UBS India Conference 2016

Mumbai

November 17, 2016

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 FY17

Financial Performance – Q2 FY17

Business Review – Q2 FY17

Risks and Outlook

Agenda

Group Overview

No. 1Paint Company

in India

Servicing

Consumers in over

65 Countries

Part of

30 share

BSE

S&P SENSEX

Over

USD 2 Billion

Group revenue

Operations in

19countries

49 Years of Market

Leadership in India

26Paint

Manufacturing

Plants

Forbes Asia’s Fab

50Company; Four

times in a row

3Times nearest

Competitor in India

4thLargest Paint

Company in Asia

14th Largest Coating

Company In the World

7000+

Employees

worldwide

Part of NSE Nifty

50

Asian Paints Group Today…

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

14.2

10.9 10.2

9.7

5.5

4.6 4.5 4.4 4.1

3.6 2.9

2.6 2.4 2.3 2.0 2.0 1.9

1.5 1.2 1.2

In B

illio

n U

SDGlobal Standing…

* Coatings World – 2016 Top companies report (July 2016)

4th largest in Asia

14th largest in the World

Sherwin Williams will be the largest coatings company with its announced acquisition of Valspar

Worldwide Operations…

Jamaica

Barbados

Trinidad & Tobago

Egypt

Oman

Bahrain

UAE

Nepal

India

Sri Lanka

Bangladesh

Singapore

Solomon Islands

Vanuatu

Fiji

Samoa

Tonga

EthiopiaIndonesia

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 / AP Homes

Samplers

Beautiful Homes Guide

Water Proofing and Wallpaper business

Ezycolour Service brand

Home Solutions (Painting solution service)

Colour Consultancy @ Home

Adhesives

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 40,000 dealers

Signature Stores in

Metros

Colour Ideas Stores AP Homes

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).

Planning to set up new, fully-automated paint manufacturing facility at Mysuru and Vizag in South

India 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

Business Portfolio

• Decorative Coatings – India

• Industrial Coatings – India

• PPG Asian Paints

• Asian Paints PPG

• International Operations

• Home Improvement Business – India

• Sleek

• Ess Ess FY 2015- 2016

81%

2%4% 13%

Decorative - India Home Improvement - India

Industrial - India International Operations

Decorative Coatings - India

Largest business unit of the company

Primarily operates in four segments

Interior Wall finishes

Exterior Wall finishes

Metal Finishes (Enamels)

Wood Finishes

Introduced new categories like water-proofing, wallpapers & adhesives

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 USA

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 Coatings)

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 18 countries spread over 4 regions

Focus on establishing presence and growing in high growth emerging markets

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

Acquired 51% stake in Kadisco Chemical Industry PLC, Ethiopia in Feb 2015

Setting up paint manufacturing facility at Indonesia

Caribbean : Jamaica, Barbados and Trinidad & Tobago

Middle East & Africa : UAE, Bahrain, Oman, Egypt & Ethiopia

Asia : Nepal, Sri Lanka, Bangladesh, Singapore & Indonesia

South Pacific : Fiji, Tonga, Solomon Islands, Vanuatu & Samoa

11.0%

54.7%

27.9%

6.4%

Caribbean

Middle East & Africa

Asia

South Pacific

FY 2015-2016Net Sales Break-Up

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

Launched “Smart kitchen range” for easy installation and design

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 business segment in India and has high quality

products in this segment

Launched Sanitary ware range ‘Bathsense’ & premium range of Bath fittings ‘Royale’

Chemicals

Asian Paints manufactures Phthalic Anhydride (PAN) and Pentaerythritol (Penta)

PAN manufactured in Gujarat and Penta in Tamil Nadu

More than 50% consumed internally

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

16,000

2005-2006 2015-2016

3,021

15,534

Consolidated Net Sales and Operating Income ( ` Crores)

CAGR 17.8%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2005-2006 2015-2016

212

1,726

Net Profit (` Crores)

CAGR 23.3%

Sustained value creation...

