Q1 FY26 Paint Stocks Report: Asian Paints, Berger & Kansai Nerolac
Paint Industry Overview
Indian paint industry is one of the most vibrant and fast-growing industries in the stock market of the country, which is highly relevant to investors who want exposure to India's growth story in infrastructure and consumers. With a value of around Rs.1,00,000 crores currently, the industry is undergoing a record-level of change amidst shifting market dynamics, new industry entrants, and shifts in consumer behavior.
The Indian paint industry has become an important part of India's manufacturing landscape, with the market size being USD 8.71 billion in 2024 and expected to reach USD 14.27 billion by 2030, exhibiting a strong CAGR of 8.42%. The industry functions through two main segments: decorative paints, which hold 75% of the market share, and industrial paints for automotive, machinery, and electronics applications.
Recent Performance
The industry gained from GST reforms in 2025, as paint stocks surged after the government lowered GST rates from 28% to 18% on prominent construction materials. The reform promises to deliver substantial cost benefit and stimulate demand in decorative and industrial segments.
Challenges
The Indian paint industry is faced with a number of structural issues that are redefining competitive dynamics. Volatility of raw material prices is a major concern, given that they represent 50-60% of total sales. Titanium dioxide, which contributes 55-60% of overall raw material costs, and crude oil derivatives present major margin pressures when prices shift.
Excessive rivalry from new players has radically changed the competitive environment. Veteran players have unprecedented pressure from deep-pocketed rivals such as Birla Opus and JSW Paints, compelling higher expenditure on promotional and advertising efforts by 100-200 basis points of revenue. This competitive pressure has squeezed average operating margins from 18% during FY20-FY24 to 16% in H1FY25, with further decline to 14% by FY26 expected.
Price elasticity of Indian consumers creates yet another complication, with firms needing to balance quality propositions with pricing competitiveness. The premature arrival of monsoon in 2025 also distorted demand trends, mainly impacting May and June sales in key markets.
Investment Potential
In spite of the ongoing challenges, the paint sector presents strong long-term investment prospects based on structural drivers of growth. India's per capita paint consumption of 4.5 kilograms is still much lower than developed nations and thus has huge opportunities for growth. The sector anticipates 70% capacity enhancement in three to four years, with around 1 billion liters per annum of fresh capacity having already been added in FY25.
Urbanization trends support sustained demand growth, with India's urban population projected to reach 600 million by 2031. The decorative paints segment continues to demonstrate resilience, benefiting from rising disposable incomes, home renovation trends, and DIY culture adoption post-COVID.
The share of the organized sector will rise from 75% to almost 80% in the medium term, on the back of the strength of branding, scale benefits, and better distribution networks. Players with strong distribution bases, such as Asian Paints' 75,000 tinting machines in India, have huge competitive moats.
Government Initiatives
Support of government policy is a good background for industry expansion. The Make in India and Housing for All initiatives are still driving decorative paint demand via reasonably priced housing developments. Urban development and Smart Cities initiatives are generating further demand for decorative and protective coatings.
The new GST rationalization is the most substantial policy stimulus, with the drop from 28% to 18% for paints anticipated to cut consumer expenses and increase discretionary spending. This change, as well as analogous reductions on cement and building materials, is anticipated to decrease home-building costs by 2-5% for most consumers.
Bharatmala and Sagarmala infrastructure development programs further enhance protective coatings demand, and green-building certifications drive up premium low-VOC emulsions into project specifications.
Future Outlook
The future outlook for the paint industry is positive even in the face of near-term challenges. The market projections show growth to USD 16.38 billion by 2030 at a growth rate of 9.38% CAGR, driven by several structural drivers such as ongoing urbanization, infrastructure growth, and premiumization trends.
Sustainability measures are transforming product formulation, with a greater emphasis on green and low-VOC products. Waterborne paints are increasingly gaining popularity, as firms heavily invest in environmentally friendly substitutes to comply with regulatory measures as well as consumer choice.
Technological innovation with nanotechnology is allowing multifunctional paints with features such as self-cleaning, anti-bacterial, and UV-resistant properties, providing high-end positioning opportunities. The convergence of digital technologies and the penetration of e-commerce is widening market access, especially rural market access through smaller pack sizes.
The competitive landscape would stabilize since new entrants take 3-4 years to catch up with distribution levels of established players. Pre-Diwali timing and better urban demand recovery offer hope for H2 FY26 performance.
For investors, the paint sector is a compelling long-term growth story underpinned by India's infrastructure growth path, increasing consumer aspirations, and pro-growth government policies, notwithstanding short-term margin headwinds from competitive dynamics.
Painting Stocks Overview
Asian Paints Ltd
Asian Paints, established in 1942 with headquarters in Mumbai, is India's largest paint producer holding a 52% local market share and operations across 17 nations. It operates in decorative coatings, industrial painting, and home décor solutions of all kinds, posting consolidated sales of Rs.30,850 crores in FY24. Its leadership in the paint industry is supported by continuous innovation and strategic alliances.
Berger Paints India Ltd
Berger Paints started in 1923 and, since it fell under the Dhingra family in 1991, has developed into India's second-largest paint firm. It holds a 20% market share in decorative paints and dominates the protective coatings business. In FY23, top line came in at Rs.10,639 crores, up 16.2% year on year. Berger is still investing in capacity increases and green product developments.
