India’s Asian Paints posts surprise quarterly profit drop, shares slump

Jan 27 (Reuters) – Asian Paints (ASPN.NS), opens new tab, India’s largest paintmaker by market share, reported a surprise profit drop on Tuesday, as a one-time charge tied to the country’s new labor laws outweighed strong volume growth in its mainstay ornamental paint segment.
The Mumbai-based company posted a consolidated net profit of 10.60 billion rupees ($115.61 million) in the three-month period finished December 31.

Asian Paints Q3 results:

The country’s largest paint maker, Asian Paints, reported its earnings for the third quarter of the 2025-26 fiscal year (Q3FY26) on Tuesday, January 27, posting a 4.56% year-on-year (YoY) decline in its consolidated net profit to ₹1,059.87 crore.

In the corresponding period of the previous fiscal year, it had clocked a profit of ₹1,110.48 crore, it said in a regulatory filing.

The company’s bottom line was affected by one-time exceptional items of ₹157.61 crore, comprising the impact of the implementation of labor codes and impairment loss recognized on the acquisition of Obgenix Software Private Limited.

The company had a one-time expenditure of ₹63.74 crore towards an increase in gratuity liability by ₹52.88 crore and an increase in liability towards compensated absences by ₹10.86 crore, on the labor codes front.

Moreover, it faced an impairment loss of ₹93.87 crore on ‘intangibles’, recognized on the acquisition of Obgenix Software Private Ltd (White Teak).

Its net profit before minority interest and extraordinary items increased 7.7% YoY to ₹1,215.7 crore, the company stated.

Its revenue from operations, however, grew by 3.71% annually to ₹8,867.02 crore for the reporting quarter, compared to ₹8,549.44 crore in the December quarter of the 2024-25 fiscal year (Q3FY25).

Segment highlights

In the international business segment, Asian Paints posted a 6.3% YoY surge in its net sales to ₹869.6 crore in the December quarter of FY26, compared to ₹818 crore in the year-ago period, led by units in Sri Lanka, UAE and Ethiopia. In constant currency terms, its net sales advanced by 4.2%

Under the home décor business segment, the bath accessories business witnessed a 4.1% annual decline in its net sales to ₹84 crore during the quarter under review, as against ₹87.6 crore in Q3FY25. Additionally, the kitchen vertical’s net sales stood at ₹105.4 crore, reflecting a 2.6% YoY jump from ₹102.8 crore. The white teak vertical saw a 12.4% annual surge to ₹29.2 crore, and its weatherseal segment clocked a net sales of ₹18.7 crore, reflecting a 58.6% annual rise.

In the industrial business segment, Asian Paints PPG Pvt. Ltd. (APPPG) logged a net sales of ₹334.7 crore for the December FY26 quarter, marking a 16.5% YoY rise from ₹287.3 crore in the year-ago interval. Furthermore, PPG Asian Paints Pvt. Ltd. (PPGAP) saw a 16.9% annual growth in its net sales at ₹713.3 crore, compared to ₹610.1 crore.

What the CEO said

Commenting on the results, Amit Syngle, Managing Director & CEO of Asian Paints, said: “We had a third consecutive quarter of good volume growth with our India Decorative Business delivering a robust 7.9% volume growth in the quarter. The overall coatings business registered a 4.4% revenue growth for the quarter, with Decorative business revenue growth of 2.8%. This performance for the quarter reflects the sustained momentum delivered through persistent actions across our identified growth initiatives, even as the broader market faced persistent competitive intensity and subdued demand conditions.”

Syngle stated that the company intensified its brand-building efforts, launched a robust wave of retailing initiatives, and introduced a wide range of innovative product and service propositions, adding that its “disciplined” cost management, backward integration efforts, and enhanced operational efficiencies enabled it to fuel these brand investments while simultaneously improving its operating margins.

He said that the paint makers’ industrial coatings segment registered “good” double-digit growth, boosting its overall coatings performance. In the same league, its international business achieved a 6.3% revenue growth, led by steady performance in key markets of the UAE, Sri Lanka, and Ethiopia.

“As the external environment remains dynamic, we continue to drive differentiated strategies, harness our structural strengths, and embrace technology to sustain momentum, respond with agility, creating long‑term value for all stakeholders,” added Syngle.

Asian Paints stock performance

Shares of Asian Paints fell as much as 5.83% to an intraday low of ₹2,546 apiece on the National Stock Exchange (NSE), after declaring its results.

The stock closed 2.80% lower at ₹2,628 per equity share on Tuesday.

Asian Paints has a total market capitalization of ₹2.52 lakh crore, as of January 27, 2025, as per data on the NSE.

Shares of Asian Paints Ltd., India’s largest paints company, fell as much as 5% on Tuesday, January 27, after the company’s domestic ornamental volume growth fell short of analyst expectations.

During the September quarter, Asian Paints had reported a 10.2% volume growth compared to last year’s quarter, which was the highest in the last seven quarters.

The management wrote in its post-earnings statement that while demand continued to remain subdued, a series of internal initiatives helped deliver resilient growth during the quarter.

For the December quarter, Asian Paints reported a 4.8% decline in its consolidate net profit to ₹1,074 crore from ₹1,128 crore last year. A CNBC-TV18 poll had projected the figure to be ₹1,219 crore.

Revenue for the quarter stood at ₹8,867 crore, a growth of 3.7% from last year, and marginally lower than the ₹9,067 crore projection from the CNBC-TV18 survey.

Earnings Before Interest, Tax, Depreciation and Amortization grew by 8.8% year-on-year to ₹1,781 crore, in-line with the CNBC-TV18 survey estimate of ₹1,750 crore.

Margins expanded by 100 basis points to 20.1% and were 60 basis points above the CNBC-TV18 poll projection of 19.5%.

There was a one-time extraordinary loss of ₹158 crore during the quarter, when dented the company’s bottomline. The group recognized a one-time expense of ₹63.74 crore towards an increase in gratuity liability.

Shares of Asian Paints are now trading 4.8% lower after the earnings announcement at Rs.
First Published: Jan 27, 2026 10:46 AM IST

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