Asian Paints Q2 Profit Rises 7.5%; Raw Material Inflation Squeezes Margins

New Delhi: Asian Paints Ltd on Thursday reported a 7.5 per cent year-on-year increase in consolidated net profit at Rs 1,067.6 crore for the September quarter, as strong sales growth across domestic coatings and international markets was partly offset by rising raw material costs and pressure on operating margins.

Consolidated net sales rose 16.9 per cent to Rs 9,953.9 crore in the quarter ended September 30, while profit before depreciation, interest, tax and other income (PBDIT) increased 3.6 per cent to Rs 1,557.1 crore, the country’s largest paintmaker said in a statement.

The PBDIT margin contracted to 15.6 per cent from 17.7 per cent a year earlier, reflecting the impact of sharp raw material inflation and supply constraints linked to geopolitical disruptions. The company said it absorbed part of the cost increases to protect consumer demand while implementing calibrated price hikes.

The board declared an interim dividend of Rs 5.75 per share, equivalent to 575 per cent of the face value.

Asian Paints’ domestic coatings business recorded value growth of 16.4 per cent, supported by volume growth of 6.8 per cent. Its decorative paints business in India posted value growth of 14.5 per cent and volume growth of 6.4 per cent, while industrial coatings continued to outperform, with value growth of 31.8 per cent.

“The operating environment this year has been marked by sharp raw material inflation and material availability constraints driven by geopolitical disruptions, the full impact of which was felt in Q2,” Amit Syngle, managing director and chief executive officer, said.

“With inflationary pressures showing little sign of easing, we are implementing a further round of staggered price increases in the coatings business, while intensifying our cost-efficiency initiatives,” he said.

International business sales increased 29.5 per cent to Rs 1,095.6 crore, or 23.7 per cent in constant-currency terms, with growth across all regions. However, segment profit before tax fell 31 per cent to Rs 52.7 crore, highlighting the uneven translation of sales growth into profitability.

The company also reported progress in its home decor businesses. Bath fittings revenue rose 18.5 per cent to Rs 94 crore, with the segment returning to a pretax profit of Rs 8.7 crore from a loss a year earlier. Kitchen revenue increased 13 per cent to Rs 110.3 crore, although its pretax loss widened to Rs 7.9 crore.

Asian Paints commissioned the first phase of its vinyl acetate-ethylene (VAE) manufacturing facility at Dahej in Gujarat during the quarter. The investment is intended to strengthen backward integration, improve cost competitiveness and support the development of differentiated products.

The company’s standalone net profit rose 14.6 per cent to Rs 1,095.6 crore, while standalone revenue increased 14.8 per cent to Rs 8,423.6 crore. Its standalone PBDIT margin narrowed to 17.1 per cent from 18.5 per cent a year earlier.

For the first half of FY27, consolidated net sales rose 17.4 per cent to Rs 20,475.3 crore and net profit after minority interest increased 24.5 per cent to Rs 2,606.9 crore. The consolidated PBDIT margin improved to 18.2 per cent from 17.9 per cent in the year-earlier period, indicating stronger first-half profitability despite the margin compression in the latest quarter.

Asian Paints said it would focus on pricing, brand building, innovation and service-led differentiation through the festive season as it seeks to sustain sales momentum while countering persistent input-cost inflation.

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