Akzo Nobel India Navigates Q2 FY26 with Strategic Shifts and Future Vision

Akzo Nobel India Limited has unveiled its financial performance for the second quarter of fiscal year 2026, marking a period of strategic recalibration and significant corporate developments. The company reported a revenue of 834.9 crore, reflecting a 1.5% decrease compared to the restated figures from the previous year. While gross margins saw a slight contraction to 41.3% from 42.9%, disciplined cost management helped maintain EBIT margins at a stable 11.1%. Profit After Tax (PAT), excluding exceptional items, stood at 730 crore. However, the quarter was significantly impacted by an exceptional income of 18.7 billion rupees from the divestment of the Powder Coatings business, boosting the reported PAT to a substantial 16,827 crore. This quarter's results underscore the company's ongoing transformation and its proactive approach to market dynamics.

Segmental Performance and Market Dynamics

Despite the overall revenue decline, Akzo Nobel India achieved a commendable 3% volume growth across both its Decorative and Industrial Coatings segments. This growth, however, was offset by strategic pricing corrections implemented to enhance competitiveness, particularly in the mass market. The B2C segment faced challenges due to inclement weather in key geographies and a shortened festive season, impacting painting activity. Conversely, the premium segment within Decorative Paints demonstrated robust growth, nearing mid-single digits, a trend mirrored in the Automotive and Specialty Coatings (ASC) business. The Coatings vertical, encompassing Industrial, Marine, and Protective segments, reported strong order books and new partnerships, indicating healthy demand. The company's focus on high-margin businesses like ASC, despite a high base effect from the previous year, highlights its commitment to a profitable product mix.

Strategic Initiatives and Future Outlook

The quarter was marked by several strategic initiatives aimed at bolstering market position and driving future growth. The company relaunched its mass-market propositions, including Dulux Promise and Weathershield Projects, with a focus on aggressive pricing to regain market share. A significant digitization roadmap is underway, including the development of a state-of-the-art lead management system, to enhance productivity and distribution efficiency. New product launches, such as the premium Velvet Touch Eterna and high-sheen entry-level emulsions, have been well-received, strengthening the product portfolio across various price points. Furthermore, the company is poised to launch construction chemicals by December 2025, a move expected to diversify its offerings and tap into new growth avenues.

Management expressed strong optimism for the upcoming quarters, particularly Q3 FY26, anticipating double-digit volume growth and high single-digit revenue growth. This positive outlook is underpinned by the strategic backing of the JSW Group, which is expected to bring a new level of aggression and market play. The company also foresees a significant boost from the repainting cycle, projected to commence in Q4 FY26 and Q1 FY27, driven by post-COVID demand. With a clear guidance of achieving a sustained EBITDA margin of 14% to 16%, Akzo Nobel India is strategically positioning itself for a period of robust growth and market leadership, emphasizing superior execution and product innovation to deliver shareholder value.