Asian paints to invest Rs 4000 crore to increase capacity

Asian Paints is looking to invest Rs 4000 crores this fiscal to increase its capacity by 1.1 million kilo litres at its Visakhapatnam and Mysuru facilities. The capacity expansion would be largest ever for the company. The company would be setting 2 mega plants with initial capacity of 3,00,000 kilo litres each at Mysuru for 2300 crore after which another 5,00,000 kilo litres will be added at Vizag facility.

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Why is this important

Asian Paints is facing problems in the international business as it did not perform well. However in the automotive paint segment the company was able to add new clients like Ford and Hyundai apart from gaining market share in two wheeler segment. The company is now looking to expand its portfolio in Asia and Africa.

How stock will be impacted

The news is positive for Asian Paints (CMP: Rs 1254, M.cap Rs: 120288 cr, 46x FY20E PE).

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