A

SUMMER INTERNSHIP PROJECT REPORT

ON
“RATIO ANALYSIS
”FOR
“KANSAI NEROLAC PAINTS LTD.”

At Lote, Parshurum
BY
“Mr. RAJAT CHAUHAN”

”Under the guidance of

“Mr. JAYANT MAHAJAN”

Submitted to
“INSTITUTE OF TECHNOLOGY AND MANAGEMENT”
 ACKNOWLEDGMENT

It is my greatest pleasure to acknowledge sincere

gratitude towards Mr. DAMAN SINGH(HR Manager)
who gave me a good opportunity to do my project in
the Kansai Nerolac Paints ltd.

I am also grateful to Mr. ANKIT(HR Officer),

MANIK (Commercial Manager) and other officers
who are working in accounts department for their
valuable advice, cooperation and support in completion of
my project.

I am also thanks to ICA, Ankit Daman & Co. who helped

me to making this project.

Regards
RAJAT CHAUHAN
 INSTITUTE OF TECHNOLOGY AND
MANAGEMENT

EC ROAD, DEHRADUN

(Affiliated to HNB UNIVERSITY, Srinagar)

CERTIFICATE

This is to certify that Mr. RAJAT CHAUHAN

has submitted the Summer Internship Report titled
RATIO ANALYSIS completed at KANSAI
NEROLACPAINTS LTD. as per requirements of the
three years full time Bachelor of Business
Administration (BBA) course of Institute Of
Technology and Management for 6 Semester of
the academic year 2017-19.
 Mr. Jayant Mahajan
(Project Guide)

TO WHOM SO EVER IT MAY CONCERN

This is to certify that Mr. RAJAT CHAUHAN 6th semester

B.B.A. student from Institute of Technology and
Management, Dehradun was engaged as an“Inplant Trainee”.

In our factory from 25thJune 2018 to 4thAugust 2018, he

has completed his training successfully.

During his entire training period he was found to be

sincere, hardworking and punctual.We wish his success in
his future assignments.

For

ICA, Ankit Daman & Co.

DAMAN SINGH
(Chartered Accoumtant)
 EXECUTIVE SUMMARY

This project is specially designed to understand t

he subject matter of Financial Statement Analysis
through various ratios in the company. This
project gives usinformation and report about
company’s Financial Position. Throughout the
projectthe focus has been on presenting information
and comments in easy and intelligible manner.

The purpose of the training was to have

practical experience of working in anorganization
and to have exposure to the various management practices
in the field of Finance.This training has also given
me an on the job experience of Financial
Management.

This project is very useful for those who want to know

about company and financial position of the company.
 2. INDIAN PAINT INDUSTRY

The success story of the 100 years old Indian paint

industry began whenShalimar Paints set up a factory in
Calcutta the way back in 1902. In the beginning
theindustry was
mainly comprised of number of small producers and very
few major players.

Immediately after the Second World War, though the

Indian Paint Industry hadseen numerous local
entrepreneurs, the foreign companiesLike Goodlass
Walls (now Kansai Nerolac), ICI, British Paints (now
Berger Paints),Jenson & Nicholson and Blundell
& Eomite have been dominating the market for many
years.
Sector trends and specifics

The Indian paint industry is mainly segmented into two

categories – industrialand decorative paints. While
industrial paints are used for protection against
corrosionand rust on steel structures, vehicles, white
goods and appliances, decorative paints areused in
protecting valuable assets like buildings. In most
developed countries, the ratio of decorative paints vis-à-
vis industrial paints is around 50:50. But, in India
the industrialpaint segment accounts for only 30%
of the paint market while the decorative
paintsegment accounts for 70% of paints sold in
India. Within the decorative segment, theshare of
exterior paints is 21%, interior emulsions 11%,
distempers 30%, solvent-basedenamel paint 36% and
wood finishes two percent. The exterior category,
particularlyexterior emulsions, is the fastest growing
segment at 20% for the last three years. Theindustrial
coatings segment includes high performance coatings
with 30% market share,powder coatings with ten
percent, coil coatings with five percent, marine
coatings fivepercent and automotive coatings 50%.
Demand and Growth

The demand for decorative paints is highly price-

sensitive and also cyclical.Monsoon is a slack season
while the peak business period is Diwali festival
time, whenmost people repaint their houses. The
industrial paints segment, on the other hand, is ahigh
volume-low margin business. Total paint and
coatings demand in India in 2008amounted to 1.64
million tons, of which decorative coatings
represented 79% or 1.3 million tons. The industrial
coatings market in India still remains relatively small
incomparison at about 340,000 tons, and this is
dominated by structural and infrastructuralapplications
associated with the protective coatings market.Despite
having recorded a healthy growth of 13% annually in the
1990s, the per capita consumption of paints in India is
very low at 0.5 kg per annum as compared to 4kg in
the South East Asian nations and 22 kg in developed
countries. And the globalaverage per capita
consumption is 15 kg.
Threats

The industry is raw-material sensitive. Of the 300 odd raw

materials, nearly half of them are imported petroleum
products. Thus, any deficit in global oil reserves
affectsthe bottom-line of the players. The demand for
paints is relatively price-elastic but islinked to the
industrial and economical growth. Mainly the
construction and automobilesector throws shades of
grey across the industry spectrum during
recession in thosesectors. Evidently the
slowdown in automotive business had a direct
impact on thegrowth of Industrial paint sale business
this year. Despite having phenomenal real GDPgrowth at
9% for the last five years, the consumer durables
basket, that forms a part of Index of Industrial
Production (IIP), has shown a negative growth during
2007-08. Thishad a direct impact on the paint sale
business last year.

