Going ahead, brokerages expect growth to remain strong, given the festival demand. However, the margin trajectory might be volatile given the movement of crude oil prices. The stock has shed about 15 per cent over the last three months and upsides may be limited as brokerages continue to be cautious given heightened competitive intensity as well as margin pressures. At the current price (₹ 2,315), the paint major is trading at about 39 times its FY28 earnings estimates.
The company’s topline growth beat estimates — both at the consolidated level which saw a growth of 17 per cent, as well as the domestic operations that registered a growth of 15 per cent year-on-year (Y-o-Y). In the India decorative business, the company clocked a value growth of 14.5 per cent while volume growth was at 6.4 per cent. The industrial paint segment saw a sharp growth, rising 31 per cent Y-o-Y. Growth at the standalone business was aided by healthy volume demand and price-led mix improvement of 12 per cent.
Asian Paints is cautiously optimistic about demand and margins going ahead. It expects sustained traction across rural and urban markets, which coupled with improving demand in services business of paints, business -to-business, waterproofing and preventive maintenance should sustain growth. The company also expects its vinyl acetate ethylene (VAE) facility to boost new product development, innovations and profitability.
PL Capital expects double-digit earnings growth to sustain over the next two quarters, given strong festival sales and benefits of price hikes; however, volatility in margins can remain high as crude prices and supply chain disruptions continue. Analysts led by Amnish Aggarwal of the brokerage believe that margin accretion from the VAE facility holds key to upgrade in earnings and restoring competitive edge in the long term. The brokerage has a “hold” rating with a reduced target price of ₹2,544.
While revenue growth was robust in the quarter, operating profit margins saw a fall of 200 basis points (bps) to 15.6 per cent. The drop was on account of a 350 bps decline in gross margins, though the same was offset by lower other expenses which were down 120 bps and staff costs that fell 30 bps. The company hiked prices by 7 per cent in Q1 and 5 per cent in Q2, with a further 3.5 per cent hike announced in November 2026 to partly offset raw material inflation and 2-3 per cent cost impact from anti-dumping duty on titanium dioxide.
The company has maintained its operating profit margin guidance of 18-20 per cent for FY27. This would be aided by healthy demand, improved product-mix, pricing actions and ongoing cost efficiency measures. Anand Rathi Research has a “buy” rating (with a lower target price of ₹2,940) and expects operating profit margin to expand 100 bps to 19.8 per cent over FY26-29, aided by backward integration and recent price hikes.
Kotak Research has cut its FY27-29 earnings per share by 3 per cent and lowered its target price to ₹2,400. With Birla Opus’ continued growth momentum and JSW Dulux’s improving traction, the brokerage expects elevated competitive intensity to sustain, restricting Asian Paints normalised unit value growth and revenue growth at mid-to-high single digits over the next couple of years.
 "Brokerages view on Asian Paints: Paint industry behemoth Asian Paints reported a weak set of numbers in the June quarter of financial year 2024-25 (Q1 FY25). The muted performance was on account of the heatwave, elections and an unfavourable product")