Asian Paints

Asian Paints reported flat consolidated net sales for Q1 FY26 compared to Q1 FY25, remaining at ₹8,924 crores. Standalone net sales experienced a 1.2% de-growth. The overall coatings business achieved a volume growth of 4.2%, primarily driven by strong industrial business performance. Consolidated gross margins stood at 42.6%, an increase of 20 bps year-on-year, while PBDIT margin was 18.2%, 70 bps lower than Q1 FY25.

The decorative business in India recorded a volume growth of 3.9% in Q1 FY26, a decrease from 7.1% in Q1 FY25. Value growth for this segment was negative at -1.2%. Management noted a slight uptick in demand sequentially across T1, T2, T3, and T4 cities, but early monsoons in June acted as a dampener for the business. Luxury emulsions did not perform as expected, with some down-trading observed in the market during the quarter.

The Home Decor segment experienced degrowth due to subdued consumer discretionary spends. The Kitchen business saw a ~2% revenue degrowth to ₹98 crores, resulting in a PBT loss of ₹9 crores, an increase from ₹3 crores in Q1 FY25. Similarly, the Bath business recorded a ~5% revenue degrowth to ₹89 crores, with a PBT loss of ₹2 crores, consistent with Q1 FY25. White Teak (decorative lights) sales were impacted by BIS challenges and subdued retail demand, leading to a 32% degrowth to ₹20 crores, while Weatherseal (uPVC windows) grew 32% to ₹15 crores.

The international business demonstrated strong performance, growing 8.4% in INR terms and 17.5% in constant currency, with PBT surging to ₹38 crores from a loss of ₹19 crores in Q1 FY25. The overall industrial business grew almost 8.8%. PPGAP (auto refinishes, industrial marine) achieved double-digit revenue growth, though PBT margin declined to 16.9% from 19.2% due to competitive pressures. APPPG (protective paints, powder coatings) saw a modest 5% revenue growth, with PBT margin at 8.1% compared to 10.2% in Q1 FY25.

Asian Paints continues its focus on innovation, with new products contributing approximately 14% to overall revenues in Q1. Key launches included the 'All Protek' premium emulsion with Lotus effect technology and the 'Nilaya Arc' luxury lime-based paint. The company is also progressing with backward integration projects, including a VAM VAE emulsion plant in Dahej and a white cement plant in Dubai, both expected to improve cost efficiency and product differentiation from Q1 FY27.

Management anticipates a normal monsoon aiding rural demand and expects inflation to remain in control, despite the anti-dumping duty on TiO2. The competitive intensity is noted as high, driving the company to focus on innovation, brand saliency, and regionalization strategies. The company aims for single-digit overall growth in the near term and maintains its PBDIT margin guidance of 18-20%, supported by operational efficiencies and favorable raw material costs.