Company information of Asian Paints

Asian paints produce many products ranging from paints and coatings for interiors and exteriors to wood and metal finishes for decorative and industrial use. It is the premier paint company in India, and as the company, it is double the size of most of its peers in the market. The company has its office in about 16 countries, and it has 25 factories around the world in which paint get manufactured. The services of the company are offered globally in 65 countries. The organization aims to become one of the top five companies in the world in the paint segment.

History of Asian Paints

In 1942, Asian Paints was founded in a garage of Mumbai by four friends. It started at a time when the imports of paint were decreased on a temporary basis in India. By 1952, the annual turnover reported by the company was Rs.23 crore, and by 1967 it became the market leader. The company created a mascot Gattu with a paintbrush in hand in 1954 which was used initially in print advertisements of the company, but in the 1990s, it was featured in the television advertisements too. It started expansion outside India in the 1990s. The company stopped halted the use of Mascot in the year 2000. Three families of the founders, along with the Unit Trust of India held about 47.81% shares of the Asian Paint Company.

Management of the Company:

The management of Asian Paints includes Mr. Ashwin Choksi as the Chairman, Mr. Ashwin Dani, the Vice Chairman, Mr. K B S Anand, the MD and CEO, four Non-Executive Directors, six Independent Directors and one additional Independent Director.

Listing information on Stocks:

Asian Paint's shares are listed on the BSE and the NSE.

The equity shares of the company are also traded on the Bangalore Stock Exchange Limited, Cochin Stock Exchange Limited, et cetera.

Other than these, the company is present on indices like the Nifty 100, Nifty LargeMidcap 250, S&P BSE 100 and et cetera.

History of Company Stocks in 2016-2017:

In January 2016, the stock opened at around Rs.878, followed by a peak of nearly Rs.900. In February 2016, the stock began at about Rs.887, subsequently declined in two days to Rs.863. In the next two days, the share recovered immediately reaching Rs.899 but by the end of month closed at about Rs.846. In March, the stock opened at about Rs.871, reaching a high of Rs.899 around mid-March but the lowest price in March was about Rs.845 and by the end of month stock closed at Rs.868.

Thus, for the financial year ending 2016 in the final quarter, the stock fluctuated a lot at higher and lower prices.

The stock began at about Rs.870 in April 2016. The first week of April went with a low rate of about Rs.851 followed by a period of increase and finally closed by the end of the month at about Rs.866.The highest price for May was nearly Rs.998 but the price during month end was around Rs.984. In June 2016 the shares crossed the Rs.1,000 mark, the rate climbed to about Rs.1,032 by the end of the first week. The prices fell back to below Rs.1,000 again but closed at about Rs.1,003 by the end of the month.

Thus, the first quarter of fiscal 2016 was rewarding for Asian Paints regarding stock prices.

The beginning of July 2016 saw a decrease in prices when the stock price became less than Rs.1,000, but for a shorter duration. Rest of the month, the stock continued to increase, reaching Rs.1,100 with a jump of about Rs.28 in it. By the end of the July month, the stock closed at about Rs.1,114. In August, the stock fluctuated between Rs.1,100 and Rs.1,150 and settled at about Rs.1,157 by month end. September 2016 saw a sharp growth with the rate reaching at Rs.1,200, but for the rest of the month, it continued at a lower price than Rs. 1200. The stock closed at about Rs.1,160 by the end of the month.

Thus, the second quarter of 2017 was also beneficial for Asian Paints stocks.

In October 2016, the stock price reached Rs.1,200 twice with a maximum rate of about Rs.1,216. The month saw down of about Rs.1,069, and the stock closed at Rs.1,075 by month end. The stock closed at about Rs.969 by the end of November month. In December, the prices were further declined, making it the lowest rate of the month at Rs.865. For the rest of the month in December, the price didn't cross the mark of Rs900.

In the year 2017, the highest the stock price in January was at Rs.977 and closed at about Rs.970 by month end. The three quarters saw lots of fluctuations in the price with highs and lows.

In the fourth quarter, the first week of October 2017 saw the stock jump Rs.1,150, and it increased to about Rs.1,197 till mid-month. Then the stock reached at Rs.1,200 in the third week of the month, followed by a dip which ended with the stock closing by month end at about Rs.1,180. On the last day of the October month, a dividend of 265% was declared. The stock dropped down to below Rs.1,150 but showed progress immediately. The share then fluctuated between Rs.1,150 and Rs.1,200 and closed at Rs.1,146 in November. In December, the stock price went at Rs.1,150 mark by the month end. The stock held constant at that price, ending the month at Rs.1,158.

Wealth and recent performance:

According to the quarter ended December 2017, the total income of the company was Rs.3,655.79 crore in the third quarter of the fiscal year 2017–2018 as per the audited financial results, lower than the total revenue in the previous quarter which stood at Rs.3,666.04 crore.

In the third quarter of the year 2016–2017, the total income of the company was Rs.3,689.69 crore higher than the total revenue in the third quarter of the financial year 2017–2018.