Kansai Nerolac Paints Ltd
Kansai Nerolac, founded in 1920 and a subsidiary of Japan's Kansai Paint Co., leads India's industrial coatings industry with more than 40% market share. It holds the third position among decorative paints with about 15% market share. Recent additions are a new plant in Andhra Pradesh, which increases production capacity.
Q1 FY26 Key Metrics Comparison: Asian Paints Ltd, Berger Paints India Ltd And Kansai Nerolac Paints Ltd
Find out the top Q1 FY26 performance numbers of India's top paint stocks.
| Stock | Asian Paints | Berger Paints | Kansai Nerolac |
| Revenue Rs. Cr. | 7,868.45 | 2,862.62 | 2,087.42 |
| Revenue Growth YoY | -1.34% | 2.01% | 1.81% |
| Net Profit Change YoY | -7.62 | -3.62 | -4.12 |
| Sales Qtr. Rs.Cr. | 8938.55 | 3200.76 | 2162.03 |
| PAT Qtr. Rs.Cr. | 1099.77 | 342.02 | 220.91 |
| Other Inc Qtr. Rs.Cr. | 229.11 | 2.82 | 52.61 |
| OP Qtr. Rs.Cr. | 1624.97 | 528.41 | 303.15 |
| EBIDT Qtr. Rs.Cr. | 1854.08 | 568.04 | 355.76 |
| OPM % | 17.53 | 15.98 | 11.66 |
| Change in Prom Hold % | 0.01 | 0 | 0 |
| Profit growth % | -24.21 | 0.16 | -5.81 |
| EPS 12M Rs. | 37.5 | 9.79 | 14.02 |
| Dep Qtr. Rs.Cr. | 300.87 | 93.98 | 52.94 |
| GPM Qtr. % | 42.69 | 41.43 | 36.08 |
| Qtr. P/E | 54.11 | 45.3 | 23.04 |
Q1 FY26 Performance Review
Asian Paints
Asian Paints had revenue of Rs.7,868.45 crore in Q1 FY26, down 1.34% y-o-y even as volumes grew by 3.9%. Other income was at Rs.229.11 crore and operating profit stood at Rs.1,624.97 crore, which represents a margin of 17.53%. EBITDA was at Rs.1,854.08 crore, while net profit fell 7.62% to Rs.1,099.77 crore. With depreciation at Rs.300.87 crore and gross margin of 42.69%, the company continues to spend on capacity augmentation and R&D. The EPS of the quarter was Rs.37.50, suggesting a P/E of 54.11.
Berger Paints
Berger Paints posted Q1 revenues of Rs.2,862.62 crore, up 2.01% year on year, on the back of sustained growth in its decorative as well as protective coatings portfolio. Other income remained negligible at Rs.2.82 crore, and operating profit was at Rs.528.41 crore, with a 15.98% margin. EBITDA was Rs.568.04 crore, with depreciation of Rs.93.98 crore. Net profit declined 3.62% to Rs.342.02 crore, backed by a healthy gross margin of 41.43%. The trailing EPS was Rs.9.79, against a P/E multiple of 45.30.
Kansai Nerolac
Kansai Nerolac announced Q1 revenue of Rs.2,087.42 crore, up 1.81% year-on-year, driven by robust industrial and waterproofing sales. Other income added Rs.52.61 crore, and operating profit was Rs.303.15 crore, which gave an 11.66% margin. EBITDA was Rs.355.76 crore, while depreciation charges were Rs.52.94 crore. Net profit fell 4.12% to Rs.220.91 crore, with a 36.08% gross margin. Trailing EPS of the company stood at Rs.14.02, giving a P/E of 23.04.
Comparative Insights
Asian Paints is the biggest in terms of size but suffered marginal revenue and profit downtrends as a result of competitive pricing and premature onset of monsoons. Berger Paints recorded highest revenue expansion but reported a minor decline in net profit, balancing its decorative and protective divisions nicely. Kansai Nerolac reported top-line expansion consistently but registered the lowest operating margin, which was compensated by healthy other income. In terms of valuation, Kansai Nerolac is the most competitively priced with a P/E of 23.04 against Berger's 45.30 and Asian Paints' 54.11.
Final Thoughts
Asian Paints, Berger Paints, and Kansai Nerolac have all shown resilience in Q1 FY26 against monsoon headwinds and competitive pricing pressures. Enrich Money encapsulates this tenacious future outlook and growth potential in the segment.
Frequently Asked Questions
What propelled volume expansion at Asian Paints during Q1 FY26?
A 3.9% growth in decorative and industrial paint volume wiped out price concessions.
Why fell Berger Paints' net profit though its revenue increased?
Increased promotional expense and depreciation took a toll on profitability.
How did Kansai Nerolac succeed to increase revenue while facing weak decorative demand?
Good traction in industrial, waterproofing, and protective coatings underpinned sales.
Which paint stock has the most appealing valuation?
Kansai Nerolac, with a P/E for Q1 FY26 of 23.04, has the lowest multiple.
What was the effect of GST reforms on the paint industry in early FY26?
The reduction from 28% to 18% triggered demand and cost savings across segments.
Disclaimer: This blog is dedicated exclusively for educational purposes. Please note that the securities and investments mentioned here are provided for informative purposes only and should not be construed as recommendations. Kindly ensure thorough research prior to making any investment decisions. Participation in the securities market carries inherent risks, and it's important to carefully review all associated documents before committing to investments. Please be aware that the attainment of investment objectives is not guaranteed. It's important to note that the past performance of securities and instruments does not reliably predict future performance.
