Asian Paints delivered exceptional financial results for Q1FY27, with consolidated net profit surging 39.6% year-on-year to ₹1,559.45 crore compared to ₹1,117 crore in the corresponding period last year. According to the latest earnings report, revenue from operations increased 18% YoY to ₹10,541.94 crore from ₹8,938.55 crore a year ago. The company's total income rose 18.08% to ₹10,782.79 crore, while total expenses climbed 14% to ₹8,725.20 crore during the quarter. Despite facing around 25% raw material inflation, the company managed to deliver strong operational performance with EBITDA margin at 20.6%, exceeding the company's guidance range of 18-20%.
Multiple brokerages have raised their target prices on Asian Paints following the strong Q1FY27 results. Nomura maintained its 'Buy' rating and raised its target price to ₹3,750 from ₹3,600, implying an upside of around 39.6% from the current market price of ₹2,686.50. Jefferies maintained its 'Buy' rating and increased its target price to ₹3,350 from ₹3,300, indicating an upside of about 24.7%. Macquarie retained its 'Outperform' rating and raised its target price to ₹3,300 from ₹3,200, suggesting an upside of around 22.8%. JP Morgan maintained its 'Overweight' rating and raised its target price to ₹2,970 from ₹2,920, implying an upside of about 10.6%. However, Motilal Oswal retained its 'Neutral' rating with a target price of ₹3,050, implying an upside of around 13.5%.
Domestic decorative volumes increased 9% YoY, which was slightly below the estimated 12% growth, but the company delivered a blowout quarter with 18% sales growth, ahead of estimates of around 12.5%. According to Nomura's analysis, this growth was partly impacted by channel up-stocking ahead of price hikes in Q4. Management indicated that demand was healthy during the quarter and there was no meaningful inventory build-up, suggesting strong underlying market conditions. The company expects demand to remain healthy in Q2, supported by the festive season. As reported by Motilal Oswal, international business delivered strong 27% YoY growth (20% in constant currency terms), highlighting successful expansion beyond domestic markets.
Management has reiterated its FY27 volume growth guidance of 8-10%, indicating confidence in sustained demand momentum despite competitive pressures. As reported by Motilal Oswal, the brokerage models 20.4%/20.6% standalone and 19.1%/19.4% consolidated EBITDA margins for FY27/FY28 respectively. Nomura believes peak competition is behind the company and expects earnings per share (EPS) to grow at a compound annual rate of 14% over FY26-FY29. However, several analysts continue to caution about rising raw material costs and competitive pressures that may limit margin expansion in the near term. The company's strong operational performance and healthy demand outlook support the positive medium-term outlook, though views remain divided over the sustainability of margins amid input cost inflation and crude oil price volatility.
