Shalimar Paints FY26: 124 Years Old, Still Bleeding — But the Tourniquet Is Finally On

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1 — At a Glance

Shalimar Paints has been protecting things since 1902 — the Howrah Bridge, the Rashtrapati Bhavan, the Chenab rail bridge. In FY26, the thing most in need of protection was its own income statement.

Figures are consolidated, in ₹ crore.

Revenue fell from ₹599 Cr in FY25 to ₹576 Cr in FY26, a 3.8% contraction. PAT narrowed from a loss of ₹80 Cr to a loss of ₹65 Cr — smaller damage, but damage nonetheless. The operating loss compressed from -₹57 Cr to -₹22 Cr, and the final quarter of FY26 delivered a positive operating profit of ₹2 Cr — the first time the company managed that feat under its current promoter, Hella Infra Market, per the company’s own performance highlights. That single quarter is the attention signal. The worry signal is everything around it: accumulated losses of ₹530 Cr as at March 2026, working capital limits running at ~93% utilisation per CARE, and a CFO who resigned the day FY26 results were approved.

ROCE stands at -7.92% and ROE at -21.3%. The market cap is ₹434 Cr — a ₹434 Cr bet on whether a 124-year-old brand can finally stop haemorrhaging faster than its promoter can infuse capital. The answer, in FY26, was: not yet, but less haemorrhage than before.

A balance sheet carrying ₹165 Cr of borrowings alongside ₹530 Cr of accumulated losses is not a company in distress — it is a company in a very well-supervised distress.

2 — Introduction

Shalimar Paints was incorporated in 1902, making it one of India’s oldest paint companies by some distance. For much of its history it was associated with the Ratan Jindal faction of the O.P. Jindal Group and Mr. Girish Jhunjhunwala. That ownership chapter closed in early 2024 when Hella Infra Market Limited completed an open offer and became the controlling promoter with a 52.85% stake, effective March 11, 2024.

Hella operates in construction materials — ready-mix concrete, aggregates, paints, steel, cement — and its acquisition of Shalimar brought a paint brand with a manufacturing footprint, a 7,300+ retailer distribution network, and accumulated losses that would make a chartered accountant weep quietly into their coffee.

The Hella era has been marked by capital infusion (approximately ₹345 Cr at initial investment in February 2022, comprising ₹290 Cr equity and ₹55 Cr OCDs, per CARE) and structural reform. The OCDs were repaid in FY24. An additional ₹150 Cr was raised through share warrants in 2023 — ₹75 Cr from Hella, ₹40 Cr from Virtuous Tradecorp, and ₹35 Cr from JSL Limited.

In April 2025, Mr. Kuldip Raina was appointed Managing Director and CEO. He had previously served as CEO of Nerofix Private Limited, a Kansai Nerolac group company, per CARE. The management pivot toward profitability is documented: the company, management stated in its performance highlights, executed cost rationalisation covering employee costs and manufacturing expenses, and continued portfolio premiumisation toward higher-margin emulsion products.

The FY26 year also involved a subsidiary-level transaction: IM Inicio Projects Private Limited, Shalimar’s wholly-owned subsidiary, acquired the painting services business from Hella Infra Market on a going concern basis for ₹0.26 Cr, with the subsidiary assuming net liabilities of ₹0.20 Cr, bringing the total impact to ₹0.46 Cr adjusted to reserves, per the company’s consolidated notes.

3 — Business Model: WTF Do They Even Do?

Shalimar Paints manufactures and sells paints across two segments: decorative and industrial. In FY25, decorative accounted for ~63% of revenue and industrial ~37%, with the decorative mix shifting meaningfully toward emulsions (~35% of decorative sales).

The decorative portfolio spans interior and exterior emulsions, waterproofing solutions, wood coatings, and primers. Key brand names within decorative include Signature (interior luxury emulsions), Hero (super-premium interior and exterior emulsions), Xtra Tough (super-premium exterior), and Superlac and Master Emulsion for the more earthbound end of the range. A newer affordable range trades under the “Mela” brand; waterproofing has been consolidated under “Zero Damp.” Ten new products were launched in FY25 across these umbrellas.

Industrial is the coat that gets no poetry. It covers protective coatings, marine coatings, pipeline coatings, can coatings, and anti-corrosion finishes used by institutional clients including Jindal Saw, Jindal Steel & Power, JSW Steel, and Nayara Energy, per CARE. Industrial sales go directly to OEMs rather than through retail. This is a structurally different selling motion from decorative — specification-driven, relationship-dependent, margin-sensitive to raw material costs.

Manufacturing runs out of three plants: Nashik (Maharashtra), Sikandrabad (Uttar Pradesh), and Gummidipudi near Chennai (Tamil Nadu). A new R&D centre in Nashik became fully operational during FY25. Both the Chennai and Nashik plants are currently underutilised, per CARE.

The distribution architecture is 48 depots and 7,300+ retail touchpoints, with a shift toward a distributor-led model in Tier 2 and Tier 3 markets. Geography is overwhelmingly domestic — 98% of FY25 revenue — with the remaining 2% spread across Nepal, UAE, Bhutan, and Seychelles. In volume terms, output ran at 50,067 KL in FY25, up from 24,327 KL in FY24 — a near-doubling that coincides with the Hella-led distribution expansion. In 9MFY26, new products contributed to 5% incremental business, per the company’s disclosures.

The brand is old enough to have painted the Howrah Bridge. Whether that heritage translates into premium pricing power against a market that now includes Birla Opus and JSW Group’s entry is the tension the model lives inside.

The model is essentially: very old brand, three somewhat underutilised factories, a distribution network being rebuilt from scratch, and a promoter willing to keep signing cheques while the P&L finds its level.

Does ₹434 Cr of market cap represent the brand’s floor, or is the market pricing in the trajectory rather than the current financials?

4 — Financials Overview

Figures are consolidated, in ₹ crore.

Annual Results (Yearly)

EPS: consolidated PAT of -₹64.95 Cr ÷ 8.37 Cr shares (₹16.74 Cr equity capital ÷ ₹2 face value) = -₹7.76. Full FY EPS used — no annualisation applied.

Revenue declined, management attributed the moderation to a strategic decision to reduce focus on low-margin products such as thinners and low-value customers, per CARE. Operating losses compressed from -₹57 Cr to -₹22 Cr, management attributed the improvement to cost rationalisation in employee costs and operating expenses, per the company’s performance highlights. The tax line was effectively zero across both years; accumulated losses have produced no deferred tax recognition.

Notable: Q4 FY26 (Jan–Mar 2026 consolidated) posted an operating profit of ₹2.08 Cr — the first positive operating quarter since Hella acquired its controlling stake, management stated. Q4 PAT was -₹7.39 Cr (net of interest and depreciation).

No concall transcripts are available in the data for FY26.

5 — Market Expectations & Historical Multiples

This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.

No P/E is calculable — the company has reported losses in each of the last several years and the EPS is negative. The market pays 1.73x book value on a company whose book is itself shrinking through accumulated losses (net worth compressed from ₹393 Cr in FY24 to ₹315 Cr in FY25 to ₹251 Cr