GST Reforms, Early Monsoon, and Rising Competition Shape Paints Sector Q1 Results

On August 18, 2025, shares of India’s foremost paint manufacturers surged in rallies after Prime Minister Mr. Narendra Modi announced far-reaching GST reforms to buoy investor sentiment despite dismal Q1 earnings. They include Asian Paints, which rose 2.27% to Rs 258610; Berger Paints, which rose 1.5% to Rs 541.80; Kansai Nerolac, which rose 0.82% to Rs 237.37; and Akzo Nobel India, which climbed 0.67% to Rs 3,444 on the NSE.

The June quarter (Q1 FY26) reflected mixed performance across the sector. An early and intense monsoon, coupled with aggressive pricing by new entrants, dented sales momentum. However, urban demand recovery and price-led realisations provided some cushion. Paint makers now pin hopes on pre-Diwali demand in August and September.

Asian Paints, the sector leader, reported a 1.19% dip in standalone revenue to ₹7,848.83 crore. CEO Amit Syngle admitted the monsoon was a “dampener” but highlighted 3.9% volume growth year-on-year. “Urban demand is showing green shoots, though competition remains intense,” he said.

Berger Paints posted an 11% fall in net profit at ₹315 crore, while revenue edged up 3.55% to ₹3,200.76 crore. CEO Abhijit Roy noted the early monsoon pushed back purchases but pointed to mid-single-digit volume growth in the decorative segment.

Kansai Nerolac’s net profit dropped 4.12% to ₹215.6 crore, with revenue up 1.35% at ₹2,162.03 crore. MD Pravin Chaudhari said rural demand remained stable, while urban demand showed signs of recovery. He expects Q2 to improve with Diwali arriving earlier this year.

Akzo Nobel India, facing a “stressed quarter,” saw profit slump 20.6% to ₹91 crore and revenue fall 4% to ₹995.1 crore. CMD Rajiv Rajgopal acknowledged competitive pressures, citing flat revenue trends across top players.

A major shake-up is also underway: JSW Paints is acquiring a 74.76% stake in Akzo Nobel India for about ₹9,000 crore, making it a formidable challenger to incumbents. With India’s paint industry valued at ₹75,000 crore and consumption driven by housing and infrastructure, analysts expect competition to intensify as festive demand kicks in.