PEST ANALYSIS

The pest analysis refers to four main factors:

POLITICAL ECONOMICAL SOCIAL TECHNOLOGICAL

The analysis will focus towards the industry that how the political stability, rules and regulation, and the legal system of the country affecting the overall industry. The economic condition, liberalization, policy toward foreign investment, and growth rate of the economy as a whole also help to analyze the overall industry attractiveness and potential for the growth. The social aspects like people are more involved in the painting process, trend of nuclear family; low interest rate of housing loan, increase of urbanization and change in thinking of the people all this is helpful for the industry consideration, also
Some of these measures will not only support the industry, but also have recurring losses. ECONOMICAL ENVIRONMENT

The market size of the Indian paints sector has been pegged at Rs 170 bn in value terms and is very fragmented. While in value terms, the industry grew by 17% to 18% in FY09, in volume terms, the growth stood at 9% YoY, the lowest in the last five years

Financial Year 2009 was a tough year for the paints industry as the economic slowdown took its toll. Since the paint sector tracks the overall GDP growth, because the latter was lower than the strong growth recorded in the past, the growth in topline for the top three players was not as strong as in the previous years. The market for paints in India is expected to grow at 1.5 times to 2 times GDP growth rate in the next five years. With GDP growth expected to be over and above 7% levels, the top three players are likely to clock above industry growth rates, especially given the fact that protection that was available to unorganised players has come down significantly

For instance, while Asian Paints did well on the topline front during the first half of 2009, things took a turn for the worse in the third quarter wherein sales and profits were severely impacted as the global financial crisis worsened. For the year however, Asian Paints managed to log in a strong