improvement Business – India

• Chemicals - India

Decorative Coatings - India

• Largest business unit of the company

• Primarily operates in four segments

o Interior Wall finishes

o Exterior Wall finishes

o Enamels

o Wood Finishes

• Introduced new categories like water-proofing & wallpaper

• Product for every price point and requirement

Industrial Coatings - India

• Asian Paints participates in the Industrial Coatings segment, through two 50:50

JVs with PPG Inc. of US

• PPG Asian Paints (For Auto Coatings)

– The Auto segment is catered through our JV (PPG AP)

• Second largest supplier to the auto segment in India

• Now, the largest player in auto refinish segment, post acquisition of ICI

India’s 2k auto refinish business in 2007

• Commissioned a 3,200 KL / year plant in Chennai, Tamil Nadu in 2008

• Asian Paints PPG (For Non Auto Industrial)

• Protective coatings, floor coatings, road marking paints and powder coatings

segment catered to by this JV

• Services customers in the sectors of Infrastructure, Oil & Gas, Power Plants,

White Goods, etc

International Operations

• Contributes about 13% to the group turnover

• Began by establishing presence in Fiji in 1978

• Presence in 16 countries spread over 4 regions

– Middle East

– Caribbean

– South Pacific Islands

– Asia (Includes Sri Lanka, Bangladesh, Nepal and Singapore)

• Focus on establishing presence and growing in high growth emerging markets

– Looking for expansion in key markets of Africa and South East Asia

– Signed Share Purchase Agreement and other definitive agreements in Oct 2014 to acquire 51% stake in Kadisco Chemical Industry PLC, Ethiopia.

– Received approval and a principal license in Sept 2014 from the regulatory authorities of Indonesia for setting up a greenfield paint manufacturing facility

Caribbean, 13%

Middle East, 50%

Asia, 29%

South Pacific, 8%

Home Improvement Business -

India

• In 2012, Asian Paints announced plans to consider opportunities in the area of Home

Improvement and Décor

• Entered Kitchen space in India in Aug’13 by acquiring 51% stake in Sleek International

– Sleek is a major organized player in the modern kitchen solution space with pan India

presence

– Engaged in the business of manufacturing, selling and distributing kitchens, kitchen

components including wire baskets, cabinets, appliances, accessories etc.

– Retail network of more than 30 showrooms including shop-in-shops and 250+ dealers

• Entered the Bathroom fitting business in June’14 through acquisition of front end sales

business (including brands, network and sales infrastructure) of ESS ESS Bathroom

products Pvt Ltd

– ESS ESS is a prominent player in the bath & wash business segment in India and has high

quality products in this segment

Chemicals

• Asian Paints manufactures Phthalic Anhydride (PAN) and Pentaerythritol

– PAN manufactured in Gujarat and Penta in Tamil Nadu

– More than 50% consumed internally

• Contributes about 1% to the group’s consolidated revenue

– Contribution to the group’s revenue has been continuously decreasing

Consistent performance…

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2003-04 2013-14

2,218

12,715

Consolidated Net Sales and Operating Income ( Rs. Cr)

CAGR 19.1%

0

200

400

600

800

1,000

1,200

1,400

2003-04 2013-14

145

1,219

Net Profit (Rs. Cr)

CAGR 23.7%

Sustained value creation...

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2003-04 2013-14

2,914

52,420

Market Cap (Rs. Cr)

CAGR 33.51%

0%

10%

20%

30%

40%

50%

60%

70%

80%

20

04

-05

20

05

-06

20

06

-07

20

07

-08

20

08

-09

20

09

-10

20

10

-11

20

11

-12

20

12

-13

20

13

-14

60%

73%

52% 51%54%

39%

46% 47% 49% 51%

Dividend Payout Ratio

Recent Accolades• Included in Forbes Magazine's - Asia's Fab 50 List of cos 4 years in a row from 2011

• Rated as the 6th most valuable Brands in India – Aug 2014 (Compiled by marketing and brand consultancy Millward Brown and WPP Group)

• Ranked as the 4th most admired company in the FMCG Sector by Fortune India –Aug 2014

• Presented with the Asian Centre for Corporate Governance & Sustainability Award for the Best Governed Company in 2011

• Asian Paints receives the Best Audit Committee Award from the Asian Centre for Corporate Governance & Sustainability in 2011

• “Sword of Honour" by the British Safety Council for all the paint plants in India, considered as the pinnacle of achievement in safety across the world

Economic Environment – Q2 & H1FY15

Financial Performance – Q2 & H1FY15

Business Review – Q2 & H1FY15

Risks and Outlook

Presentation structure

Group Overview

Economic Environment

• The Apr-Sept 2014 period witnessed slowdown in growth across advancedeconomies

– Concerns on Eurozone deepened with the 3 core economies (Germany,France & Italy) shrinking in the first 6 months

