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Informist, Wednesday, Jul. 29, 2026

 

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--CONTEXT: Asian Paints mgmt's comments in post-earnings call with analysts 
--Asian Paints: To start ops of new VAM, VAE tech plant Aug 
--Asian Paints: New products contributed 17% of the revenues Q1 
--Asian Paints: Launching luxury paint brand Nilaya in West Asia market 
--Asian Paints: Took 7% price hike in Q1 vs 25% input cost rise 
--Asian Paints:Near-term business environment uncertain due to W Asia crisis 
--Asian Paints: Raw material, freight costs up due to West Asia crisis 
--Asian Paints: Priority to sustain growth momentum, beat competition 
--Asian Paints: To step up investment in innovation key priority in Q2 
--Asian Paints: Focus on protecting margins, safeguard demand momentum in Q2 
--Asian Paints: Q2 priority also cost efficiency to absorb external pressure 
--Asian Paints: Demand conditions decent in Q1 for paints business 
--Asian Paints: Price hikes differed in industrial paints business in Q1 
--Asian Paints: Hopeful of 8-10% volume growth in FY27 
--Asian Paints: Weak metro demand offset by healthy growth in Tier-II cities 
--Asian Paints: Maintain 18-20?ITDA margin guidance for FY27 
--Asian Paints: Focus on premiumisation, pdt mix for better margin 
--Asian Paints: Pricing growth will be in range of 8-9% in FY27 
--Asian Paints: See rural growth better than urban due to certain pdt mix 
--Asian Paints: Newer launches will make product mix more favourable 
--Asian Paints: Competitive intensity remains high going forward 

 

By Gunjan Rajput and Narayana Krishna

 

HYDERABAD/NEW DELHI – Asian Paints Ltd. expects to deliver 8-10% volume growth in 2026-27 (Apr-Mar) despite an uncertain operating environment due to the West Asia crisis, the company's management said in a post-earnings call with analysts Wednesday. It retained its guidance after reporting 9% volume growth in the June quarter and said demand conditions remained "decent". 

"As we go ahead, possibly some of those indications will also depend whether there would be price changes, would (those) happen in the second half, which would kind of trigger up demand even further in terms of looking at it, but I think at the current stage we are looking at more like the band of eight to ten per cent for the full year at that," an official from the management said.

 

The company said demand conditions in the paints business remained decent in the June quarter. Weak demand in metro cities was offset by healthy growth in Tier-II cities, while rural markets outpaced urban markets because of the product mix. It expects pricing growth of 8-9% in FY27. 

 

"Overall, it won't be that it will be totally depends on the product mix in terms of what is there because there is differential pricing which has happened on each category in terms of what we have taken. So, therefore, I think the product mix will govern in terms of looking at what is the total kind of impact of the pricing which will come. Possibly it could be in the range of about 8-9%," the official added. 

 

The management will focus on maintaining its 18-20% consolidated earnings before interest, tax, depreciation, and amortisation margin in FY27. It will rely on cost efficiencies, premiumisation and a better product mix as higher raw material and freight costs due to the West Asia crisis continue to weigh on the business.

 

"So, I think it is a very difficult thing what we can definitely take in the point is that I think that 18 to 20% guidance is a good guidance to take." 

The paint maker's consolidated net profit rose nearly 40% on year to INR 15.39 billion for the reporting quarter, surpassing the Street estimate of INR 12.61 billion. The company's consolidated revenue rose nearly 18% on year to INR 105.42 billion, above the Street's estimate of INR 101.77 billion.

 

Management said the near-term business environment remains uncertain as the West Asia crisis has increased volatility in raw material prices and freight costs. While the paint industry is largely dependent on crude oil and crude oil derivatives, it said crude oil prices alone cannot be used to gauge margins as several key raw materials are not linked to crude. 

 

"So, it is literally the weighted average which really counts in terms of what we would have kind of really brought at to that extent and, therefore, the direct correlation with crude at this point of time is very difficult to kind of say that if I were to kind of benchmark to a certain level of crude pricing that my margins would kind of land at that," an official from the management said. 

 

The company raised prices by about 7% in the June quarter even as input costs increased about 25%. It added that price increases in the industrial paints business take longer to be implemented because of customer contracts. 

"So actually, if you look, in industrial, the price increase action comes in a little bit more deferred and, therefore, the entire pricing action will not kind of reflect here because what happens is that some of the B2B (Business-to-Business) customers and key accounts the whole process of price increase is something which basically takes a bit of time. It's not like in the decorative market that you can announce the price increase and basically from the next day it is implemented to that extent. So it takes a bit of time in terms of looking at the industrial segment," the official added. 

 

Asian Paints said protecting margins, safeguarding demand momentum and improving cost efficiency will remain its priorities in the September quarter. It will also step up investments in innovation as it looks to sustain growth momentum and outperform competition amid elevated competitive intensity across segments.

 

New products contributed 17% of revenue in the June quarter, and the company expects newer launches to make the product mix more favourable going forward. Asian Paints also said commercial operations at its new vinyl acetate monomer and vinyl acetate ethylene technology plant will begin in August.

 

Asian Paints said it is strengthening its premiumisation strategy in international markets through new product launches. The company has introduced its luxury paint brand Royal Stellar in the UAE, Bahrain, and Oman, and ultra-premium product Acrycoat Novi in Egypt. It is also launching its luxury brand Nilaya Arc Pearlescent in the UAE, Bahrain and Oman as it seeks to strengthen its presence in the premium paints segment. The company said it is also leveraging innovations developed for the Indian market, including waterproofing, premium paints and luxury emulsions, in overseas markets such as Nepal.

 

The company detailed its June quarter results during the market hours. Wednesday shares of the company closed at INR 2,758.40 on the National Stock Exchange, up 0.8%.  End

 

Edited by Deepshikha Bhardwaj

 

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