Asian Paints , India's leading paint and decor company, has received approval for its plan to merge with Asian Paints (Polymers), marking a significant consolidation move within the group structure. This strategic decision comes as the company navigates through a challenging economic landscape, as reflected in its recently announced financial results for the first quarter of fiscal year 2026.

Merger Approval

The Board of Directors of Asian Paints Limited, in a meeting held on July 29, 2025, approved the Scheme of Amalgamation between Asian Paints (Polymers) Private Limited (AP Polymers) and Asian Paints Limited. AP Polymers, a wholly-owned subsidiary of Asian Paints, was incorporated on January 11, 2023, with the specific objective of manufacturing Vinyl Acetate Monomer (VAM) and Vinyl Acetate Ethylene Emulsion (VAE) for in-house consumption by Asian Paints.

The merger is expected to bring several benefits to the company:

1. Unlocking synergy benefits in back-end functions such as procurement, logistics, supply chain, and technology operations.
2. Reduction in legal and regulatory compliance complexities.
3. Streamlining of operations and alignment of business structure with its intended purpose.

It's important to note that this merger will not involve any cash consideration or change in the shareholding pattern of Asian Paints Limited, as AP Polymers is already a wholly-owned subsidiary.

Q1 FY'26 Financial Performance

Alongside the merger announcement, Asian Paints released its financial results for the quarter ended June 30, 2025, revealing a mixed performance:

The company faced headwinds due to subdued demand and macro-economic uncertainties:

1. Decorative Business in India registered a volume growth of 3.9% but saw a revenue decline of 1.2%.
2. Home Décor categories experienced a de-growth, attributed to pressure on household disposable incomes.
3. International business was a bright spot, registering a value growth of 8.4%, driven by strong performance in Asian markets, UAE, and Egypt.

Segment Performance

1. Industrial Coatings: Revenues grew by 8.8%, with strong performance in Auto & Protective coating segments.
2. Bath Fittings: Sales decreased by 5.1% to ₹88.70 crores.
3. Kitchen Business: Sales decreased by 2.3% to ₹98.10 crores.
4. White Teak and Weatherseal: White Teak sales decreased by 31.9%, while Weatherseal sales increased by 32.2%.

Amit Syngle, Managing Director & CEO of Asian Paints Limited, commented on the results: "The paint industry experienced a slight uptick this quarter, driven by marginally improved demand from urban centres, despite monsoons slowing the momentum in June. Confident in the long-term growth potential of home décor and paints industry, we continue to drive innovation and strengthen our brand saliency as we navigate the current demand challenges."

The merger approval and these financial results underscore Asian Paints' efforts to streamline operations and navigate through challenging market conditions. As the company moves forward with its consolidation plans, it remains focused on innovation and strengthening its market position in the paint and decor industry.

Asian Paints , India's leading paint and decor company, has announced its financial results for the first quarter of fiscal year 2026, revealing a mixed performance marked by volume growth in its decorative business despite overall revenue decline.

Decorative Business Outperforms Expectations

The company's decorative business in India registered a volume growth of 3.9%, surpassing market expectations of 3%. This performance was particularly noteworthy given the challenging market conditions, including macroeconomic uncertainties and an early onset of monsoons that typically slow down painting activities.

Revenue Decline Amid Volume Growth

Despite the positive volume growth, Asian Paints reported a slight decline in revenue:

The company attributed this revenue decline to a shift in product mix and subdued demand environment.

Profitability Under Pressure

The company's profitability metrics showed some pressure:

Segment Performance

1. International Business: Showed strong growth with sales increasing by 8.4% to ₹736.10 crores, driven by performance in Asian markets, UAE, and Egypt.

2. Industrial Coatings: Revenue grew by 8.8%, supported by good performance in Auto & Protective coating segments.

3. Home Décor Business: Experienced a slowdown due to subdued retail consumption, although the retail chain of Beautiful Homes Stores performed well.

Management Commentary

Amit Syngle, Managing Director & CEO of Asian Paints, commented on the results: "The paint industry experienced a slight uptick this quarter, driven by marginally improved demand from urban centres, despite monsoons slowing the momentum in June. Our revenues for the coatings business in India were 0.2% lower than last year. Domestic Decorative paints business did relatively better compared to the earlier quarters, registering a volume growth of 3.9% and a revenue decline of 1.2%."

He further added, "Confident in the long-term growth potential of home décor and paints industry, we continue to drive innovation and strengthen our brand saliency as we navigate the current demand challenges."

Looking Ahead

While facing short-term challenges, Asian Paints remains optimistic about the long-term potential of the home décor and paints industry. The company continues to focus on innovation and brand strengthening to navigate through the current demand uncertainties.

As one of the top 8 coatings companies globally, with operations in 14 countries and 26 paint manufacturing facilities, Asian Paints is well-positioned to capitalize on future growth opportunities in the sector.