– Japanese economy too shrunk by 1% in the same period

– US by far was the most resilient although with the first 6 months GDP growthof mere 1.1%

• The domestic economy recovery would be more gradual than expectedthough some improvement in fundamentals witnessed

– GDP growth of 5.7% in Q1FY15 as compared to 4.6% in Q4FY14 was positivebut the latest indicators (0.4% IIP growth in Aug & Sept) highlight that full-fledged recovery would take more time

– The Rupee was relatively stable unlike other Emerging market currencies,trading in the range of Rs. 60-62 to a dollar

• Raw material prices have been benign on back of slow global demand withadequate supplies

– Crude is at 4 months low, trading below $85 a barrel

Economic Environment – Q2 & H1FY15

Financial Performance – Q2 & H1FY15

Business Review – Q2 & H1FY15

Risks and Outlook

Presentation structure

Group Overview

Corporate Highlights : Q2 & H1 FY15

• Consolidated Income from operations for the quarter increased by 16.6%

• Consolidated Net Profit after Minority Interest for the quarter increased by 6.3%

• Standalone Income from operations for the quarter increased by 18.3%

• Net Profit on a Standalone basis for the quarter increased by 4.9 %

• The Board of Directors at its Board Meeting held on Sept 17, 2014 recommended payment of an interim dividend of Rs. 1.80 per share (180%)

• Received approval and a principal license in Sept 2014 from the Regulatory authorities of Indonesia for setting up a greenfield paint manufacturing facility

• Signed Share Purchase Agreement and other definitive agreements in Oct 2014 to acquire 51% stake in Kadisco Chemical Industry PLC, Ethiopia.

Financials : Q2 & H1 FY15

Standalone (Rs. Crs) Q2 FY15 Q2 FY14 Gr (%) H1 FY15 H1 FY14 Gr (%)

Income from Operations 2995.7 2532.0 18.3% 5736.5 4851.7 18.2%

PBDIT 481.1 456.4 5.4% 970.6 875.6 10.9%

PBDIT % 16.1% 18.0% 16.9% 18.0%

PAT 325.7 310.6 4.9% 634.5 594.5 6.7%

Consolidated (Rs. Crs) Q2 FY15 Q2 FY14 Gr (%) H1 FY15 H1 FY14 Gr (%)

Income from Operations 3633.0 3114.7 16.6% 6995.2 5955.8 17.5%

PBDIT 536.2 510.8 5.0% 1092.7 975.5 12.0%

PBDIT % 14.8% 16.4% 15.6% 16.4%

PAT after Minority Interest 347.3 326.8 6.3% 686.0 602.0 13.9%

Standalone Income from Operations

6.7%

16.1%

19.9%

7.5%

12.6% 12.9%

18.2%

12.2%

22.2%

16.3%

18.2% 18.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Q1FY13

Q2FY13

Q3FY13

Q4FY13

12MFY13

Q1FY14

Q2FY14

Q3FY14

Q4FY14

12MFY14

Q1FY15

Q2FY15

Economic Environment – Q2 & H1FY15

Financial Performance – Q2 & H1FY15

Business Review – Q2 & H1FY15

Risks and Outlook

Presentation structure

Group Overview

Business Review

DECORATIVES BUSINESS

• Double digit volume witnessed across geographies

• Continued focus on expanding Colour World and Colour Ideas Network

• Waterproofing range of products continues to witness good acceptance in the market

• Cumulative price increase of 2.20% affected upto 30th Sept 2014. (1st May’14 : 1.0% &

1st Jun’14 : 1.2%)

• Capex plan for FY15 at the standalone company level of around Rs. 500 crores

• Rohtak plant expansion work in progress

• Scouting for land in Southern India to set up a new, fully-automated paint

manufacturing facility in the next 2-3 years

Business Review

INDUSTRIAL BUSINESS

• Automotive coatings JV (PPG-AP), saw good growth in the General Industrial segment

led by strong growth in the 2-wheeler category

• The Refinish segment also did well driven by the economy range of products

• Industrial Coatings JV (AP-PPG), which had seen a decline in the previous year, saw

good volume growth in the current year

INTERNATIONAL BUSINESS

• Good growth witnessed in Bangladesh, Nepal and Oman

• Performance in Egypt continued to be weak given the subdued business

sentiment in the country

Business Review

HOME IMPROVEMENT BUSINESS

• SLEEK

• We continue to work on our plans for network expansion and streamlining of

operations

• ESS ESS Bathroom Products

• Asian Paints had acquired the entire front end sales business including

brands, network and sales infrastructure effective 1st June 2014

• The business performed as per expectations during the quarter

• Reported a turnover of Rs. 25.94 Crores in Q2 FY 15 (shown in segment

reporting for standalone financials)

