Nerolac vs Asian Paints: Which Is The Better Paint Company?

Being an Indian, you must have heard about two famous paints that are in fierce battle with each other- i.e. Nerolac vs Asian Paints. Which one is better or a better paint company? You may wonder.

Well, it has numerous aspects. If you are looking for painting your home then you need to compare the products and services of both companies. But if you are going to invest in any of the paint companies, then you need to look thoroughly into its financial and business aspects.

Sounds like a tedious task! Isn’t it?

Don’t worry! In this write-up, we are presenting a thorough comparative analysis of Nerolac vs Asian Paints. Whether you’re into quality, color, budget-friendly options, investments, etc. we will help you figure out which one is the best for you.

Stay tuned!

(A) Nerolac vs Asian Paints: A Brief Overview

First of all, let’s have a glance at both the famous Indian paint companies.

(A.1) Nerolac Paints

Kansai Nerolac Paints Limited, previously recognized as Goodlass Nerolac Paints Ltd, stands as India’s leading industrial paint company and the third-largest in the decorative paint sector, with its headquarters situated in Mumbai. 

A subsidiary of Japan’s Kansai Paint, the company holds the third-largest market share in the Indian paint industry, boasting a significant 15.4% as of 2015. 

Specializing in industrial, automotive, and powder coating, Kansai Nerolac Paints is actively involved in developing and supplying paint systems utilized in various applications, including electrical components, cycles, material handling equipment, bus bodies, containers, and furniture industries.

(A.2) Asian Paints

Asian Paints Ltd, a multinational paint enterprise based in Mumbai, Maharashtra, India, stands as a dynamic player in the creation, sale, and distribution of paints, coatings, and diverse products associated with home décor and bath fittings. 

Additionally, the company provides related services to enhance customer experiences. Claiming the title of India’s largest paints company in terms of market share, Asian Paints takes the lead in the vibrant world of colors. 

Serving as the holding company for Berger International, its manufacturing footprint extends across 15 countries globally, including a substantial presence in the Indian subcontinent and the Middle East. 

Asian Paints is not merely a paint manufacturer; it is a creative force shaping living spaces and experiences worldwide.

(A.3) Overall Comparison

(B) Nerolac vs Asian Paints: Business Analysis

Let’s see how these paint companies are performing in the market in terms of various aspects-

In the fiscal year 2023, a comparative analysis of Nerolac Paints and Asian Paints unveils significant differences in their financial performance and business scale. Asian Paints dominates with a colossal market capitalization of Rs.3.12 trillion compared to Nerolac Paints’ Rs.265.11 billion. 

In terms of revenue, Asian Paints dwarfs Nerolac, generating Rs.34,875 crore against Nerolac’s Rs.7,568.71 crore. The operating income for Asian Paints is also substantially higher at Rs.5,594 crore compared to Nerolac’s Rs.634.89 crore.

Profits and net income further emphasize Asian Paints’ financial dominance, with profits at Rs.5,489.60 crore and net income at Rs.4,101 crore, overshadowing Nerolac’s figures. 

Total assets and equity mirror this trend, indicating Asian Paints’ robust financial position with Rs.25,798 crore in assets and Rs.15,992 crore in equity, while Nerolac reports Rs.6,306.36 crore in assets and Rs.4,560.41 crore in equity. 

Additionally, the number of employees reflects the substantial scale of Asian Paints, employing 7,160 individuals compared to Nerolac’s 2,992.

(C) Key Metrics of Nerolac vs Asian Paints

Analyzing the income statements for the fiscal year 2023 reveals distinctive financial performances between Nerolac Paints and Asian Paints. Asian Paints significantly outshines Nerolac in net sales, reporting ₹344,886 million compared to Nerolac’s ₹75,427 million. 

Other income also follows this pattern, with Asian Paints at ₹3,865 million and Nerolac at ₹260 million, contributing to a total revenue of ₹348,751 million for Asian Paints and ₹75,687 million for Nerolac.

The gross profit margin reflects a substantial difference, with Asian Paints boasting 18.3% compared to Nerolac’s 10.8%. 

However, the effective tax rates are quite similar, with Nerolac at 26.2% and Asian Paints at 26.3%. Asian Paints’ higher net profit margin of 12.2% stands out against Nerolac’s 6.2%, showcasing the former’s efficiency in translating revenue into profit. 

Overall, these income statements illustrate Asian Paints’ robust financial performance and efficiency in generating profits compared to Nerolac Paints.

(D) Products and Services

Note: We have also explained Asian Paints vs Berger Paints thoroughly. Visit the article for detailed information.

(E) Stock/Share Data Analysis of Nerolac vs Asian Paints

Examining the financial metrics for Nerolac Paints and Asian Paints provides valuable insights into their respective market positions and investor attractiveness. Asian Paints demonstrates a superior performance in sales per share at ₹359.6 compared to Nerolac’s ₹140.0, indicating a stronger revenue generation on a per-share basis. 

The trailing twelve months (TTM) earnings per share and diluted earnings per share are also substantially higher for Asian Paints at ₹43.7, while Nerolac reports ₹8.7.

Investor valuation metrics reveal that Asian Paints commands a higher price to cash flow ratio at 58.4x, surpassing Nerolac’s 37.1x. Similarly, the TTM P/E ratio and price/book value ratio for Asian Paints are notably higher at 75.2x and 18.5x, respectively, compared to Nerolac’s 49.3x and 5.3x.

The dividend per share further illustrates the financial strength of Asian Paints, distributing ₹25.7 per share compared to Nerolac’s ₹2.7. These metrics collectively highlight Asian Paints’ stronger financial performance and investor appeal in comparison to Nerolac Paints.

(F) Summing up the battle of Nerolac vs Asian Paints

In the colorful showdown of Nerolac vs Asian Paints, the winner emerges as a subjective choice based on individual preferences and investment goals. Yes! You are the one who will select the winner based on your choice.

Asian Paints dazzles with its robust financial performance, superior market share, and investor appeal, showcasing a broader canvas of success. 

On the other hand, Nerolac holds its ground with commendable performance metrics. 

The choice ultimately hinges on factors like risk appetite, financial objectives, and the desire for market dominance. 

Whether opting for Asian Paints’ vibrant brushstrokes or Nerolac’s nuanced hues, you can navigate a palette of choices, each with its unique strokes of opportunity and potential.

Ultimately, the choice between Nerolac and Asian Paints will depend on individual preferences and requirements!