Asian Paints recorded a 17% increase in second-quarter revenue to Rs 9,977 crore, while net profit grew 7% to Rs 1,068 crore as rising expenses squeezed operational profitability. CEO Amit Syngle confirmed that standalone EBITDA margins settled at 17.1% after the firm absorbed notable raw material cost pressures. In response, firms including Jefferies and Goldman Sachs lowered their target prices, though opinions remain split between Buy and Sell ratings. To support its full-year EBITDA margin target of 18-20%, the paint manufacturer has scheduled a 3.5% price hike for the third quarter.
Key points
Multiple brokerages cut their price targets because operating profit margins lagged behin…: Multiple brokerages cut their price targets because operating profit margins lagged behind substantial cost inflation.
Management maintained its full-year EBITDA margin target of 18-20% despite current quarte…: Management maintained its full-year EBITDA margin target of 18-20% despite current quarter margin compression to 17.1%.
Upcoming staggered price hikes, including an expected 3.5% increase in the third quarter,…: Upcoming staggered price hikes, including an expected 3.5% increase in the third quarter, aim to restore profitability.
Sources checked by our analysis pipeline: 1
Asian Paints’ revenue from operations increased around 17% YoY to Rs 9,977 crore during the July-September quarter of FY27, while total expenses grew 19%. The company’s CEO Amit Syngle noted that 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.
“We calibrated price increases and absorbed part of the cost inflation to protect consumer demand in this challenging environment, resulting in standalone EBITDA margins of 17.1% in a quarter that typically has a lower mix and margin profile,” Syngle said. With inflationary pressures showing little sign of easing, the executive added that Asian Paints is implementing a further round of staggered price increases in the coatings business, while intensifying its cost-efficiency initiatives.
Also read | Asian Paints Q2 Results: Net profit rises 7% YoY to Rs 1,068 crore; firm announces Rs 5.75/share dividend
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