JSW Dulux Q1 FY27: Growth holds up, margins feel the raw material squeeze

JSW Dulux Limited (formerly Akzo Nobel India) entered FY27 with a strong like-to-like topline performance, even as cost and currency volatility stayed elevated. For Q1 FY27, like-to-like standalone net revenue rose to 965 crore from 812 crore, a growth of 18.8%. Like-to-like EBITDA increased to 115.1 crore from 100.4 crore, up 14.7%.

The headline profit number needs a footnote. Profit after tax for the quarter was 135.5 crore versus 67.2 crore in the like-to-like base, but management clarified that this included two one-offs: dividend income of 55.9 crore from ICI India Research and Technology Centre Private Limited and interest income of 21.5 crore on an income tax refund.

What drove the quarter: volume-led growth across verticals

Management described the quarter as one of its strongest in recent years from a growth standpoint. The CEO stated that volume growth for the quarter was 25%. He also noted that even after adjusting for price, volume growth would still be around 18% to 19%. The company also indicated that decorative paints grew in double digits, while industrial paints grew upwards of 25%, supported by B2B wins in infrastructure, power, coil sectors and automotive OEMs.

Alongside operating execution, the quarter also included a major internal transition. Management said the headquarters was shifted from Delhi to JSW Centre in Mumbai during April to June, and the business continued to deliver growth through that period.

Financial snapshot (like-to-like, standalone)

Note: PAT includes one-off dividend income and interest on income tax refund, as disclosed by management.

Margins: why gross margin fell despite higher revenue

While revenue growth was strong, the gross margin percentage fell sharply to 37.4% from 43.5% (like-to-like). Management attributed the pressure to elevated raw material costs and timing effects from inventory.

A key operational detail from the call was inventory cover. Management stated blended inventory was about 95 days, with decorative at about 60 days. This meant the decorative business had to buy higher-priced stocks around end-March, which flowed through to Q1 margins. Management added that this impact should moderate as higher-priced inventory gets exhausted.

The CEO also referred to a reclassification of promotional spends, moving certain promotional items to gross revenue in line with industry practice. Management indicated that this reporting change affected gross margin presentation.

At the EBITDA level, margin declined to 11.9% from 12.4%. Management explained that the company continued to invest for growth, including adding headcount, while still controlling operating expenses. The CEO specifically mentioned hiring around 160 people as part of building a stronger growth engine, including capability building in R&D and field presence.

Strategy in decorative: brand, premium focus, and distribution expansion

The investor deck positioned decorative paints around five priorities: strengthening Dulux brand equity, driving innovation in premium and adjacent categories, meaningful distribution expansion, stronger play in projects, and building organizational capability.

Brand investments highlighted in the presentation included a Dulux Assurance media campaign and a Colour Story activation for premium interior emulsions in East and West. On innovation, JSW Dulux showcased launches such as Velvet Touch finishes and Aquatech interior waterproofing. It also entered the water-based PU woodcare segment through Sadolin Hydro PU.

In the concall, management described a micro-market execution approach, focusing first on markets where the company already has higher market share and then addressing low-share markets with sharper portfolio and distribution plans. A clear operational target was stated: the company has availability across more than 5,000 towns, but meaningful active presence is about 3,400 to 3,500 towns. Management’s plan is to take that to about 4,500 towns during the year, focusing on towns with population above 20,000.

Management also described a plan to shift to a direct or hybrid model in select high-share, high-potential markets, while continuing the distributor model where it has worked well historically.

Industrial coatings and integration: Project Akshaya starts delivering

The company framed industrial paints as a meaningful growth engine, backed by brands such as Sikkens and International and a presence across multiple industrial verticals. In the quarter commentary, management highlighted momentum from infrastructure, power, coil sectors and automotive OEM wins.

A key theme for investors is integration with JSW Paints. Management discussed Project Akshaya, an integration and efficiency program intended to unlock synergies and fund growth initiatives. The investor deck stated that 2.4 crore of synergies were realized in Q1 FY27.

Management described the program’s workstreams as:

• Cross manufacturing and capacity optimization
• End-to-end supply chain redesign for faster response
• ERP and systems integration, with ERP migration planned by end of the year
• Alignment of functional structures and unified business teams, including a unified projects team

The CFO also noted that governance was a priority in executing synergies, including using external support for robust frameworks.

Competitive intensity remains a near-term overhang

On the demand environment, management pointed to continued competitive intensity in decorative paints. The CEO said the decorative business is expected to remain very competitive for the next 1 to 2 years, with new entrants still using discounting as a strategy.

When questioned about discounting and rebates, management clarified that the company’s discount line also includes distributor commission, which affects comparability. Management reiterated that pricing benchmarks are taken versus the market leader rather than newer entrants.

Takeaways

JSW Dulux delivered a strong like-to-like growth quarter in Q1 FY27, supported by volume expansion across decorative and industrial businesses. The trade-off came in margins, with gross margin pressure driven by raw material inflation and inventory timing, and EBITDA margins reflecting continued investments in growth.

The next few quarters will be watched for three things management itself emphasized: whether margins normalize as inventory resets, whether the distribution and micro-market strategy translates into sustained share gains, and how quickly Project Akshaya scales from early savings into a larger funding engine for growth initiatives.