Please refer to important disclosures at the end of this report
Akzo Nobel India Ltd (Akzo) is one of the leading paint manufacturers in India
under the brand name ‘Dulux’. Akzo has ~11% share by revenue among the top
5 players. It manufactures and markets a wide range of coatings (contributes
~90%) and specialty chemicals & others (~10%). We expect Akzo to report
revenue at 11% CAGR to `3,773cr and Adj. PAT at 25% CAGR to `375cr ove
FY2016-19E on the back of recovery in the real estate sector, reduced repainting
cycle, strong brand and expansion in specialty chemical. Notably, at present,
Akzo is at lower valuations as compared to its peers in the industry. EV/Sales fo
Akzo is at 2.4x FY2019E, whereas all the peers (Asian Paints, Berger Paints &
Kansai Nerolac) are above 3x, and the company’s EV/EBITDA is in lower teens
(15.3x FY2019E), whereas peers are in 20x category. Moreover, Akzo is currentl
trading at 23.3x P/E on FY2019E EPS, which is below its peers. We believe that
the stock provides opportunity at these levels with attractive and relativel
cheaper valuations to the peers. The Company is virtually debt free. The
Company has been maintaining a good dividend yield of 3.7% and health
dividend payout. The company has reported a healthy profit growth of 15%
CAGR and return on equity of 15% for the last 3 years. Hence Buy.
CMP `1,912
Stock Info
Bloomberg Code
Shareholding Pattern (%)
Promoters 73.0
MF / Banks / Indian Fls 8.4
FII / NRIs / OCBs 1.8
Indian Public / Others 16.9
Abs. (%) 3m 1yr 3yr
Sensex 7.4 13.6 28.8
Akzo Nobel 44.2 44.5 117.9
Reuters Code AKZO.BO
BSE Sensex 29,319
Nifty 9,105
Face Value (`)
Paints / Varnishes
Market Cap (
cr) 8,947
52 Week High / Low 1,971/1,305
Avg. Daily Volume 2,386
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
kzo Nobel India
Others | Paints / Varnishes
April 19, 2017
Akzo Nobel India | Paints / Varnishes
pril 19, 2017
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website:
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Disclosure of Interest Statement Akzo Nobel India
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
: Reduce
-5% to -15%
< -15