What's On Your Mind, Mr. Buffett ? 2017

Moats of India

They might lose a battle, but they won't lose the war. What makes them unbeatable?

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Published 4 years ago on Jun 14, 2017 4 minutes Read
Picture courtesy: Rajasthan Amantran

ASIAN PAINTS
Asian Paints is India’s largest decorative paints company with a 65% market share in the segment compared with 15% for its closest competitor Kansai Nerolac, reflecting its unassailable position. The 75-year-old company’s moat is its strong relationship with distributors and a powerful brand association nurtured over decades.

KOTAK BANK
Kotak Mahindra Bank has all the trappings that define a high quality bank – a strong management, durable fee business, and pristine asset quality owing to a well-defined loan-book construct. It’s a trusted consumer brand with all financial product offerings.

HDFC BANK
HDFC Bank has an impeccable record of consistent growth in earnings – 25% over the past 10 years – while maintaining its asset quality. Its retail loans constitute more than 50% of its total book, and even within its wholesale loans it has maintained a low proportion of corporate advances, which has time and again been a source of stress for Indian banks. Low cost deposits (current and savings accounts) account for 48% which is the highest in the industry.

EXIDE
If a mechanic were to ask a car owner the make of his four-wheeler battery, without even checking, 99% would say it’s Exide. That’s the recall it has. Automotive batteries in India is a duopoly and Exide’s moat is being tested by rival Amara Raja, which has

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