India's Asian Paints posts surprise quarterly profit drop, shares slump (updated)

Berger Paints India

27/01/2026 09:21

Updates with details and background

Jan 27 (Reuters) - Asian Paints ASPN.NS, India's largest paintmaker by market share, reported a surprise profit drop on Tuesday, as a one-time charge tied to the country's new labour laws outweighed strong volume growth in its mainstay decorative paint segment.

The Mumbai-based company posted a consolidated net profit of 10.60 billion rupees ($115.61 million) in the three-month period ended December 31.

Analysts, on average, had expected a profit of 12 billion rupees, according to LSEG-compiled data. The company's profit came in at 11.10 billion rupees in the year-ago period.

Shares of the paintmaker extended losses after the results, last trading 3% lower.

The company took a one-time charge worth 1.58 billion rupees, which included exceptional expenses tied to India's new labour laws and certain impairment losses.

Domestic sales volumes of decorative paints grew 7.9% in the reported quarter, in line with a 5%-11% growth range modelled by analysts from at least six brokerages.

The company earns nearly 90% of its revenue from domestic sales of decorative paints, primarily used by retail consumers for household painting.

Despite challenges like an extended monsoon season during the reported quarter, analysts expected Asian Paints to outperform smaller rivals such as Berger Paints BRGR.NS and Kansai Nerolac KANE.NS.

This optimism was supported by a low base of 1.6% volume growth in the quarter ended December 2024 and expectations that subdued inflation and consumer tax cuts will boost retail discretionary spending.

The paintmaker, however, last year faced its weakest demand in decades, as consumers opted for cheaper brands amid the rising cost-of-living crisis. Competition intensified when new entrant Birla Opus ramped up production and offered discounts, sparking price wars.

The company's revenue from operations rose 3.7% to 88.67 billion rupees in the reported quarter, below analysts' average expectation of 90.46 billion rupees.

In the quarter ended December 2024, revenue had fallen 6% year-on-year.

($1 = 91.6837 Indian rupees)

 (Reporting by Hritam Mukherjee in Bengaluru; Editing by Sherry Jacob-Phillips and Janane Venkatraman)

 ((Hritam.Mukherjee@thomsonreuters.com; X: @MukherjeeHritam;))