Opportunities
Although industry figures expect some modest
abatement in growth in theIndian paint and coatings
market, particularly in the short term, the prevailing
economicclimate of infrastructure investment and
renewal holds the key to most of the growth inthe
Indian coatings market.

Other opportunities in India are pegged to the transport

sector. Car ownership inIndia stands at little more than
one percent. However, rising affordability and the
launchof economical cars such as the Tata Nano are
expected to propel the market for OEMcoatings and
refinishes in the coming years. Higher demand for
marine paints can beexpected in the next decade, once
investments in ports and port development have started to
reach fruition. As India is hopeful of competing with
other established ship building nations, the
multinationals are likely to find plentiful opportunity
in India, given thecompliance requirements imposed by
effects of international legislation on marine paints.

Powder coatings are also a good growth market in

India, growing at about tenpercent per annum, which is
typical of the mean coatings segment growth in the
country.This segment has been finding new applications
in India and represents one area in whichthe
consciousness of VOCs and the environment has
been raised. Indian companies arenow beginning to
appreciate the benefits of cleaner technology once initial
investment infinishing in this area has been made.
However, it is in the decorative coatings market thatthe
greatest volume growth can be expected.

Almost another 900,000 tons of decorative paints may

well be in use by 2013, prompted by a whole breadth of
different
applications,ranging from the construction of housi
ng and apartment blocks to civil and touristameni
ties. The structure of the decorative paint market in
terms of quality is changingvery slowly with growth in
the premium and economy sectors squeezing the
intermediatequality segment to about 35‐40% of demand.
Other habits are changing too including the formal entry
of Sherwin‐Williams, Jotun and Nippon Paint into
the Indian decorativesector, which has started to
bring a much greater international dimension and
muchbigger budgets
to the Indian decorative paint market. Although t
he
arrival of thesec o m p a n i e s i n t h e s e g m e n t h a s
not had a major impact on the market yet, Ind
i a n consumers are becoming more experimental and
adventurous in their use of paint and asa result many
traditional ideas are being given up in favor of trying
something different,especially as the Indian population is
a relatively young one.
Market Profile

The organized sector of India’s paint and coatings

market holds a whopping 65% share of the
approximately Rs. 13600 crore industry, while the
balance is made upof over 2000 unorganized units.
There are now twelve major players in the
organizedsector namely Asian Paints, Kansai
Nerolac, Berger, ICI, Shalimar, and so on.
Recentyears, the industry has attracted world leaders like
Alzo Nobel, PPG, DuPont and BASFto set up base in
India to offer product ranges such as auto refinishes,
powder coatingsand industrial coatings.

Asian Paints (APIL) is the industry leader with an

overall market share of 33per cent in the
organized paint market. It has the largest
distribution network among the players and its
aggressive marketing has earned it strong brand equity.
The Berger Groupand ICI share the second slot in the
industry with market shares of 17 per cent
each.GNPL has a market share of 15 percent in the
organized sector.
APIL dominates the decorative segment with a 38
per cent market share. Thecompany has more than
15,000 retail outlets and its brands Tractor, Apcolite,
Utsav,Apex and Ace are entrenched in the market.
GNPL, the number-two in the decorativesegment,
with a 14 per cent market share too, has now increased its
distribution network to 10,700 outlets to compete with
APIL effectively. Berger and ICI have 9 per cent and 8per
cent shares respectively in this segment followed by J&N
and Shalimar with 1 and 6per cent shares.

On the other hand, GNPL dominates the industrial

paints segment with41 per cent market share. It has a
lion's share of 70 per cent in the OEM passenger
car segment, 40 per cent share of two wheeler OEM
market and 20 per cent of commercialvehicle OEM
market. It supplies 70 per cent of the paint
requirement of Maruti, India'slargest passenger car
manufacturer, besides supplying to other customers
likeTelco, Toyota, Hindustan Motors, Hero Honda,
TVS-Suzuki, Mahindra & Mahindra,Ashok Leyland,
Ford India, PAL Peugeot and Bajaj Auto. GNPL also
controls 20 per cent of the consumer durables
segment with clients like Whirlpool and Godrej GE.
The company is also venturing into new areas like
painting of plastic, coil coatings and cans.APIL, the
leader in decorative paints, ranks a poor second after
Goodlass Nerolac in theindustrial segment with a 15 per
cent market share. But with its joint venture Asian-
PPGIndustries, the company is aggressively targe
ting the automobile sector. It has nowemerged as a
100 per cent OEM supplier to Daewoo, Hyundai, Ford
and General Motorsand is all set to ride on the automobile
boom. Berger and ICI are the other players in the sector
with 10 per cent and 9 per cent shares respectively.
Shalimar too, has an 8 per centshare.