Alpha Ideas 20-20: Why Negen Capital’s Neil Bahal Thinks This Paint Maker Stands Out
A laborer pours yellow water-based paint into a plastic jar at a Kamal Paint Industries manufacturing facility in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)  

Alpha Ideas 20-20: Why Negen Capital’s Neil Bahal Thinks This Paint Maker Stands Out

Negen Capital’s Neil Bahal is bullish on Delhi-based Sirca Paints India Ltd., a company specialising in the production of coatings for wood.

The company has a long-term distribution agreement with Sirca Italy—a model similar to that of Domino’s in India— where it imports, repackages and sells wood coatings. Bahal said the paints maker’s revenue has been compounding 25 percent every year.

So what makes it special? The opportunity, Bahal said at the Alpha Ideas 20-20 event in Mumbai.

The wood coating industry in India is growing at 20 percent as consumers have started opting for premiumisation. The market in Sri Lanka and Bangladesh is almost as big, he said. “Now if European countries want to sell to these countries, the customs duty for exporting there is 100 percent and is unviable,” he explained. “But if you manufacture in India, the customs duty falls to 5 percent.”

So that gives Sirca an opportunity to not only grow in India but also grow in an equally bigger market right next to it.
Neil Bahal, Negen Capital.

And that’s exactly what the company plans to do as it will start local manufacturing from next year, he said.

Watch Neil Bahal’s Presentation Here

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