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2005-2006 2015-2016

6,178

83,326

Market Cap (` Crores)

CAGR 29.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

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

20

14

-15

20

15

-16

73%

52% 51%54%

39%

46% 47% 49% 51% 53% 54%

Dividend Payout Ratio

Recent Accolades…

Rated as the 5th ‘Most valuable Brand’ in India – Sept 2015 (Compiled by marketing and brand

consultancy Millward Brown and WPP Group)

Included in Forbes India’s List of “Super 50 companies in India’ in 2016

Felicitated as one of the ‘MOST IMPACTFUL COMPANIES OF THE DECADE’ by CNBC Awaaz in Jan

2015

Included in Forbes Magazine's – ‘Asia's Fab 50’ List of cos 4 years in a row from 2011

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

Economic Environment – Q2 FY17

Financial Performance – Q2 FY17

Business Review – Q2 FY17

Risks and Outlook

Presentation structure

Group Overview

Economic Environment

The domestic economy maintained its growth trajectory of near 7% GDP growth.

However, the expected pick-up has not materialized and the demand environment remainschallenging

India’s GDP advanced 7.1% yoy in the first quarter of FY17; slowing from a 7.9% expansion in thelast quarter of FY16

On the positive side, rainfall in the monsoon season, though lower than forecasts, was only 3%below normal and had a good spatial distribution

Growth prospects for the global economy continues to be weak

Apprehensions around Brexit, Fed tightening continue to cast uncertainties in the globalfinancial markets

Economic Environment – Q2 & FY17

Financial Performance – Q2 FY17

Business Review – Q2 FY17

Risks and Outlook

Presentation structure

Group Overview

NEW ACCOUNTING STANDARDS (IND AS)

We have adopted the Indian Accounting Standards (‘IND AS’) with effect from 1st April, 2016.Accordingly, the Standalone and Consolidated results for the quarter ended 30th June, 2016are in compliance with IND AS and other accounting principles generally accepted in India andthe results for the comparative quarters and previous year have been prepared to comply withIND AS.

Some key changes on account of this are as follows:

Incentive to dealers by way of cash discounts and sales promotion expense have beendeducted from Sales against being reported as part of Expenses under the Previous GAAP.

Excise duty which was earlier being deducted from Sales is now presented as an Expense.

No impact of the above 2 changes on the profits.

Acquired Goodwill, resulting from acquisition of Sleek and Ess Ess business will not beamortized but will be tested for impairment on an annual basis. Certain other intangible assetsare considered to have indefinite useful life under IND-AS and hence will not be amortized buttested for impairment on annual basis.

NEW ACCOUNTING STANDARDS (IND AS)

Continued…

All investments (Excluding Subsidiaries/JV’s and other equity investments) are carried at fair

value as required under IND-AS. Gain / Loss resulting from change in fair valuation between

the reporting dates will be recorded in the P&L. At the same time, Gain / Loss on equity

investments (Excluding Subsidiaries/JV’s) resulting from change in fair valuation between the

reporting dates will be recorded in the OCI statement.

All assets of an acquired entity will have to be reported at fair valuation. Accordingly, fixed

assets of Kadisco, Ethiopia, acquired in Feb 2015, now recorded at fair value as at the date of

acquisition (as against book value as per earlier standards) and depreciation charged on such

increased value.

Under IND-AS, PPG-AP to be treated as an associate company wherein only APL’s share of

Profit after Tax of PPG-AP consolidated as against proportionate consolidation of every line

item of P&L. At the same time, AP-PPG to be consolidated as a subsidiary of APL in the

consolidated financials.

Financials – Q2 FY17 results

29

Gro

wth

ove

r La

st Y

ear

Standalone Revenue Growth Trend

30

The 10.2% growth in Q2FY17 & Q1FY17 is as per the new Indian Accounting Standards (IND AS) which was adopted wef 1st April 2016 ; hence it not comparable with the numbers for the previous quarters

The Board of Directors at its meeting held on 25th October 2016, recommended payment

of interim dividend of ` 2.65 per share (265%)

In FY 2015-16

Total Dividend of ` 7.50 per share (750%)

Final dividend of ` 5.30 per share

Interim dividend of ` 2.20 per share

Payout ratio of 54.1% for the year (on standalone financials)

In FY 2014-15

Total Dividend of ` 6.10 per share (610%)

Final dividend of ` 4.30 per share

Interim dividend of ` 1.80 per share

Payout ratio of 52.6% for the year (on standalone financials)

Dividend

31

Economic Environment – Q2 FY17

Financial Performance – Q2 FY17

Business Review – Q2 FY17

Risks and Outlook

Presentation structure

Group Overview

Business Review : Q2 FY17

DECORATIVES BUSINESS

Decorative Paints business in India registered low double digit volume growth in the second quarter

