Asian Paints - ‘Risk Reward’ In Tiles Appears To Be Attractive: ICICI Securities
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ICICI Securities Report
Asian Paints Ltd. is test-marketing/introduced designer tiles maintaining the template of entering at least one new business each year in last seven years.
In our view, designer tiles can open up additional revenue opportunity of ~Rs30,000 per household.
APNT can leverage (1) its existing brands and (2) relationships with real estate developers (initially to achieve critical size).
It can also offer better value to consumers via (1) matching tiles with paints and (2) protection against damp walls.
However, APNT may need to invest in distribution as there is limited overlap in paint and tile retail outlets.
The skill sets, labour charges/hour of painter and mason are also different.
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