Save the best for last—this sits well with Asian Paints’ March quarter (Q4FY26) results, which were announced after all its peers. The decorative paints giant regained the gloss on its earnings, which had borne the brunt of stiff competition, pricing wars and weak demand. In Q4FY26, Asian’s domestic decorative paint volume reached a 12-quarter high of 12.4%. Growth was in double digits in each month of the quarter across rural and urban markets. Increased dealer stocking ahead of price hikes also boosted volumes. Thus, it exited FY26 with an impressive 9% growth in decorative paints volume.
Robust volumes and favourable product mix (better traction in premium-luxury paints) meant 10.6% year-on-year consolidated revenue growth to ₹9,247 crore. This is the first instance of double-digit growth in 12 quarters, Systematix Shares and Stocks (India) said. Premiumization helped narrow the volume-value gap. Cost efficiency and availability of low-cost inventory pushed gross margin to a multi-quarter high of 44.8% in Q4FY26. Ebitda margin expanded 214 basis points year-on-year to 19.3%.
The Q4FY26 demand trends have sustained over April-May across markets. Plus, a longer Diwali season (in Q2/Q3FY26) versus last year and forecasts of a shorter monsoon bode well for paint demand. Given this, Asian Paints eyes 8-10% volume growth in FY27. These comments should boost investors' confidence in paint companies' prospects for a revival this year. But cost inflation may hinder margin expansion. Asian Paints’ raw material basket saw around 20% inflation; it has taken 11% price hikes in April-May. It does not intend to pass on the entire burden to consumers to avoid hurting demand in the current macroeconomic backdrop, but it is open to more calibrated price increases. “Our checks indicate it has just intimated a fresh 2-4% hike to dealers,” said the Systematix report on Friday.
Asian aims to reap margin benefits from backward integration gradually. However, it has cautioned about increased inflationary pressures in Q1/Q2FY27 as lower-cost inventory exhausts. Competition is another swing factor. The entry of new companies with deep pockets has altered the sector's earlier oligopolistic structure. Incumbents’ fight to protect their market share weighed on the industry’s pricing discipline, but that may be slowly coming back. Berger Paints India, Birla Opus and JSW Paints also raised prices in the last two months. While industry-wide pricing has increased, Asian Paints expects competitive intensity to remain high through FY27, with discount-led competition being a key focus area rather than just pricing.
“Although near-term demand outlook remains positive, the heightened competitive scenario has not changed as players like Birla Opus, JSW Akzo and JK Cement continue to make inroads into decorative paints,” said PL Capital. It expects double-digit profit growth for Asian Paints in H1FY27 but warns that the firm's margins have peaked and are likely to trend lower sequentially. This may restrict a stock re-rating. Asian Paints maintains FY27 Ebitda margin guidance at 18-20%.
Meanwhile, some brokerages have upgraded the company’s FY27/FY28 earnings estimates following strong Q4FY26 results. But the sector’s price-demand elasticity will be tested in the coming quarters. The worst of the pressure on competition is behind, but uncertainty over margins persists, according to Jefferies India. So far in 2026, Asian Paints shares are down 3%, a lower decline than Berger and the Nifty 50 index. Asian Paints trades at a rich FY27 price-to-earnings multiple of 53, according to Bloomberg data, making FY27 revival crucial to justify the valuation.