Asian Paints Ltd.Q2 volume +6.4%, margin squeezed, VAE plant starts

Asian Paints' Q2 FY27 call, held on 29 October 2026, reported decorative volume growth of 6.4% and value growth of 14.5%, taking H1 volume to about 8% and value to about 16%.

Standalone net sales rose 14.8%, but gross margin slipped from the 44% to 45% range as raw material inflation outran price rises of 7% in Q1 and about 5% in Q2, so the PBDIT margin fell to 17.1% from 18.5%. Standalone PAT rose about 15%. Consolidated net sales grew about 17% with a 15.6% PBDIT margin, and H1 consolidated PAT rose about 24%. The industrial joint ventures grew 34% and 28% and international sales about 30%, but margins slipped as price rises lagged.

The VAE plant started in September; management expects a 300 to 500 basis point gross margin benefit on relevant products and full use of Phase 1 capacity next year. A further 3.5% price rise was announced for November to cover the new anti-dumping duty on TiO2. Management kept the 18% to 20% PBDIT band for the year, expects 41% to 43% gross margin and volume growth of 8% to 9%, and declared an interim dividend of ₹5.75.