Asian Paints’ Middle East sales defy soaring cost

Asian Paints’ international business posted strong growth across regions in the September quarter, with its Middle East operations holding up despite servicing challenges from the ongoing geopolitical situation, the company said in its earnings print Thursday.

Revenue from international operations rose 29.5% year-on-year to Rs 1,095.6 crore in Q2 FY27, while sales grew 23.7% in constant currency terms. Profit before tax in the business declined to Rs 52.7 crore, down 31%.

“The Middle East region also registered robust growth despite servicing challenges posed by the ongoing geopolitical situation,” MD & CEO, Amit Syngle said.

Indian paintmakers have been grappling with elevated raw material costs, with the Middle East conflict keeping crude oil prices high and disrupting supply chains.

Crude derivatives are key inputs for the paint industry, and geopolitical disruptions have also constrained material availability, squeezing margins even as companies raise prices to offset cost pressures.

Asian Paints' consolidated PAT margin for the quarter declined by 94 basis points to 10.7%.

"The operating environment this year has been marked by sharp raw material inflation and material availability constraints driven by geopolitical disruptions, the full impact of which was felt in Q2," Syngle added.

At the consolidated level, Asian Paints reported a 16.9% increase in net sales to Rs 9,953.9 crore in Q2 FY27. Its net profit rose 7.5% to Rs 1,062.79 crore, but Reuters reported that it missed LSEG estimates of Rs 1,145 crore.

The company said persistent inflationary pressures had prompted another round of staggered price increases in its decorative paints business, alongside stepped-up cost-efficiency initiatives.