Analysis Of MRF Paints - Expect Valuation Multiples To Remain Elevated: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.MRF Paints, a 100% subsidiary of MRF Ltd., has a 0.7% share of the paint market in India in FY22 and is largely focused on the southern region of the country. It operates under the brand equity of MRF Vapocure and it has likely higher market shares in industrial paints and wood coatings in south India than its reported pan India share of the total paint market. It is steadily introducing new paints and is now present in floor paints as well as wall paints. We note the company’s gross margin is ~50%, i.e. in line with its peers, indicating strong brand equity as well as similar trade margins /schemes. However, its Ebitda margin (10-12%) is significantly lower than peers due to: likely higher ad-spend, andlower scale of operations. While increase in competitive intensity is likely to hurt most incumbents (including MRF Paints), we believe the smaller paint companies will be acquisition targets for new entrants and large players, hence they are likely to maintain higher valuation multiples..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Analysis Of MRF Paints - Expect Valuation Multiples To Remain Elevated: ICICI Securities

Analysis Of MRF Paints - Expect Valuation Multiples To Remain Elevated: ICICI Securities

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