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Investor Presentation Q1 - FY 2007

Presentation structure
Results : Q1 FY 2007 Results : FY 2006 Outlook and Risks : FY 2007

Highlights : Consolidated Results Q1 FY2007

Consolidated Sales have grown by 17.3% to Rs. 7773 mn Strong performance by the Indian Paints business and the Middle East region PBDIT has increased by 26.3% to Rs. 1096.9 million PBDIT/Net Sales has improved to 14.1% from 13.1 % Most Raw Material prices have been benign during the quarter. As a result to RM/Net sales ratio improved to 57.5 % from 60.0% Other expenses as a proportion to Net Sales increased to 21.4% from 19.2% - due to the increase in freight and handling charges PBT after goodwill increased by 33.% to Rs. 911.9 million Net Profit increased by 37.7% to Rs. 603.0 million

Consolidated P&L Q1 FY 2007

Consolidated Sales breakup : Q1 FY 2007

* 50 % of Asian PPG Industries sales are included @ Period considered Jan - Mar

Asian Paints Standalone P&L Q1 FY 2007

Asian Paints Decorative Business Unit

Demand was buoyant in almost all segments of the decorative coatings business in India Growth recorded over a higher base which arose due to VAT implementation in the previous corresponding quarter Raw material prices have been benign during the quarter The price of Titanium dioxide reduced by 4 % to USD 1965 /ton compared to the price in Mar06 Price of mineral turpentine oil however increased by 20 % since the last quarter Prices of raw materials were rising towards the end of the quarter In June06, the company increased prices on solvent based products by around 2 %. This price increase will partially offset the increase in input costs for solvent based products

Asian Paints Industrial & International Business Unit

Industrial business in India grew in excess of 20% Due to good growth registered by the automotive, powder and road markings segment. The international business recorded satisfactory growth in excess of 10%. All five operating regions viz. Caribbean, Middle East, South Asia, South East Asia and South Pacific registered sales growth The Middle East and South Asia region registered sales growth in excess of 20%

Key Ratios

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Presentation structure
Results : Q1 FY 2007 Results : FY 2006 Outlook and Risks : FY 2007

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Dividend
Total dividend of Rs. 12.50 / share distributed for FY 2006
Includes one time special dividend of Rs. 2.5 /share on the occasion of the 60th year of incorporation of the company Dividend payout ratio at 62 % (before Extra Ordinary Item)

Total dividend distributed in FY 2005 was Rs. 9.50 per share

Dividend payout ratio was 60 %

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Highlights - Consolidated results FY2006

Paint volumes for the year including international increased by 14.9% to 406,791 KL Deco-India, Industrial-India and International volumes registered double digit volume growth Sales growth of 17.4 % driven by Good growth registered by Paints-India business and the Middle East region

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Consolidated P&L FY 2006

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Consolidated Sales breakup : FY 2006

* 50 % of Asian PPG Industries sales are included

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Asian Paints Consolidated Results FY2006

Standalone Industrial Operations International Operations

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Standalone P&L : FY2006

EOI (Extra Ordinary Item) Provision for diminution in value of Investment.

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Standalone P&L : FY2006

Extraordinary item pertains to diminution in value on international investments of Rs. 336 million provided based on managements assessment of the fair value of the investment This has arisen due to erosion in the net worth of certain subsidiaries in South East Asia and South Asia

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Paints : Decoratives India FY06

Demand for decorative paints was good Excellent growth in all wall finish products 7000 Colour Worlds now installed in the country Pricing FY 2006
Deco BU increased prices in June and Nov05 Reduced prices in some emulsion paints in Dec05 Overall in FY2006 price increase was around 0.5%

Asian Paints Home Solutions

Added 2 cities in FY2006. APHS is now present in 10 cities

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Paints : Decoratives India FY06

New Products
Apex Ultima nationwide launch completed; the product comes with a warranty offer Royale Play an effect finish launched in many markets Quality upgrades done in Royale and Premium Emulsions Utsav economy range of products was widened with several new introductions

Sriperumbudur plant achieves installed capacity

Excellent all round performance Capacity now raised to 50,000 KL/ annum

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Paints : Decoratives India FY06

Price of TiO2 stable for the last ten months Prices of solvents have increased significantly Prices of monomers, additives and vegetable oils have decreased in the last six months

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Asian Paints Consolidated Results FY2006

Standalone Industrial Operations International Operations

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Industrial Operations
Sales for automotive JV (APPG) increased by 17.7% to Rs. 2798 million Both OE and refinish segment performed well. Bilux the economy PU brand saw yet another year of impressive growth making it the largest selling brand in its category Sales for powder coatings business (APICL) increased by 36.4 % to Rs. 390 million Baddi plant in Himachal Pradesh commissioned in April06 for 1400 MT in first phase

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Industrial Operations
The other industrial coatings business which is part of the standalone company services the protective coatings, road markings, floor coatings segments This business grew by over 20% due to very good growth in the protective coatings segment

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Asian Paints Consolidated Results FY2006

Standalone Industrial Operations International Operations

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International Operations : FY2006

Paint value sales increased by 15.7% to Rs. 5.3 bn
Operating margins were under pressure as material costs increase was significant Increase could be passed on to the consumer in some markets

IBU reported a higher loss (after minority interest, before goodwill) of Rs. 99.7 million (FY05 loss at Rs 39 million) due to Higher material costs Additional income tax provision of Rs 45 million made in BIL for earlier years. An appeal has been filed and outcome is awaited Higher share of loss from associate company in Philippines and from subsidiaries in China, Malaysia, Thailand, Bangladesh and Sri Lanka

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International Operations : FY2006

The performance of the Middle East, Caribbean and South Pacific regions has been good
Performance of SCIB Paints Egypt has been excellent

South Asia and South East Asia region underperformed

Steps have been taken to reduce losses ERP solution launched and implementation in most of the international units

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Region wise Sales Breakup

Caribb ean 24.9%

2005
Caribbe an Middle 27.1% East 36.9%

2004
Middle East 32.6%

South Pacific 12.3% S.E. Asia 16.9% South Asia 9.0%

South Pacific 13.3% S.E. Asia 18.7%

South Asia 8.3%

Middle East region has once again registered the highest growth at 30%

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Region wise EBITDA & ROCE FY 2005 & FY 2006

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Asian Paints Standalone - Cash Flow

Operating cash flow is higher by 40% inspite of higher tax outflow
Last years cash flow was affected by higher inventory levels due to lower offtake in Mar05 in view of VAT from Apr05

Capital expenditure for FY06 lower at Rs 543 mn

Estimated Capex for FY06 was Rs. 900 mn CAPEX for FY07 is estimated at Rs. 1500 mn

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Key Ratios
Standalone Consolidated

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Presentation structure
Results : Q1 FY 2007 Results : FY 2006 Outlook and Risks : FY 2007

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Outlook and Risks FY2007

India Paint Industry expected to grow by over 12-13 % by value In Decorative paints emphasis would continue to be to drive top-line growth Demand for industrial coatings will continue to be buoyant

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Outlook and Risks FY2007

International
Investments in International subsidiaries reviewed periodically and the Company is looking at rationalising its investment portfolio The focus for international business is to grow the top-line and to improve profitability The Caribbean, Middle East and South Pacific regions are expected to perform better during 2006. Focus is on increasing market share through initiatives viz. new product introductions, dealer tinting systems, entry into new export markets. Steps have been taken to reduce losses in the South East Asia and South Asia regions.

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Thank you...