Asian Paints acquired a mainframe computer for Rs 80 million in 1970 . Asian Paints developed a computerized colour tinting system at the end of the decade and became one of Indias first private companies to own one .
Asian Paints acquired a mainframe computer for Rs 80 million in 1970.Asian Paints developed a computerized colour tinting system at the end of the decade and became one of Indias first private companies to own one.In 2008, Asian Paints acquired data on the quality, texture, and quantity of paints purchased all around India, from centralised order management to supply chain management.They also continue to hold proprietary data on the paint demand for each neighborhood.To continually raise the overall demand forecast, they also use advanced artificial intelligence (AI) and machine learning (ML).Over the past few years, more than two-thirds of India's listed companies have been focusing on technology-led capex.And the RBI capex reports and company annual reports point to this fact.The share of intangible assets (other than goodwill) in the balance sheets has soared dramatically. But they could not be more correct.There are also several evidence that suggest that the capex will continue.The technology-related ones are also of paramount importance.First and foremost, India's corporate earnings per capita growth is now at a decade high.Though the dramatic rise in profits was first recorded in 2012, it was bolstered by solid balance sheets rather than macro tailwinds.Average operating margins, which are now at 16.7%, were first observed in 2005. No organizations have splurged on expensive inorganic growth.They also haven't slashed their balance sheets.Most are leaner during the pandemic by paying off debt obligations, plus the lenders themselves are in good financial shape.Profits have increased in the last few quarters not only in the private sector, but also in public sector banks. The start of the capex boom (both technological and physical) could raise the share of company income to GDP even higher in the coming decade, indicating that the denominator of your PE ratio can be increased.Stocks will begin to be cheaper, so as an observer, the best thing you can do is ensure that the companies you own are doing their part to help fight the capex crash.They should not only allocate their funds wisely, but also use the surge in cash flows and profits to increase capacity.(Avertisment:)This video is a video posted on Equitymaster.com.