Asian Paints Q3 Results
Bottomline hurt by labour law
I am thinking that I need to paint my house and use Asian Paints - then only this company will do well 🤣
Asian Paints has reported its Q3FY26 numbers on Tuesday during market hours. Asian Paints share price tanked 5% post the announcement. Let us look at the details. For more such content, subscribe to my newsletter for FREE.
Asian Paints Consolidated Results, Q3FY26
Consolidated Net Sales increased by 3.9% to Rs 8,849.7 crore from Rs 8,521.5 crore.
PBDIT (Profit before depreciation, interest, tax, other income, and exceptional items) increased by 8.8% to Rs 1,781.0 crore from Rs 1,636.7 crore.
PBDIT Margin as % to Net Sales increased to 20.1%, up from 19.2% in the same quarter last year.
Profit before exceptional items and tax increased by 8.5% to Rs 1,646.7 crore from Rs 1,518.2 crore.
Net Profit before minority interest and exceptional items increased 7.7% to Rs 1,215.7 crore.
Net Profit after minority interest decreased by 4.6% to Rs 1,059.9 crore from Rs 1,110.5 crore.
Asian Paints Standalone Results, Q3FY26
Standalone Net Sales increased by 2.9% to Rs 7,601.5 crore from Rs 7,383.9 crore.
PBDIT (Profit before depreciation, interest, tax, other income, and exceptional items) for the quarter increased by 7.8% to Rs 1,626.7 crore from Rs 1,508.8 crore.
PBDIT Margin as % to Net Sales increased to 21.4% from 20.4% in the corresponding period of the previous year.
Profit before exceptional items and tax increased by 7.1% to Rs 1,581.4 crore from Rs 1,476.2 crore.
Net Profit before exceptional items increased 6.6% to Rs 1,176.6 crore.
Net Profit decreased by 7.1% to Rs 1,025.3 crore from Rs 1,104.1 crore.
Note on Exceptional Items in Q3FY26
On Consolidated Financials:
Exceptional items of Rs 157.61 crore in the Consolidated Financial Results have been recognized for the quarter ended 31st December 2025 comprising of:
Impact of Labour Code: One-time expense of Rs 63.74 crore towards increase in the gratuity liability by Rs 52.88 crore and increase in the liability towards compensated absences by Rs 10.86 crore.
Impairment Loss of Rs 93.87 crore on ‘Intangibles’, recognised on acquisition of Obgenix Software Private Limited (‘White Teak’).
On Standalone Financials:
Exceptional item of Rs 166.53 crore in the Standalone Financial Results has been recognized for the quarter ended 31st December 2025 comprising of:
Impact of Labour Code: One-time expense of Rs 60.56 crore towards increase in the gratuity liability by Rs 50.26 crore and increase in the liability towards compensated absences by Rs 10.30 crore.
Impairment Loss of Rs 105.97 crore based on the assessment of the recoverable value of investment in Obgenix Software Private Limited (‘White Teak’).
Segment Highlights:
International business
Net Sales increased in Q3FY26 by 6.3% to Rs 869.6 crore from Rs 818.0 crore led by units in Sri Lanka, UAE and Ethiopia. In constant currency terms, Net Sales increased by 4.2%. Profit before exceptional items and tax in Q3FY26 was Rs 76.6 crore as against Rs 60.8 crore in the corresponding period of the previous year.
Home Décor business:
i. Bath Fittings business:
Net Sales decreased in Q3FY26 by 4.1% to Rs 84.0 crore from Rs 87.6 crore. Profit before exceptional items and tax in Q3FY26 came in at Rs 0.2 crore against loss of Rs 7.4 crore in the corresponding period of the previous year.
ii. Kitchen business:
Net Sales increased in Q3FY26 by 2.6% to Rs 105.4 crore from Rs 102.8 crore. Loss before exceptional items and tax in Q3FY26.
iii. White Teak and Weatherseal:
Net Sales at White Teak in Q3FY26 increased by 12.4% to Rs 29.2 crore, and for Weatherseal, it increased by 58.6% to Rs 18.7 crore.
Industrial business:
i. APPPG:
Net Sales increased by 16.5% in Q3FY26 to Rs 334.7 crore from Rs 287.3 crore. Profit before exceptional items and tax in Q3FY26 was Rs 26.7 crore as against Rs 24.1 crore in the same period last year.
ii. PPGAP:
Net Sales increased in Q3FY26 by 16.9% to Rs 713.3 crore from Rs 610.1 crore. Profit before exceptional items and tax in Q3FY26 was Rs 179.2 crore as against Rs 134.8 crore in the same period last year.
Asian Paints Target Price
Asian Paints opened 6% lower on Wednesday.
HSBC downgraded the stock to Hold and lowered Asian Paints price target to Rs 2,900. It highlighted disappointing volume and revenue growth in Q3 and warned that weak retail demand could persist. Although margins were strong, HSBC believes much of the benefit is already factored into FY26, with downside risks emerging for FY27.
Goldman Sachs reiterated a Sell rating with a price target of Rs 2,500. The brokerage said Q3 results were below expectations, with India decorative demand remaining weak despite a favourable base. It also pointed to muted demand commentary, expecting value growth to stay in the mid-single-digit range in the near term. Goldman added that margins are currently at the upper end of guidance, but further gains are likely to be reinvested into the business.
Citi also maintained a Sell rating, with a price target of Rs 2,300, cutting FY26–28 revenue estimates by 3 percent due to slower-than-expected growth momentum.
On the positive side, Jefferies retained its Buy rating and a price target of Rs 3,300. It said domestic volume growth moderated due to seasonality but remained healthy at around 8 percent year-on-year. However, it also flagged that consolidated revenue growth was nearly half of volume growth, which remains a key issue. Management acknowledged rising competition but still delivered margins of about 20 percent, at the upper end of its guidance, while reiterating a positive growth outlook focused on market share gains.
Nomura also reiterated a Buy rating with a Asian Paints price target of Rs 3,250. It attributed weaker volumes to fewer painting days during the quarter, noting an improvement in January. Gross margins hit a multi-quarter high, and operating margins were at the top end of guidance and are expected to sustain.
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Really sharp analysis of these results. The labour code impact being separated out as exceptional is crucial context - it shows the underlying business actually performed well despite the headline profit drop giving a diferent impression. I remember when simmilar accounting adjustments confused me during earnings season until I learned to look beyond the top-line numbers.