Asian Paints flags West Asia war as demand risk despite strong FY26 earnings

Asian Paints Ltd joined rivals to mark the West Asia war as short-term uncertainty on demand, even as the country’s largest paint maker reported revenue from operations ahead of Street forecasts.

“The external environment remains volatile, with conflict in West Asia contributing to demand uncertainty in the short term,” Amit Syngle, managing director and chief executive officer of Asian Paints, said in a statement released by the company.

During a post-earnings call with analysts on Friday, Syngle said the company had a price increase of around 10.5-11.0%.

While input cost pressures remain high, the company said it is not putting the entire burden on customers. “The overall impact is much higher, maybe closer to about 20%. We’ve passed on about 11%… and we don’t plan to pass on the full impact so we can maintain the balance between inflation in the market and what we can absorb,” Syngle added.

While Berger Paints warned that the Gulf conflict could increase inflation and lead to some softening of demand, Kansai Nerolac adopted a wait-and-watch stance and said that the visibility of demand remained uncertain in an inflationary environment.

Paint manufacturer’s revenue from operations increased by 5% ₹35,583.54 crore compared to Rs.35,583.54 crore in FY2026 ₹33,905.62 crore in FY25, according to the company’s stock exchange filings. Net income beat expectations of 35 analysts surveyed Bloombergrevenue forecaster ₹35,195.65 crore.

In FY26, the company’s profit attributable to owners increased by 18% ₹Compared to 4,325.35 crore ₹3,667.23 crore in FY25, according to the company’s stock exchange filings.

fierce competition

On the competitive front, Asian Paints expects the intensity to remain high. “The intensity of competition in the market will be strong… We have newer competition and our existing players are equally intense. We think this intensity will continue in the coming year,” he said, adding that discount pressures continue despite price increases.

Earnings before interest, taxes, depreciation and amortization (EBITDA) ₹6,695.92 crore in FY26 ₹6,006.21 crore in FY25.

The company said it will rely on a mix of calibrated pricing, cost efficiency and premiumization to sustain margins going forward. “We will continue to take calibrated price increases… we will also work strongly on cost efficiencies so we can maintain our overall margin guidance,” Syngle said.

Despite this, management acknowledged that the working environment remains challenging. “It won’t be easy… but the effort is to stay within the margin band through a combination of pricing, mix improvement and cost efficiency,” he added.

According to analysts, the company’s volume growth in FY26 was 8.7% and value growth was 4.3%, largely due to unfavorable product mix and discounts.

“Asian Paints reported strong profit growth in FY26, largely driven by cost efficiency measures, and management sees FY27 as a potential turning point as recent price increases begin to flow. While the company expects revenue growth to pick up, supported by these price increases, the gap between volume and value growth is likely to narrow in the future,” said Amit Purohit, senior vice president at Elara Securities.

Despite the decline in earnings, Purohit stated that the demand picture remained uncertain, suppressed by geopolitical risks arising from the West Asian war. Price competition shows no signs of easing, with players continuing to discount heavily in an already uncertain market.

The Mumbai-based paint manufacturer reported an 11% year-on-year increase in revenue from operations. ₹9,246.70 crore in 4QFY26, while net profit increased by 69% ₹1,172.12 crore ₹692.13 crore a year ago.

Shares of Asian Paints closed with a loss of 0.6 percent ₹Nifty 50 closed Friday with a 1.5% loss, reaching 2,688.