Total expenses for the second quarter of the company decreased from Rs.2,964.23 crore to Rs.2,852.67 in the third quarter of the financial year 2017–2018.

In the year 2017, the total expenses were Rs.3,045.54 crore in the third quarter.

In the second quarter, the profit before tax for the financial year 2018 was Rs.701.81 crore, and it was Rs.803.12 crore in the third quarter, showed an increase of almost Rs.100 crore.

In the third quarter, the profit before tax of the previous financial year ending 2017 was Rs.644.15.

For the third quarter, the total profit for the financial year ending 2018 was Rs.528.97 crore higher than the total profit for the third quarter in the previous year which was Rs.425.83 crore.

The stock trend in 2018:

In January 2018, the stock price of Asian Paints Ltd. opened at around Rs.1,143, and by the end of January month, it was closed at about Rs.1,126.

In February 2018 the prices surged to Rs.1,153 but dropped again reaching at lower one of Rs.1,110. The stock jumped again but did not reach Rs.1,150. The stock fell to about Rs.1,101 on 23 February, which was its lowest value for February.

In March 2018, the stock rose again but did not cross the Rs.1,120 mark until after the first week.

The stock continues to rise after that.

Why Should one invest in Asian Paints?

The Asian Paints stock has risen almost 7000% by 2017 from the price it had started in the year 2000. The business generated by the company on an invested capital amount produced a return rate of over 35% year after year.

The company has shown an exponential growth for the last three consecutive years 2015, 2016 and 2017. All these indicate that the company is performing very well with high rewards for long-term investors.

Keeping all the given reasons in mind about investing in Asian Paints, it is better to research based on the risk involved, before making any investment.

Stocks or Mutual Funds: Here is our recommendation

A lot of research and knowledge is required in stock market investments, and generally, they don't offer any tax benefits. Hence at mymoneykarma, we merely motivate our readers to invest in mutual funds. Investing in mutual funds doesn't require a lot of knowledge, and equity-linked mutual fund schemes also provide tax benefits. In addition to it, since mutual funds contain stocks from multiple companies, they help in building a diversified portfolio.

Note: The contents of this post/blog do not constitute any professional advice on a specific financial matter.

Indexes and Exchages

Bombay Stock Exchange (BSE)

The Bombay Stock Exchange, popularly called BSE, is Asia's first and oldest stock exchange. Located at Dalal Street in Mumbai, the BSE was formally established in 1875 by an influential stockbroker and businessman called Premchand Roychand. In the initial days, the BSE had its meetings under several Banyan trees in Mumbai before finding a permanent place, which is very appropriately named Dalal Street or Broker Street. After functioning as a floor trading exchange for more than a century, BSE ascended the digital ladder in 1995 by implementing a new screen-based automated trading platform with a capacity of 8 million orders in a day. In 2012, the BSE went global by becoming a Partner Exchange of the United Nations Sustainable Stock Exchange. Subsequently, BSE established India's first international exchange, called INX, in 2016.

National Stock Exchange (NSE)

NSE was set up in 1992 by a group of leading Indian financial institutions, following the Indian Government's directives. It aimed to bring transparency to the Indian capital market. It was India's first demutualized electronic exchange which operated on a completely automated screen-based electronic trading system, offering an easy trading facility to all Indian investors. NSE began its operations in the Wholesale Debt Market segment in 1994. NSE was the first company in India to offer a digital platform that connected the investor base of the entire country. NSE offers services in various segments, such as trading, equity derivatives, clearing and settlement services in equity, debt and currency derivatives, etc.

NIFTY Index

The NIFTY is NSE's flagship index that tracks the behavior of a portfolio of blue-chip companies that have the largest and most liquid Indian securities. It is owned as well as managed by IISL (India Index Services and Products Ltd), which is India's first specialized company to focus on an index as a core product. Nifty indexes 50 of the 1600 companies on the National Stock Exchange (NSE) and is thus popularly referred to as 'Nifty 50'. It captures approximately 65% of its float-adjusted market capitalization and is a true reflection of the Indian stock market. The Nifty 50 includes the major sectors of the Indian economy. It offers the exposure to the Indian market in one efficient portfolio. The Nifty index has been trading since April 1996. It is ideally suited for index funds, benchmarking and index-based derivatives.

SENSEX Index

Sensex is BSE's stock market index. It consists of 30 well-established and financially flourishing companies listed on BSE. It was established in 1986. These 30 component companies are known for being the largest and most actively traded stocks. They represent various industrial sectors of the Indian economy. Sensex is also known as BSE 30 and S&P BSE SENSEX. The word 'Sensex' is a portmanteau of the words 'Sensitive' and 'Index.' SENSEX is widely reported in domestic and international markets through print and electronic media. The indexing system is scientifically designed, based on globally accepted construction and review methodology. Since September 2003, S&P BSE Sensex is being determined on a free-float market capitalization methodology.