🎨 JSW Just Bought the Desi Dulux Dealer – But Is Akzo Nobel India Worth Repainting at ₹3,685?

🎨 JSW Just Bought the Desi Dulux Dealer – But Is Akzo Nobel India Worth Repainting at ₹3,685?

🧠 1. At a Glance

Akzo Nobel India — maker of Dulux Paints and OG Dutch MNC — just got scooped up by JSW Paints via a ₹13,332 Cr open offer. While the stock trades at a shiny ₹3,685 (vs open offer price of ₹3,417), fundamentals are rock solid: ROCE 42%, zero debt, and 106% dividend payout. But slow revenue growth (9% in 5 years) is the stain no primer can hide. Will JSW bring the fresh coat of growth?


🎬 2. Introduction with Hook

What happens when your neighborhood paint shop suddenly becomes the center of a corporate custody battle?
Answer: Akzo Nobel India Ltd, an MNC with impeccable financials but growth so slow even Berger Paints overtook it in a spray.

Now, JSW Paints is buying out the Dutch parent’s entire 74.76% stake and has triggered a juicy ₹3,417.77 open offer. Market price? ₹3,685. So why are investors paying more than the offer? 🤨

Because Akzo may be boring, but it’s profitable AF. And now, with JSW’s aggressive DNA, this might just become the Asian Paints it never was.


🏭 3. WTF Do They Even Do? (Business Model)

  • Akzo makes and sells decorative paints, industrial coatings, wood finishes, and specialty chemicals.
  • Flagship brand? Dulux Paints, known for its “Let’s Colour” campaigns.
  • They operate across B2C (retail paint market) and B2B (protective coatings for marine, automotive, power infra).
  • They also provide R&D services to group companies globally — royalty + service revenue = recurring cash.

So, you’re not just buying paint — you’re buying a cash-rich MNC with legacy clients and steady repeat demand.


📈 4. Financials Overview – Profit, Margins, ROE, Growth

MetricFY21FY22FY23FY24FY25
Revenue (₹ Cr)2,4213,1493,8023,9624,091
Net Profit (₹ Cr)208290335427429
OPM %14%14%14%16%16%
ROE22%28%35%42%32%
ROCE22%28%35%42%41.7%
EPS (₹)45.663.773.693.794.1

🔥 Highlights:

  • Revenue CAGR (5Y): ~9% – that’s like watching paint dry.
  • Profit CAGR (5Y): ~13% – much better, thanks to margin expansion.
  • Dividend payout: 91.5% avg. — Akzo doesn’t hoard, it shares 💸

💸 5. Valuation – Is It Cheap, Meh, or Crack?

  • CMP: ₹3,685
  • P/E: 39.2
  • Price / Book: 12.6
  • Dividend Yield: 2.71%
  • Historical P/E Avg: ~30–35x

📌 Verdict: “Meh with a touch of froth”
At 39x earnings, you’re paying a premium for capital efficiency + dividend consistency. But growth? Not quite Asian Paints level.

📊 FV Range Calculation:
Let’s use FY25 EPS = ₹94.1
Fair PE range = 28x (slow growth) to 36x (post-JSW optimism)

👉 Fair Value Range = ₹2,635 to ₹3,388

🔔 So yes, CMP is above the FV range — inflated by the open offer drama.


🍲 6. What’s Cooking – News, Triggers, Drama

🧾 The Paint Soap Opera:

  • JSW Paints to acquire 74.76% stake at ₹2,762.05/share (SPA)
  • Open offer price: ₹3,417.77/share (to public)
  • Total Deal Value: ₹13,332 Cr
  • Akzo’s Powder Coatings + R&D biz already being sold for ₹3,295 Cr internally
  • GST notices galore — Karnataka, Odisha, Bengal… Akzo’s tax paint is peeling

🎯 Big trigger: Can JSW turbocharge Akzo’s B2C reach and distribution? If yes, this becomes Berger 2.0.


🏦 7. Balance Sheet – How Much Debt, How Many Dreams?

MetricFY25
Debt₹62 Cr (negligible)
Cash & Investments~₹2,300 Cr
Equity₹46 Cr
Reserves₹1,283 Cr

💡 Debt-free + cash-rich = ready for inorganic growth or fat dividends.
Akzo is the rare MNC that doesn’t use debt like primer.


💰 8. Cash Flow – Sab Number Game Hai

  • FY25 CFO: ₹311 Cr
  • FCF: Positive
  • Capex: Controlled (₹67 Cr CWIP)
  • CFI & CFF show net cash outflows due to dividends and rights issue

🔁 Repeat after us: Dividends > Acquisitions for Akzo
JSW may reverse that with an India-first expansion push.


📊 9. Ratios – Sexy or Stressy?

RatioValue
ROCE41.7% ✅
ROE32.2% ✅
OPM16% ✅
Inventory Days95
Debtor Days52
Cash Conversion-3 (efficient!)

📈 Operational efficiency = tight.
But sales growth is meh. If JSW brings volume growth, these ratios could become sexy and scalable.


💸 10. P&L Breakdown – Show Me the Money

  • FY25 Revenue: ₹4,091 Cr
  • FY25 PAT: ₹429 Cr
  • FY25 EBITDA: ₹642 Cr
  • FY25 EPS: ₹94.1
  • Dividend Payout: 106% (!)

Akzo doesn’t reinvest like Indian peers. It pays out.
Post-acquisition, expect that to change if JSW wants scale > stability.


🤼 11. Peer Comparison – Who Else Is in the Game?

CompanyROCEOPMP/EFY25 PATDividend Yield
Asian Paints25.7%17.7%60.7₹3,925 Cr1.0%
Berger Paints25.1%16.1%57.5₹1,180 Cr0.6%
Akzo Nobel41.7%16.0%39.2₹429 Cr2.71%
Indigo Paints19.5%18.1%39.7₹144 Cr0.3%
Kansai Nerolac13.0%12.0%34.2₹591 Cr1.0%

📌 Takeaway:

  • Akzo wins on ROCE + yield, loses on growth
  • Asian Paints still miles ahead on valuation and brand
  • Berger & Indigo are rising stars; JSW-Akzo combo could finally challenge them

🧾 12. Misc – Promoters, Shareholding, Other Gyaan

  • Promoter stake: 74.76% (being sold to JSW)
  • FII holding: 3.68%
  • DII holding: 8.49%
  • Public float: 13.08%
  • Shareholders: ~48,140

🕵️‍♂️ What changes post-deal?

  • JSW becomes the new promoter
  • Expect strategy revamp, rebranding, maybe even synergy with JSW Steel & infra biz

🧑‍⚖️ 13. EduInvesting Verdict™

Akzo Nobel India is not a growth stock. It’s a dividend ATM with Dutch discipline, now getting a desi makeover from JSW.

The market’s current price > open offer suggests investors expect JSW to unlock value. But even with all that ROE, the revenue still needs a jetpack.

FV Range: ₹2,635 to ₹3,388

CMP: ₹3,685 = Open offer euphoria built-in

🎭 Final Word:
JSW has the brush. Akzo is the canvas. What they paint next… could be either masterpiece or misstep.


✍️ Written by Prashant | 📅 9 July 2025
Tags: Akzo Nobel India, JSW Paints, Dulux, Open Offer, Paint Stocks, ROCE Leaders, Asian Paints, Berger, Takeover News, EduInvesting

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