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Informist, Thursday, Jul. 23, 2026

 

By Gunjan Rajput

 

NEW DELHI – Asian Paints Ltd. is expected to report robust earnings growth for the June quarter, driven by healthy demand, dealers stocking ahead of price hikes, and an extended repainting season due to the delayed monsoon. However, elevated crude-linked raw material costs are likely to limit margin expansion despite multiple price hikes implemented during the quarter.
 

Mumbai-headquartered Asian Paints' consolidated net profit is expected at INR 12.63 billion for the June quarter, up nearly 15% from a year ago, according to the average of estimates from 10 brokerages. The highest estimate for net profit is INR 13.23 billion by Anand Rathi Share and Stock Brokers Ltd., and the lowest is INR 11.63 billion by PhillipCapital (India) Pvt. Ltd.

The company's revenue is expected at INR 101.80 billion, up nearly 14% on year, supported by 8-12% volume growth and cumulative price hikes of around 10-15% implemented during the June quarter, according to brokerages. The highest estimate for revenue is INR 104.13 billion by Prabhudas Lilladher Pvt. Ltd., while the lowest is INR 99.21 billion by Nuvama Wealth Management Ltd. On a sequential basis, the net profit is likely to rise nearly 8% and revenue about 10%.

The decorative paints industry is expected to grow around 15-16% on year during the quarter, supported by a delayed monsoon, extending the repainting season and inventory stocking by the dealers ahead of announced price hikes, according to brokerages. Most brokerages expect domestic decorative paint volumes to grow 8-12% on year, while cumulative price hikes are likely to support realisations. Kotak Securities Ltd. also expects Asian Paints to have gained market share during the quarter. Also, the company's international business is expected to largely sustain momentum, with a 12% on year growth, Kotak said.

Despite the revenue growth, brokerages have mixed estimates over gross margins. Most brokerages expect gross margins to decline due to elevated crude-linked raw material costs.  Motilal Oswal Financial Services Ltd. expects the gross margin to contract 20 basis points on year, while PhillipCapital sees it declining by about 130 bps. However, Nuvama Wealth expects gross margin to expand by 151 bps on year, boosted by operating leverage and the low base of last year, when gross margins were unchanged on year. Crude-linked raw materials account for around 30-40% of the company's raw material costs, according to Anand Rathi.

Brokerages expect earnings before interest, taxes, depreciation, and amortisation margin to rise slightly, helped by the company's cost-saving measures. The company's consolidated EBITDA is expected to rise nearly 15% on year to INR 18.66 billion during the June quarter, according to the average of estimates from nine brokerages. The highest estimate for EBITDA is INR 19.17 billion by Axis Securities Ltd., while the lowest is INR 17.43 billion by PhillipCapital.

 

Analysts will closely watch management's comments on decorative paint demand across urban and rural markets, raw material cost trends, pricing actions, competitive intensity, margin outlook and the performance of the international business in the coming quarters.

Asian Paints is scheduled to report its June quarter results on Wednesday. Thursday, shares of the company ended at INR 2,668.80 on the National Stock Exchange, down 0.9% from the previous close. The company's shares are marginally down since Asian Paints reported its March quarter results.

Out of the 14 brokerage reports on the company available with Informist, 11 have a 'buy' or equivalent recommendation on the stock with an average target price of INR 3,143. This is nearly 18% higher than the current market price. Three brokerages have a 'hold' or equivalent recommendation on the stock with an average target price of INR 2,695.

 

The following are the June quarter earnings estimates for Asian Paints from 10 brokerages in descending order of the estimate of net profit in INR billion:

 

Brokerage	Net Sales	Net Profit	EBITDA
Anand Rathi Share and Stock Brokers Ltd.	102.35	13.23
Kotak Securities Ltd.	102.03	13.08	18.95
Prabhudas Lilladher Pvt Ltd.	104.13	13.01	19.16
Axis Securities Ltd.	101.27	12.99	19.17
Motilal Oswal Financial Services Ltd.	104.12	12.86	19.16
JM Financial Institutional Securities Pvt Ltd.	102.09	12.70	18.69
Nuvama Wealth Management Ltd.	99.21	12.37	18.85
Elara Securities (India) Pvt Ltd.	101.51	12.37	18.33
Systematix Shares and Stocks (India) Ltd.	100.85	12.11	18.20
PhillipCapital (India) Pvt Ltd.	100.48	11.63	17.43
Average	101.80	12.63	18.66

 

End

 

Edited by Himanshi Gupta

 

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