New Delhi: Shares of India’s largest paint maker, Asian Paints Ltd, have come under pressure after reporting a subdued performance in the December quarter, with investor sentiment weakening amid signs of slowing demand in the decorative segment.
According to broker-tracked data, the stock has declined roughly 10% on bourses since January 27, as the company’s Q3 results fell short of market expectations and rekindled concerns over demand resilience in key markets.
Soft Decorative Demand Weighs on Volumes
The company’s decorative paint volumes grew at a slower pace of 8% in Q3, down from 11% in the prior quarter, reflecting muted repainting activity and a softer than expected pick-up in consumer spending. Extended monsoon rains and a shorter festive season also contributed to weaker footfalls in retail segments.
Despite top-line pressures, Asian Paints reported EBITDA margin expansion of about 90 basis points year-on-year to ~20.1%, aided by softer raw-material costs. However, value growth remains modest, and pricing power was limited amid competitive intensity.
Guidance and Strategic Focus
The company has maintained its FY26 guidance of ~8–10% volume growth and a ~18–20% EBITDA margin, underpinned by formulation and sourcing efficiencies. Management also signalled expectations of market share gains over the next 12–18 months, driven by segments such as waterproofing and home décor, which have shown stronger traction than core decorative paints.
International business grew modestly, with several overseas markets contributing to incremental revenue, and loss-making operations in Indonesia having been exited from the portfolio.
Brokerage Reaction & Market Sentiment
In response to mixed Q3 metrics, several brokerages have trimmed earnings estimates and cut target prices by up to ~10% for FY26–28, reflecting a more cautious near-term demand outlook. Softer decorative demand and heightened competition are key concerns, even as margins remain resilient.
The consumer discretionary spending shifts — with greater budget allocations towards travel and experiences — have also contributed to lower repainting frequencies in urban pockets.