Dividend

• The Board of Directors at its Board Meeting held on Sept 17, 2014 had

recommended the payment of an interim dividend of Rs. 1.80 per share (180%)

• Interim dividend of Rs. 1.10 per share (110%) was distributed in H1-FY2014

• Total dividend of Rs. 5.30 per share (530%) was distributed in FY2014

• Dividend Payout Ratio of 50.9% in FY2014

Economic Environment – Q2 & H1FY15

Financial Performance – Q2 & H1FY15

Business Review – Q2 & H1FY15

Risks and Outlook

Presentation structure

Group Overview

Risks & Outlook

• Going forward, good festival season demand expected in Q3-FY2015

• Downtrend in inflation and likely rate cuts could boost consumer sentiments

• Both Industrial Paint Businesses (Auto and Non-Auto) are expected to benefit

from the pick-up in economic activity

• The International business expected to do well except for the continuing

uncertainty in some units like Egypt

Thank you

Annexures – Q2 & H1 FY15 Results

Consolidated P&L Q2 & H1 FY15

(Rs in crores) Q2-FY15 Q2-FY14 Gr % H1-FY15 H1-FY14 Gr %

Total Income from operations 3,633.0 3,114.7 16.6% 6,995.2 5,955.8 17.5%

Material Cost 2,046.9 1,766.5 15.9% 3,977.8 3,380.2 17.7%

Employee Costs 233.5 185.9 25.7% 458.8 386.7 18.6%

Other Expenses 816.3 651.6 25.3% 1,465.8 1,213.4 20.8%

PBDIT 536.2 510.8 5.0% 1,092.7 975.4 12.0%

Depreciation 66.9 60.3 11.0% 131.4 120.1 9.4%

Profit from Operations 469.4 450.5 4.2% 961.3 855.3 12.4%

Other Income 48.0 45.4 5.8% 95.3 73.1 30.4%

PBIT 517.3 495.9 4.3% 1,056.6 928.4 13.8%

Finance Costs 7.0 12.0 14.8 20.5

PBT before EOI 510.3 483.9 5.5% 1,041.8 907.9 14.8%

Exceptional Item 0.0 - error 25.2 0.0 error

PBT 510.3 483.9 5.5% 1,016.6 907.9 12.0%

Curr. & Def Tax 154.0 144.9 6.3% 313.0 283.9 10.3%

PAT before Minority interest 356.3 339.0 5.1% 703.6 624.0 12.8%

Minority Share 9.0 12.2 17.6 21.9

PAT to parent Shareholders 347.3 326.8 6.3% 686.0 602.0 13.9%

Standalone P&L Q2 & H1 FY15

(Rs. In Crores) Q2-FY15 Q2-FY14 Gr % H1-FY15 H1-FY14 Gr %

Total Income from Operations 2,995.7 2,532.0 18.3% 5,736.5 4,851.7 18.2%

Material Cost 1,654.0 1,407.7 17.5% 3,210.2 2,702.5 18.8%

Employee Remuneration 156.9 119.3 31.6% 307.5 254.6 20.8%

Other Expenses 703.8 548.7 28.3% 1,248.2 1,019.0 22.5%

PBDIT 481.1 456.4 5.4% 970.6 875.6 10.8%

Depreciation 56.4 51.5 9.5% 111.1 104.5 6.3%

Profit from Operations 424.7 404.9 4.9% 859.6 771.1 11.5%

Other Income 50.5 47.8 5.6% 99.4 99.9 (.5%)

PBIT 475.2 452.7 5.0% 959.0 871.1 10.1%

Interest 6.4 6.1 4.9% 10.7 10.9 (1.9%)

Profit before Exceptional item 468.8 446.6 5.0% 948.3 860.1 10.2%

Exceptional Item - 25.2 0.0

PBT 468.8 446.6 5.0% 923.1 860.1 7.3%

Taxation 143.1 136.0 5.2% 288.6 265.6 8.7%

PAT 325.7 310.6 4.9% 634.5 594.5 6.7%

EPS 3.39 3.24 6.61 6.20

Key Ratios

% to Income from operations Q2, 14-15 Q2, 13-14 H1, 14-15 H1, 13-14 Q2, 14-15 Q2, 13-14 H1, 14-15 H1, 13-14

Material Cost 55.2% 55.6% 56.0% 55.7% 56.3% 56.7% 56.9% 56.8%

PBDIT 16.1% 18.0% 16.9% 18.0% 14.8% 16.4% 15.6% 16.4%

PBT After Exceptional Item 15.6% 17.6% 16.1% 17.7% 14.0% 15.5% 14.5% 15.2%

PAT 10.9% 12.3% 11.1% 12.3% 9.8% 10.9% 10.1% 10.5%

For Consolidated results, PAT is before Minority Interest

Standalone Consolidated ConsolidatedStandalone