Asian Paints Q1 FY26: Profit Drops YoY, But Strong Rebound Seen QoQ

Asian Paints reported a 6% year-on-year (YoY) fall in its net profit for the first quarter of FY26. The profit stood at ₹1,100 crore, down from ₹1,170 crore in Q1 FY25. Its revenue from operations also saw a slight drop, coming in between ₹8,924–8,939 crore, just below last year’s ₹8,943–8,969 crore.

However, compared to the previous quarter (Q4 FY25), the company’s performance improved sharply. Profit jumped 59% quarter-on-quarter (QoQ) from ₹692 crore to ₹1,100 crore. Revenue also rose by 7% QoQ, up from ₹8,330 crore in the last quarter.

In the Decorative Paints segment (India), the company saw a volume growth of 3.9% YoY, but revenue declined by 1.2%. This was due to weak consumer sentiment, early monsoons, and a less profitable product mix. On the other hand, the international business performed well, with about 8.4% revenue growth, led by strong sales in Asia, the UAE, and Egypt. The Industrial Coatings segment also did well, especially in the auto and protective coatings categories.

Analysts noted that the results were in line with expectations. The profit of ₹1,100 crore was close to the average analyst estimate of ₹1,108 crore. After the announcement, the share price dipped briefly but later rose about 2%, showing cautious optimism among investors.

Brokerage views were mixed:

- Antique: Hold, Target Price ₹2,469

- Avendus: Reduce, Target Price ₹2,300

- Motilal Oswal: Neutral, Target Price ₹2,500

Margins were impacted due to price cuts introduced across India to counter competition and boost demand. Also, a 1.3% increase in total expenses, including higher sales and marketing spends, added pressure. However, the monsoon season did not affect decorative paint sales in urban areas as much as expected.

In summary, while Asian Paints showed muted YoY numbers, it delivered a much stronger QoQ performance. Growth in international markets and industrial coatings helped balance the softness in domestic decorative paint revenues. With analyst expectations met, the company appears to be navigating market challenges reasonably well.