Synopsis: Akzo Nobel India Ltd., a small-cap player in the chemical sector, stunned the market with a 1,618% year-on-year surge in net profit for Q2FY26, driven by a one-time exceptional gain. Despite this record figure, the stock price remained flat, raising questions about investor sentiment and the sustainability of such earnings.
This article explores the disconnect between financial performance and market reaction, analyzing whether the muted response signals caution or a hidden opportunity for long-term investors.
Akzo Noble with a market capitalization of Rs.14,709.52, trading at Rs.3,257.5 opened flat at Rs.3,230 from its previous day close of Rs.3,218 and made a day low of Rs.3,158.35. It has delivered a return of 51.54% in the last 3 years.
QoQ view
The revenue of the company declined 16% from Rs.995 crore in Q1FY26 to Rs. 835 crore in Q2FY26. Operating profit declined by 17.17% from Rs.134 crore in Q1FY26 to Rs. 111crore in Q2FY26. Net Profit increased from Rs.91crore in Q1FY26 to Rs.1,683 in Q2FY26, but it includes an exceptional item worth Rs.1,874 crore.
YoY view
The revenue of the company declined by 14.96% YoY in Q2 FY26 from Rs.982 crore to Rs.835 crore, accompanied by an increase in PAT from Rs. 98 Crore to Rs. 1,683 Crore. With a volume growth of 3% & decline of 24% in the operating profit from Rs.146 crore to Rs.111 crore.
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Business highlights
In Q2 FY26, the company reported continued growth in its B2B business on high base and a slowdown in its growth due to its B2C Business impacted by severe weather conditions in geographies & short festive season. Where it holds around 16% market share in the premium segment & 7% in the paint industry.
The company reported exceptional items amounting to Rs.1,874 crore– profit from slump sale of Powder Coatings business division and the International Research Center division. Which brings the firm’s focus to core decorative paints signaling improved ROCE & ROE in the coming quarters.
About the company
Akzo Nobel India Ltd. is one of India’s leading paint and coatings companies, known primarily for its Dulux brand of decorative paints. It’s the Indian subsidiary of Akzo Nobel N.V., a global Dutch multinational headquartered in Amsterdam, known for coatings, paints, and specialty chemicals.
Brands: Dulux Velvet Touch, Dulux Weathershield, Dulux SuperClean and Dulux Simply Refresh. With a Distribution network over 15,000 retail outlets across India. Key products: Interpon powder coatings, International protective coatings, and specialty coatings for OEMs and steel structures.
The company delivered a ROCE of 41.7% with ROE of 32.2%, reflecting efficient allocation of resources. Additionally, this quarter it has a dividend payout of 106% with dividend yield of 3.02%, suggesting strong cash flows.
Written by Gourav Pratap Singh
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