Asian Paints posts 16.9 per cent revenue growth as price hikes cushion margin pressure

MUMBAI: Asian Paints managed to pull off a spirited performance in the second quarter ending 30th September 2026, pushing top-line numbers higher even as swelling raw material expenses took a bite out of operating margins.

Consolidated net sales jumped 16.9 per cent to Rs 9,953.89 crore compared to Rs 8,513.70 crore in the corresponding period last year, driven by steady demand in domestic coatings and a strong surge in international markets. On a standalone basis, net sales rose 14.8 per cent to Rs 8,423.62 crore from Rs 7,335.85 crore.

Margins take a hit as raw materials bite

Profit margins faced pressure across the board as the company chose to absorb a portion of input cost increases to protect retail demand. Consolidated operating profit before depreciation, interest, tax and other income (PBDIT) rose 3.6 per cent to Rs 1,557.10 crore. PBDIT margin as a percentage of net sales narrowed by 202 basis points to 15.6 per cent against 17.7 per cent in the second quarter of the previous fiscal.

Standalone PBDIT climbed 5.9 per cent to Rs 1,440.30 crore, while standalone margins dropped to 17.1 per cent from 18.5 per cent. Consolidated profit before tax ended 6.2 per cent higher at Rs 1,477.78 crore. Net profit after minority interest posted a 7.5 per cent gain to touch Rs 1,067.63 crore. Total consolidated profit for the period stood at Rs 1,085.35 crore.

To counter input inflation, managing director and chief executive officer Amit Syngle stated that the company is rolling out another round of staggered price increases while tightening operational efficiencies. The board of directors declared an interim dividend of Rs 5.75 per equity share (575 per cent) with a face value of Re 1.

Domestic volume and segments breakdown

The domestic decorative business logged volume growth of 6.4 per cent and value growth of 14.5 per cent. Industrial coatings delivered a sharp performance, powering ahead with 31.8 per cent growth in value.

Among industrial joint ventures, PPG Asian Paints recorded a 33.7 per cent leap in net sales to Rs 794.80 crore, with profit before tax moving to Rs 112.90 crore from Rs 102.80 crore. Asian Paints PPG registered net sales of Rs 374.50 crore, up 28.0 per cent, though its profit before tax fell to Rs 17.20 crore from Rs 25.90 crore.

In the home décor portfolio, bath fittings revenue grew 18.5 per cent to Rs 94.00 crore, turning around to a profit before tax of Rs 8.70 crore against a loss of Rs 4.00 crore a year ago. The kitchen business posted a 13.0 per cent rise in net sales to Rs 110.30 crore, but loss before tax widened to Rs 7.90 crore. Sales for White Teak dipped 11.8 per cent to Rs 23.30 crore, while Weatherseal edged down 1.8 per cent to Rs 20.30 crore.

Global operations and expenses under the lens

The international business expanded by 29.5 per cent to Rs 1,095.60 crore (23.7 per cent in constant currency terms), with double-digit growth across regions despite geopolitical friction and supply bottlenecks in the Middle East. However, profit before tax for international operations dropped 31.0 per cent to Rs 52.70 crore due to elevated raw material costs.

A close check of consolidated expenditure reveals where the money went during the quarter:

• Material costs: Cost of materials consumed jumped to Rs 5,084.28 crore compared to Rs 3,760.24 crore in Q2 last year. Purchases of stock-in-trade rose to Rs 1,111.58 crore from Rs 983.62 crore.
• Employee costs: Staff expenses climbed to Rs 775.64 crore against Rs 686.22 crore.
• Other expenses (Advertising, marketing & operational outlays): Other expenses, which house advertising and brand-building outlays, marketing costs, freight, and factory overheads, increased to Rs 1,630.51 crore from Rs 1,495.33 crore. Syngle reinforced that brand investment and marketing spend will remain aggressive to capture festive demand.
• Finance costs & depreciation: Finance costs rose to Rs 55.40 crore from Rs 43.87 crore, while depreciation and amortisation came in at Rs 313.67 crore.

Balance sheet and cash flow strength

As of 30th September 2026, consolidated total assets stood at Rs 36,215.03 crore compared to Rs 34,534.49 crore as of 31st March 2026. Inventories increased to Rs 7,262.77 crore from Rs 5,743.69 crore to support stock availability ahead of the festive season. Trade receivables rose to Rs 5,049.44 crore.

On the cash flow front, net cash generated from operating activities for the six-month period (H1 FY27) stood at Rs 1,899.83 crore. The company utilised Rs 604.82 crore for property, plant, and equipment purchases, which included investments in backward integration. Asian Paints commissioned Phase 1 of its Vinyl Acetate Ethylene (VAE) emulsion plant at Dahej, Gujarat, on 17th September 2026, featuring an installed capacity of 1,50,000 tonnes per annum to secure raw material supplies and improve cost competitiveness. Consolidated cash and cash equivalents, including liquid mutual funds, stood strong at Rs 5,510.41 crore.