Consolidated sales rose 16.9% in the September quarter, but a sharp fall in gross margin squeezed operating profitability as raw-material costs climbed.
Asian Paints delivered a mixed set of quarterly results in the three months to September 2026, with sales rising faster than analysts had expected but profitability coming under pressure from higher input costs. According to the company’s investor disclosures, consolidated net sales rose 16.9% year on year to ₹9,953.9 crore, while consolidated net profit increased 7.5% to ₹1,067.6 crore. Standalone revenue climbed 14.8% to ₹8,423.6 crore, while standalone profit advanced 14.6% to ₹1,095.6 crore. The numbers confirm that demand remained healthy, even as the benefit did not fully flow through to margins.
The strongest feature of the quarter was top-line momentum. Asian Paints said domestic sales grew 15% and the India decorative business posted value growth of 14.5%, with volumes up 6.4%. Industrial paints performed even more strongly, with revenue rising 31% year on year. The company said growth in its standalone business was helped by solid volume demand and a better product mix, while management also pointed to traction in rural and urban markets, the services arm, business-to-business sales, waterproofing and preventive maintenance.
Margins, however, told a less comfortable story. Operating profit margin fell by 200 basis points to 15.6%, as a 350 basis-point slide in gross margin offset lower other expenses and staff costs. Asian Paints said it had raised prices by 7% in the June quarter and by 5% in the September quarter, and announced an additional 3.5% increase in November 2026 to help absorb raw-material inflation and the impact of anti-dumping duty on titanium dioxide. The company has kept its FY27 operating margin guidance at 18% to 20%, but that target will depend on demand holding up and commodity costs not worsening.
Brokerages remain divided between support for the company’s longer-term franchise and caution over near-term earnings. PL Capital expects double-digit earnings growth over the next two quarters on the back of festival demand and earlier price increases, but says margin volatility could persist if crude prices move sharply or supply chains remain unsettled. Anand Rathi Research retained a buy view and sees room for operating margin expansion over FY26-29, helped by backward integration and recent pricing actions. Kotak Research, by contrast, cut its earnings estimates and target price, arguing that stronger competition from Birla Opus and better traction at JSW Dulux may keep unit growth and revenue growth restrained over the next few years. The stock has already fallen about 15% over the past three months, and at around ₹2,315 it trades at roughly 39 times FY28 earnings estimates, leaving limited room for error if margin pressure persists.
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