Asian Paints Q2 Results: Profit Up 7.5%, Margins Contract

Asian Paints Ltd (NSE: ASIANPAINT) on Monday posted a 7.5% year-on-year rise in consolidated net profit at ₹1,067.63 crore for the second quarter of FY27 versus ₹993.59 crore in the same quarter last year. Revenue from operations rose 16.9% YoY to ₹9,953.89 crore. While sales growth remained healthy, it was offset by rising raw material costs and supply constraints.

Asian Paints Q2FY27 Result: Key Financial Highlights

The country’s largest paint maker reported double-digit revenue growth for the September quarter, driven by its domestic decorative paints, industrial coatings and international businesses.

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Revenues increased by nearly 17%. But profits were only up in the low single digits. Sales growth was much faster than EBITDA growth, meaning a big chunk of the incremental revenue was eaten up by higher input costs.

Consolidated net profit declined by 30.6% sequentially to ₹1,539.25 crore in Q1FY27.

What Caused The Profit Margins Of Asian Paints To Decline?

The rising cost of raw materials was the biggest challenge in the quarter.

Paint is made from pigments, solvents and other chemicals which come from crude oil. Production costs have increased due to higher crude prices and supply chain disruptions across the globe.

Material consumption expenses rose around 35% yoy to ₹5,084 crore. The company’s operating margin based on reported PBDIT measure shrank by about 202 basis points to 15.6%.

Asian Paints has taken staggered price hikes but has absorbed some of the cost inflation to protect consumer demand. That slowed its ability to convert higher revenue into stronger profit growth.

Expansion of Domestic and Foreign Firms

Asian Paints’ domestic decorative paints business grew by 6.4% in volume terms and 14.5% in value terms in Q2FY27.

Industrial coatings were particularly strong, up 31.8% in value. International sales rose 29.5% YoY to Rs 1,095.6 crore due to growth in a few overseas markets.

The company has also commissioned Phase I of its vinyl acetate-ethylene (VAE) manufacturing facility at Dahej to improve raw material integration and cost competitiveness.

Why Asian Paints Share Price Came Under Pressure?

Shares of Asian Paints fell nearly 2 per cent in the day to a low of ₹2,217 on October 29 after the company posted earnings that showed lower profitability on higher revenue. Later, the stock recovered to close at ₹2,302 on the NSE, up 0.76 per cent.

Key concerns remained on narrowing margins, increased competition and sharp increase in input cost. Birla Opus and other paint companies have raised the competitive pressure on prices in the entire industry.

Dividend Declaration and Outlook

Asian Paints announced an interim dividend of Rs 5.75 per share and has fixed November 4, 2026 as the record date.

The company is also introducing more staggered price increases to offset rising input costs. Going forward, crude oil prices, availability of raw material, demand in festive season and pricing competition would impact the profitability.

Q2FY27 gap between sales growth and earnings growth despite strong revenue growth. Asian Paints’ financial performance in the next few quarters will be driven by maintaining volume and improving margins.