Slow demand recovery a major worry for Asian Paints

Asian Paints’ third quarter (Q3FY26) revenue missed consensus with 4 per cent year-on-year (Yo-Y) growth, but gross margins rose due to lower raw material costs.

- DEVANGSHU DATTA

Domestic volumes grew 7.9 per cent Yo-Y with rural growth beating urban. The international segment grew 6 percent Yo-Y (4.2 per cent in constant currency). The operating profit margin was 20.1 percent.

Management guided for mid-single-digit revenue growth and operating profit margin sustained at 18 per cent to 20 percent. While the market responded negatively, investors could look at low raw material inflation, lower competitive intensity, cost-saving initiatives, and premiumisation as positives. Gross margin expanded by 194 basis points due to lower raw material costs, and possible lower competitive intensity. Operating profit grew 8.8 per cent Yo-Y to ₹1,780 crore with a margin expansion of 94 basis points Yo-Y to 20.1 per cent. Recurring net profit grew 9.6 per cent Yo-Y to ₹1,220 crore. In the 9MFY26, net sales, operating profit and adjusted net profit grew 3 per cent, 9 per cent and 6 percent, respectively.