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7/13/2018 Asian Paints Brightens Up India's Growing Middle Class 1/6 Aug 28, 2013, 05:45pm • 11,489 views What is This? Asian Paints Brightens Up India's Growing Middle Class Forbes Guest Contributor Forbes Asia i This story appears in the September 2013 issue of Forbes Asia. Subscribe to Forbes Asia By Anuradha Raghunathan If you wanted to have a paint company, you'd want to be in an industrializing country, where millions of people were joining the middle class and buying their first homes. And you would have started it decades ago, lining up paint dealers in every little town so you'd already have a lock on the market when the country takes off. To keep your head start, you'd obsess about customer service, stay on top of the latest technology and hire professional managers trained at the best schools. This is how Asian Paints came to dominate the walls and ceilings of India, creating three billionaires along the way. Asian Paints started in 1942, reached the top of the Indian market in 1967 and has stayed there ever since. It now sells through 35,000 dealers across India. Over the last five years its revenue has nearly doubled, to $2 billion for the year ended Mar. 31. Profits have more than doubled over the same period, to $205 million for that year. And the stock has jumped 140% since August 2008, giving it a market capitalization of $6.3 billion. It's now Asia's third-largest paint company, behind Japan's Kansai and Nippon, and the world's 13th largest. This year it appears on the Fab 50 for the third time in a row. "The company knows its customers well," says Adrian Lim, senior investment manager at Aberdeen Asset Management, a
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7/13/2018 Asian Paints Brightens Up India's Growing Middle Class 2/6 U.K. firm that owns 1.6% of Asian Paints. "It has resilient business plans, healthy cash flows and a strong balance sheet." The Mumbai company--which sells interior and exterior paint and similar products--has been refashioning itself into a home decor company, hoping to benefit from India's soaring urbanization and the increasing willingness of customers to spend more on their homes. "There's been a massive transformation in the Indian consumer," says K.B.S. Anand, Asian Paints' managing director and chief executive. "Earlier, people used to paint when the walls were peeling. Now it's about decor. A person can choose a particular pattern with a particular color. We perceived this before most of our competition." To capitalize on the trend, the company launched a premium range of paint in 2004 called Royale Play. Each paint adds a different special effect to interior walls, lending them a metallic luster, a soft sheen or a stucco finish, for example. Asian Paints lined up Bollywood star Saif Ali Khan to promote the premium line.
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