At a Glance
Asian Paints, the undisputed king of home décor, just dropped its Q1 FY26 results, and let’s just say the canvas isn’t as bright this time. Sales came in at ₹8,924 Cr (flat YoY), while PAT dipped 5.9% to ₹1,100 Cr. Decorative paint volumes managed a timid 3.9% growth, but margins got a fresh coat of pressure from higher input costs. The market yawned, but the stock stayed calm at ₹2,402.
1. Introduction
Asian Paints has been the darling of Dalal Street for decades, delivering compounding returns while turning Indian walls from boring cream to fifty shades of wow. But FY26 opened with muted revenue and margin contraction. Blame a sluggish real estate sector, muted rural demand, and raw material cost fluctuations. Despite the dip, the company continues to innovate, expand in waterproofing, and launch lifestyle décor products—because why just paint when you can sell an entire kitchen?
2. Business Model (WTF Do They Even Do?)
- Decorative Paints: Core revenue driver (70%+ share).
- Industrial Coatings: Partnerships with PPG for automotive and industrial paints.
- Home Décor: Modular kitchens, sanitaryware, lighting, furniture—you name it.
- Adhesives & Waterproofing: Gaining traction through brands like SmartCare.
The company thrives on distribution dominance (70,000+ dealers) and brand loyalty, but faces challenges from competition and input volatility.
3. Financials Overview
Q1 FY26 Numbers:
- Revenue: ₹8,924 Cr (-0.2% YoY)
- EBITDA: ₹1,625 Cr (margin 18%)
- PAT: ₹1,100 Cr (-5.9% YoY)
- EPS: ₹11.47
FY25:
- Revenue ₹33,906 Cr | PAT ₹3,710 Cr | EPS ₹38.2
Margins slid, reflecting input cost hikes and higher expenses in home décor expansion.
4. Valuation
Time to crunch some color-coded numbers:
- P/E: EPS ₹37.5 × 55 = ₹2,060
- EV/EBITDA: EBITDA ₹5,937 Cr × 25 = ₹2,400
- DCF: Conservative growth gives ₹2,200 – ₹2,500
Fair Value Range: ₹2,200 – ₹2,500
CMP ₹2,402 is sitting comfortably in the middle—neither bargain nor bubble.
5. What’s Cooking – News, Triggers, Drama
- AP Polymers Amalgamation: Streamlining operations via subsidiary merger.
- Decor Volume Growth: 3.9%—good, but not a Picasso.
- Raw Material Costs: Crude and titanium dioxide prices keep margin on edge.
- New Product Launches: Waterproofing and décor segments expanding aggressively.
6. Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 25,779 | 29,901 | 30,355 |
| Liabilities | 9,787 | 11,172 | 10,955 |
| Net Worth | 15,896 | 18,632 | 19,304 |
| Borrowings | 1,933 | 2,474 | 2,290 |
Remark: Low debt, fat equity—balance sheet is still a masterpiece.
7. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 4,193 | 6,104 | 4,424 |
| Investing | -1,282 | -2,548 | -941 |
| Financing | -2,140 | -2,982 | -3,753 |
Commentary: Cash from ops dipped; capex and dividends keep wallets busy.
8. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 34% | 38% | 21% |
| ROCE | 34% | 38% | 26% |
| P/E | 60x | — | — |
| PAT Margin | 12% | 16% | 11% |
| D/E | 0.10 | 0.13 | 0.11 |
Verdict: Still sexy, but profit margin is losing some sheen.
9. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 34,489 | 35,495 | 33,906 |
| EBITDA | 6,260 | 7,585 | 6,006 |
| PAT | 4,195 | 5,558 | 3,710 |
Commentary: FY24 peak, FY25 correction, Q1FY26 shows stabilization.
10. Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Asian Paints | 33,906 | 3,710 | 60 |
| Berger Paints | 11,545 | 1,168 | 57 |
| Kansai Nerolac | 7,823 | 591 | 33 |
| Akzo Nobel India | 4,091 | 428 | 40 |
Commentary: Asian Paints remains the leader but trades at a premium Picasso price.
11. Miscellaneous – Shareholding, Promoters
- Promoters: 52.6% (rock solid)
- FIIs: 11.8% (falling trend)
- DIIs: 21.0% (increasing)
- Public: 14.4%
DIIs are buying the dip while FIIs are packing their bags.
12. EduInvesting Verdict™
Asian Paints Q1 FY26 is not a disaster, but it’s no mural of glory either. Volume growth is positive, yet revenue and profit dips show the cost squeeze. The company’s dominance, branding, and distribution moat remain unmatched, but high valuation (P/E ~60) means expectations are painted on a massive canvas.
SWOT Snapshot:
- Strengths: Market leader, strong brand, healthy cash flow, innovation.
- Weaknesses: Slowing growth, high valuation.
- Opportunities: Expanding décor offerings, rural recovery, premium product demand.
- Threats: Raw material volatility, competitive aggression, macroeconomic slowdown.
At ₹2,402, the stock is holding steady but needs a splash of margin expansion to justify its premium tag.
Written by EduInvesting Team | 29 July 2025
SEO Tags: Asian Paints, Q1 FY26, Paint Industry Analysis
