Asian Paints Limited

Asian Paints reported a strong Q2 FY26, with consolidated Net Sales growing by 6.4% and standalone Net Sales increasing by 5.8% to ₹7,336 crores. The company achieved a consolidated Gross Margin of 43.1%, an expansion of 250 bps over the previous year. Consolidated PBDIT grew by 21.3%, with the PBDIT margin improving by 220 bps to 17.7%. This performance was attributed to a series of internal initiatives and benign raw material prices, despite the overall industry growing at a modest 3.5-4%.

The company emphasized several initiatives, including a significant increase in brand building, dialing up innovation with new products like Royale Glitz and Sparc Shyne, and igniting services like 'Beautiful Homes Painting Service' and 'Total Assure'. Regional market ignition, widening the B2B net beyond conventional builders to include factories, hospitality, and government, and backward integration projects were also key. These efforts contributed to a broad-based growth across urban and rural centers, with new products now contributing over 15% of revenue.

The Decorative Business in India achieved a robust 10.9% volume growth and 6.0% value growth in Q2 FY26. For the first half of FY26, volume growth stood at 7.2% and value growth at 2.1%. This strong performance was supported by improved consumer sentiments, early festive season demand, and broad-based growth across urban and rural centers. The Prelux category, in particular, saw improved offtake due to marketing efforts.

The International Business demonstrated strong growth, with revenue increasing by 9.9% in INR terms and 10.6% in constant currency in Q2 FY26. Key units in Nepal, Sri Lanka, and UAE were primary drivers. The segment's profitability also saw significant improvement, with the PBT margin reaching 9%, higher by 450 bps, supported by material cost deflation and divestment of loss-making operations in Indonesia.

The Industrial Business continued its strong momentum. The PPGAP segment, covering auto OEMs, refinishes, packaging, and marine, grew revenue by 13% in Q2 FY26 and 12% in H1 FY26, with a PBT margin of 17.3% (up 160 bps). The APPPG segment, focused on general industrial and protective coatings, delivered 10% revenue growth in Q2 FY26 and 7% in H1 FY26, with its PBT margin improving by 190 bps to 8.9%.

The Home Decor segment, encompassing Kitchen, Bath, White Teak, and Weatherseal, presented mixed results. Kitchen revenue declined by 7% to ₹98 crores, though PBT loss reduced to ₹4 crores. Bath revenue was ₹79 crores, down 5%, with PBT loss also reducing to ₹4 crores. White Teak revenue decreased by 15% to ₹26 crores. Weatherseal, however, showed strong growth of 57% to ₹21 crores. Management acknowledged this segment as an 'area of work' with initiatives planned for the second half of the year.

Raw material prices remained benign, with a deflation of approximately 1.6% in Q2 FY26, following a 1% deflation in Q1 FY26. This, coupled with sourcing and formulation efficiencies, supported the expansion of gross margins. The standalone gross margin improved to 43.7% in Q2 FY26, up 270 bps from the same quarter last year. The company expects raw material prices to remain stable in the near term, though geopolitical uncertainty^🌐 could pose a risk.

Asian Paints successfully commissioned its white cement plant in Fujairah, UAE, operating at about 90% capacity. The company also committed a CAPEX of approximately ₹3,250 crores for the VAM-VAE project, with one part nearing completion and expected to unfold in Q1 next year. This project is anticipated to bring significant differentiation and cost supremacy through next-gen emulsions.