Asian Paints Q1 FY26 Results: Resilient Volumes, Margin Pressures Persist
Asian Paints opened FY26 on a mixed note, reporting a slight decline in revenue and profit, while surprising the Street with better-than-expected volume growth. The company posted a consolidated revenue of ₹8,939 crore, down 0.3% year-on-year, and a net profit of ₹1,100 crore, down 6% compared to the same period last year.
Operating margins came under pressure, with EBITDA declining 4.1% to ₹1,626 crore. The EBITDA margin for the quarter stood at 18.2%, down 70 basis points from the previous year. On a standalone basis, revenue fell 1.2% to ₹7,848.8 crore, while net profit dropped 7.5% to ₹1,099.6 crore.
Despite muted topline growth, Asian Paints reported a 3.9% increase in decorative paint volumes, exceeding analyst expectations.
Macros, Margins & Management View
Management attributed the weakness to a subdued macro environment, an early onset of the monsoon, and sustained competitive intensity, all of which affected overall demand, particularly in the home décor segment. Additionally, elevated operating costs weighed on margins.
On the brighter side, the international business grew by 8.4% year-on-year, and urban demand in the decorative segment remained resilient. The industrial coatings segment also showed encouraging signs of revival.
Peer Landscape: Awaiting Full Picture
While Asian Paints has reported, Berger Paints and Kansai Nerolac are yet to release their Q1 FY26 numbers. Berger is scheduled to announce results on August 5, and Kansai has not published its latest quarterly figures yet.
In the previous fiscal, Berger had consistently delivered double-digit profit growth with strong margins, and Kansai Nerolac had posted a Q1 FY25 profit of ₹230.83 crore supported by healthy cash flows.
Until their reports are in, Asian Paints stands out for its volume performance, though all players are likely navigating similar cost and margin pressures.
Market Response & Industry Pulse
Despite the drop in profit and margins, Asian Paints shares recovered post-results, trading around ₹2,400 on the NSE. The market appeared to reward the company's volume resilience and consistent brand performance, even amid a difficult demand environment.
Sector-wide, margin compression remains a key concern as raw material costs stay elevated and competitive pricing heats up. Demand, particularly in rural and home décor segments, continues to be uneven.
Summary & Outlook
Asian Paints delivered a stable yet cautious start to FY26, balancing subdued revenues and profits with better-than-expected volume growth. Its performance underscores both the strength of its core decorative business and the pressures facing the broader paints sector.
With peers Berger Paints and Kansai Nerolac yet to report, the full picture on sector performance will emerge in the coming days.
Looking ahead, Asian Paints’ Q2 results will hinge on the pace of festive season demand, input cost trends, and how well it navigates the increasingly competitive pricing landscape.