Asian Paints profit rises 7.5% to 1,067.6 crore rupees as margins contract
Key Facts
Asian Paints said on October 29 that its consolidated net profit was 1,067.6 crore rupees in the quarter ended September 30, 2026, up 7.5% year on year. Profit growth was slower than sales growth, with sales rising 16.9% to 9,953.9 crore rupees in the second quarter of fiscal 2026-2027. The results showed a widening gap between revenue and profit growth amid higher input costs and declining margins. Chief Executive Amit Singhal said the quarter saw the full impact of a sharp rise in raw material prices and availability constraints linked to geopolitical disruptions. He added that the operating environment this year had been marked by these pressures and that their full impact emerged in the second quarter.
Consolidated profit before depreciation, interest, tax and other income (PBDIT) was 1,557.1 crore rupees, up 3.6% year on year, while its margin fell 202 basis points to 15.6% from 17.7% a year earlier. This coincided with a 35% rise in expenses for materials consumed to 50.84 billion rupees, according to data reported by Reuters. The figures show how operating profit accounted for a smaller share of sales despite revenue growth, as expenses rose faster than operating profit. Margins had widened in the second quarter of the previous fiscal year to 17.7% from 15.5% in the corresponding period a year earlier. The current-period decline therefore followed an annual improvement in the margin in the previous comparison.
In domestic operations, the paints and coatings business recorded value growth of 16.4%, supported by volume growth of 6.8% in the second quarter. In decorative paints in India, value rose 14.5% and volume 6.4% year on year. The figures show domestic activity expanding in both value and units sold, with value increasing faster than volume in both businesses. At group level, consolidated sales growth of 16.9% outpaced the 7.5% increase in net profit. In the second quarter of the previous fiscal year, consolidated sales rose 6.4% to 8,513.7 crore rupees, while net profit after minority interests climbed 43% to 993.6 crore rupees.
International business sales grew 29.5% to 1,095.6 crore rupees, but the segment's pretax profit fell 31% to 52.7 crore rupees. The results highlight a divergence between international revenue expansion and declining profitability in the same quarter. In the Indian market, paint companies face tougher competition as Aditya Birla Group's Birla Opus enters the market and JSW expands in decorative paints, according to Reuters. The competition comes as raw material costs and availability weigh on margins. Sales growth in both international and domestic businesses also failed to prevent slower profit growth, according to the reported figures.
Profit came in below the average analyst estimate of 11.45 billion rupees, according to LSEG data reported by Reuters; consolidated profit was 10.68 billion rupees, up 7.5% year on year. The company also raised prices by about 12% in July to counter inflation, Reuters reported. The company said it is implementing another round of staggered price increases in its paints business, alongside intensifying cost-efficiency initiatives. The board declared an interim dividend of 5.75 rupees per share. Asian Paints' preliminary financial calendar sets January 19, 2027, as the date for announcing results for the third quarter and nine months of fiscal 2026-2027.