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Asian Paints’ Middle East sales defy soaring cost

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In short

Asian Paints recorded a 16.9% increase in consolidated net sales to Rs 9,953.9 crore for the second quarter of FY27, bolstered by strong international revenue. However, consolidated net profit missed LSEG estimates as profit-after-tax margins contracted by 94 basis points to 10.7%. In response to persistent crude derivative inflation and servicing difficulties, management has introduced staggered price increases alongside aggressive cost-efficiency programs.

Key points

  • Geopolitical disruptions and elevated crude oil prices have created severe raw material i…: Geopolitical disruptions and elevated crude oil prices have created severe raw material inflation for paint manufacturers.
  • Rising expenses led to a 31% drop in international profit before tax, reducing it to Rs 5…: Rising expenses led to a 31% drop in international profit before tax, reducing it to Rs 52.7 crore.
  • Asian Paints is deploying staggered decorative paint price hikes to alleviate ongoing ind…: Asian Paints is deploying staggered decorative paint price hikes to alleviate ongoing industrywide margin pressures.

Sources checked by our analysis pipeline: 1

Revenue from international operations rose 29.5% year-on-year to Rs 1,095.6 crore in Q2 FY27, while sales grew 23.7% in constant currency terms. Profit before tax in the business declined to Rs 52.7 crore, down 31%.

“The Middle East region also registered robust growth despite servicing challenges posed by the ongoing geopolitical situation,” MD & CEO, Amit Syngle said.

Indian paintmakers have been grappling with elevated raw material costs, with the Middle East conflict keeping crude oil prices high and disrupting supply chains.

Crude derivatives are key inputs for the paint industry, and geopolitical disruptions have also constrained material availability, squeezing margins even as companies raise prices to offset cost pressures.

Asian Paints' consolidated PAT margin for the quarter declined by 94 basis points to 10.7%.

"The operating environment this year has been marked by sharp raw material inflation and material availability constraints driven by geopolitical disruptions, the full impact of which was felt in Q2," Syngle added.

At the consolidated level, Asian Paints reported a 16.9% increase in net sales to Rs 9,953.9 crore in Q2 FY27. Its net profit…

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