Asian Paints Ltd.: Record Margins Amid Volume Momentum | Q3 FY26

Asian Paints delivered a mixed Q3 FY26 performance with standalone net sales growing just 2.9% year-on-year due to a shortened festive season, but showcased impressive operational strength with robust volume growth of 7.9% in decorative business. The company achieved a record-high gross margin of 44.9%, expanding 200 basis points year-on-year through raw material deflation and structural cost efficiencies. EBITDA margin stood strong at 21.4%, up 100 basis points, maintaining the top end of the 18-20% guidance band. Management demonstrated cautious optimism, highlighting three consecutive quarters of strong volume momentum expected to continue at high single-digit to double-digit levels. Industrial and B2B segments outperformed with PPGAP growing 17% and APPPG expanding 16%, both showing strong margin expansion. Rural markets outperformed urban centers, while innovation contributed 16% to revenues. The company launched new premium products and expanded its Beautiful Home network to 74 stores. Management expects demand recovery in one to two quarters despite current consumption headwinds, maintaining confidence in structural growth drivers and competitive differentiation through services and innovation.

Key Highlights

• Record gross margin of 44.9%, up 200 bps YoY; EBITDA margin at 21.4%
• Decorative volume growth of 7.9% despite value growth of only 2.8%
• Industrial segments stellar: PPGAP +17%, APPPG +16% with margin expansion
• Innovation contributes 16% to revenue; rural outperforms urban markets
• Margin guidance maintained at 18-20% band; demand recovery expected in 1-2 quarters