Prolonged monsoon impacted retail paint demand in Western and Central India

Favourable raw material prices aided profitability

Witnessing some upward movement in input prices

No Price revision done in Q1 & Q2 FY17

Cumulative price decrease of 2% for FY16 against increase of 0.39% in FY15

Price decrease of 2% effective 26th Feb’16

Continued focus on network expansion and opening new ‘Colour Ideas’ store

35,000+ ‘Colour World’ machines and 300+ ‘Colour Ideas’ stores across the country

SmartCare range of waterproofing products continues to grow well

Good response to “AP Homes” store in Coimbatore

Integrated décor store across categories of paints, wall papers, kitchen, bath fittings, sanitary ware, furnishings, light fittings, etc

Business Review : Q2 FY17

INDUSTRIAL BUSINESS

PPG-Asian Paints (PPG-AP)

Witnessed good demand in the Auto OEM and General Industrial business segment

Asian Paints PPG (AP-PPG)

Industrial Liquid Paints segment continued to grow well

Raw Material prices remained low as compared to previous year, aiding the profitability of

both these industrial businesses

Under IND-AS, PPG-AP to be treated as an associate company wherein only APL’s share of Profit after Tax of PPG-APconsolidated as against proportionate consolidation of every line item of P&L. At the same time, AP-PPG to be consolidatedas a subsidiary of APL in the consolidated financials.

Business Review : Q2 FY17

INTERNATIONAL BUSINESS

The international business reported good numbers specifically aided by contribution from good pick- up

in demand in Nepal, Fiji and certain units in the Middle East

Moderate growth witnessed in Ethiopia, which continued to be impacted by foreign exchange shortfall

Construction of the greenfield plant at Indonesia in progress

HOME IMPROVEMENT BUSINESS

Both the segments within the Home Improvement business – the Kitchen business under ‘Sleek’ and the

Bath business under ‘Ess Ess’, registered good growth in the current quarter

This was aided by expansion in network and enhanced product portfolio

Continue to work on further streamlining the business model in both these businesses

Capex

Total capex at APL Standalone level for FY17 estimated to be about ` 600 crores

Includes some spends on the two new paint manufacturing facility to be built at Vizag (Andhra Pradesh) and Mysuru (Karnataka)

Revision of the proposed paint manufacturing capacity of Vizag

The total capacity will be 5,00,000 KL/annum (4,00,000 KL announced earlier)

Investment outlay of ` 1785 crores (` 1750 crores announced earlier)

No change in Mysuru plant plan

6,00,000 KL plant with an investment of approximately ` 2300 crores

Both plants to come up in phases depending on future demand conditions

Economic Environment – Q2 FY17

Financial Performance – Q2 FY17

Business Review – Q2 FY17

Risks and Outlook

Presentation structure

Group Overview

Risks & Outlook

Demand conditions expected to improve in the coming quarters

Uptick from the rural segment on the back of good monsoon a well as beneficial impact of the pay commission payouts

Raw material prices have seen an upward trend in the last couple of quarters

Need to monitor this trend very closely

In the International markets, units like Egypt, Ethiopia & Trinidad continue to face challenges around

foreign exchange availability and demand conditions

Thank you

40

STANDALONE Q2 & H1 FY 2016-17

` In Crores

41

CONSOLIDATED Q2 & H1 FY 2016-17

` In Crores

KEY RATIOS

42

For Consolidated results, PAT is before Minority Interest

% to total Income from Operations Q2 FY 17 Q2 FY 16 H1 FY 17 H1 FY 16

Material Cost 60.4% 61.7% 59.2% 61.6%

PBDIT 16.8% 15.8% 18.4% 17.1%

PBT 16.6% 15.5% 18.1% 16.7%

PAT * 11.7% 10.9% 12.6% 11.7%

Consolidated

% to total Income from Operations Q2 FY 17 Q2 FY 16 H1 FY 17 H1 FY 16

Material Cost 60.1% 61.7% 58.9% 61.6%

PBDIT 17.8% 16.7% 19.6% 18.1%

PBT 18.0% 16.8% 19.7% 18.3%

PAT 12.2% 11.5% 13.5% 12.6%

Standalone