Synopsis:
Although analysts gave Asian Paints mixed ratings, the company reported a mixed Q1FY26 performance with strong QoQ profit growth and indications of improving demand.
India’s largest home decor company is in the spotlight today after the announcement of financial results for Q1FY26. Check the article below to know about their performance and future target given by the analyst.
With a market capitalization of Rs. 2,33,742 crore, the shares of Asian Paints Ltd were trading at Rs. 2,437, up by 1.46 percent from its previous closing price of Rs. 2401.50.
Q1FY26 Results
Asian Paints Ltd reported Rs. 8,938.55 crore in revenue for the first quarter of FY26, a slight 0.35 percent decrease over the Rs. 8,969.73 crore for the same period in FY25. However, from Rs. 8,358.91 crore in Q4 FY25, revenue increased by about 6.94 percent sequentially.
The company’s operating profit stood at Rs. 1,625 crore in Q1FY26, increased by 13.16 percent compared to Rs. 1,436 crore in Q4FY25, whereas decreased by 4.07 percent compared to Rs. 1,694 crore in Q1FY25.
The consolidated net profit for the first quarter of FY26 was Rs. 1,117.05 crore, which was 59.34 percent higher than the Rs. 700.83 crore reported in the previous quarter and 5.9 percent lower year over year than the Rs. 1,186.79 crore in Q1 FY25. Profit growth was also reflected in earnings per share (EPS), which increased to approximately Rs. 11.47 in Q1 FY26 from Rs. 7.22 in Q4 FY25
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Management View
According to CEO Amit Syngle, Asian Paints experienced a minor overall increase this quarter, owing to better urban demand, despite monsoon-related slower momentum in June.
While decorative paints increased 3.9 percent in volume but saw a 1.2 percent decline in revenue, the coatings business in India saw a slight 0.2 percent decline in revenue. The Auto and Protective segments drove Industrial Coatings’ 8.8 percent growth.
The increased marketing expenditure resulted in somewhat lower margins. Beautiful Homes Stores performed well, but home décor remained weak. South Asia and the Middle East led the 11.1 percent growth in international business. The business is still optimistic about long-term expansion.
About the company
Asian Paints is the top paint and décor company in India and among the top 8 coatings companies worldwide. Its market capitalization is approximately Rs. 2,24,557 crore, and its consolidated turnover is Rs. 33,797 crore.
With 26 manufacturing facilities spread across 14 countries, it serves more than 60 countries under a variety of brands, including Taubmans, Asian Paints, Apco Coatings, Asian Paints Berger, Asian Paints Causeway, SCIB Paints, and Kadisco Asian Paints. Additionally, the business provides a large selection of home décor items and is growing steadily in India’s home improvement market.
Analyst Outlook
HSBC kept its Asian Paints “Buy” rating, but lowered the target price from Rs. 2,900 to Rs. 2,800. Despite difficulties brought on by the monsoon, Q1 results were largely consistent and showed early indications of demand recovery.
It is anticipated that the early holiday season will help Q2. The rising price of TiO₂ may be offset by the falling cost of other raw materials. EBITDA margins are probably going to stay at about 18 percent.
Jefferies increased the target price for Asian Paints from Rs. 2,830 to Rs. 2,900 while keeping its “Buy” rating. Although the market is still competitive, the improvement in decorative volume growth and the optimistic demand outlook are the main advantages.
The effect of increased anti-dumping duties on TiO₂ may be partially mitigated by declining input costs. Despite the potential short-term impact on margins, Jefferies views Asian Paints as a solid contrarian investment with anticipated volume growth in the future. Goldman Sachs and Citi maintained Sell ratings with small target hikes; Morgan Stanley and others also gave Sell calls with lower targets.
Written By Akshay Sanghavi
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