Akzo Nobel India Limited , a leading paints and coatings company and maker of Dulux Paints, has announced its financial results for the second quarter and first half of the fiscal year 2025-26, revealing a significant surge in net profit driven by exceptional items.

Q2 FY2025-26 Highlights

The company reported a remarkable increase in net profit for Q2 FY2025-26, reaching ₹1,682.7 crore, up from ₹97.9 crore in the same quarter last year. This substantial growth is primarily attributed to exceptional items amounting to ₹1,874.2 crore, which includes profits from the sale of its Powder Coatings business division and International Research Center division.

However, the company faced challenges in its core operations:

• Revenue from operations decreased by 15.0% to ₹834.9 crore, compared to ₹982.3 crore in Q2 FY2024-25.
• EBIT (Earnings Before Interest and Taxes) from operations declined by 25.7% to ₹92.3 crore, down from ₹124.2 crore in the corresponding quarter of the previous year.

H1 FY2025-26 Performance

For the first half of FY2025-26, Akzo Nobel India reported:

• A 9.3% decrease in revenue from operations, totaling ₹1,830.0 crore, compared to ₹2,018.6 crore in H1 FY2024-25.
• EBIT from operations fell by 23.1% to ₹208.5 crore, down from ₹271.3 crore in the same period last year.
• Net profit, including exceptional items, rose significantly to ₹1,773.7 crore, a 734.5% increase from ₹212.5 crore in H1 FY2024-25.

Performance Excluding Divested Business

Excluding the divested Powder Coatings and IRC businesses, the company's results for Q2 FY2025-26 were as follows:

Management Commentary

Rajiv Rajgopal, Chairman and Managing Director of Akzo Nobel India Limited, commented on the results: "In Q2 FY2025-26, volume growth partially countered the impact of weather disruptions and competitive pressure on our topline. B2B vertical growth was led by industrial coatings and demand across mining, power and automotive sectors. Although retail remained under pressure, premium product portfolio witnessed a renewed uptick in demand."

He added, "Margins were constricted by vertical mix dynamics; however, disciplined operational cost control safeguarded our profitability. Navigating a challenging operating environment in H1 FY2025-26, the Company sustained its double-digit profitability while investing in brand, innovations and growth initiatives."

Recent Highlights

• The company celebrated five years of Dulux Assurance with the 'Lage Shaandaar, Chale Shaandaar' campaign.
• In decorative paints, Akzo Nobel India launched two flagship mass-market brand renovations:
  • Dulux Promise range of interior and exterior emulsions was upgraded with Colour Lock technology and superior wipe-ability for interiors.
  • Dulux Weathershield Projects was re-introduced at a more competitive price point in the entry-level exterior emulsion segment.
• The company expanded its Interdur range of anti-corrosive protective coatings with the launch of Interdur 1133 and Interdur 1135.

Despite facing challenges in its core operations, Akzo Nobel India's exceptional items have significantly boosted its financial performance for the quarter and half-year. The company continues to focus on innovation and brand initiatives while navigating a competitive market environment.

Akzo Nobel India , a leading decorative and industrial paints company, is set to see a significant change in ownership as JSW Paints announces plans to acquire up to 26% stake in the company. The open offer, valued at ₹2,997.11 crore, marks a substantial move in the Indian paints sector.

Key Details of the Acquisition

• Offer Size: JSW Paints aims to acquire up to 1,18,40,482 fully paid-up equity shares, representing 26% of Akzo Nobel India's voting share capital.
• Offer Price: ₹3,231.77 per equity share.
• Total Consideration: Up to ₹2,997.11 crore, assuming full acceptance.

Strategic Implications

This acquisition is part of a larger transaction where JSW Paints has agreed to purchase up to 74.76% of Akzo Nobel India's voting share capital from its current promoters. The deal structure includes:

1. Direct acquisition of up to 3,40,44,335 equity shares (74.76%) from the current promoters.
2. An open offer to public shareholders for an additional 26% stake.

Financial Arrangements

JSW Paints has made firm financial arrangements for the offer:

• Escrow account established with Kotak Mahindra Bank Limited.
• Bank guarantee of ₹500.00 crore provided.
• Cash deposit of ₹42.00 crore made in the escrow account.

Market Impact

The acquisition is expected to significantly alter the competitive landscape of the Indian paints industry. JSW Paints, part of the $23 billion JSW Group, will gain substantial market share and access to Akzo Nobel India's established brand and distribution network.

Regulatory Approvals

The deal has received approval from the Competition Commission of India, a key regulatory requirement for its completion.

Outlook

This strategic move by JSW Paints underscores its ambition to expand its presence in the Indian paints market. The acquisition of Akzo Nobel India, with its strong market position and diverse product portfolio, is likely to accelerate JSW Paints' growth trajectory and enhance its competitive position in the industry.

Investors and industry observers will be keenly watching how this acquisition unfolds and its potential impact on the dynamics of the Indian paints sector.

Note: The open offer is subject to various terms and conditions as detailed in the Letter of Offer.