AKZOINDIA - Akzo Nobel

📊 NSE: AKZOINDIA 🏢 Paints / Varnishes 📅 Last Updated: 12/13/2025 18:07

💰 Financial Performance

Revenue Growth by Segment

Reported revenue for Q2 FY26 was INR 834.9 Cr, which is 1.5% lower than the previous year on a comparable basis. B2C segments were impacted by inclement weather and a shortened festive season, while mid-businesses in B2B segments reported the fastest growth.

Profitability Margins

Gross margin for Q2 FY26 stood at 41.3%, experiencing a dilution of 1.6% due to vertical product mix and raw material inflation. EBIT margin remained stable at 11.1% due to disciplined cost management.

EBITDA Margin

The company has provided guidance to maintain an EBITDA margin of 14% to 16% on a sustained basis. Double-digit profitability has been sustained despite volume growth being offset by pricing corrections.

Credit Rating & Borrowing

CRISIL withdrew its A1+ rating for the company's INR 500 million short-term debt (including commercial paper) in 2016 as there was no outstanding amount, indicating a zero-debt or highly liquid position.

⚙️ Operational Drivers

Raw Materials

Specific raw material names are not listed, but the company reported raw material inflation in its Coatings businesses, impacting gross margins by approximately 1.6%.

Raw Material Costs

Raw material costs led to a 1.6% dilution in gross margins in Q2 FY26. The company is managing these through product mix improvements in the retail business and disciplined cost management.

Manufacturing Efficiency

The company maintains stability in EBIT (11.1%) through disciplined cost management and controlling operating expenses (opex) while supporting marketing pushes.

📈 Strategic Growth

Expected Growth Rate

Growth Strategy

Growth will be achieved through an 'aggressive' strategy following the acquisition by JSW Group, focusing on Liquid Coatings after divesting the Powder Coatings business for INR 1,870 Cr. The strategy includes marketing campaigns like 'Lage Shaandaar, Chale Shaandaar' and leveraging synergies with JSW Paints.

Products & Services

Liquid Coatings, Decorative Paints, and related services.

Brand Portfolio

Dulux, Dulux Assurance.

New Products/Services

The company celebrated 5 years of Dulux Assurance with the 'Lage Shaandaar, Chale Shaandaar' campaign to drive retail growth.

Market Expansion

Focusing on Liquid Coatings following the divestment of the Powder Coatings business and the International Research Center to streamline the portfolio.

Strategic Alliances

JSW Paints Limited has become a promoter after acquiring 2,78,71,723 equity shares. The company also partners with AkzoNobel NV for portfolio reviews.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward Liquid Coatings and increased competition. AkzoNobel is positioning itself through portfolio rationalization and aggressive marketing under new promoter leadership.

Competitive Landscape

Key competitors include other major paint manufacturers, with JSW Paints now acting as a strategic promoter and partner.

Competitive Moat

The moat is built on the Dulux brand and the 'Dulux Assurance' program, which provides a competitive edge in the retail segment. This is sustained through high-decibel marketing campaigns.

Macro Economic Sensitivity

The business is sensitive to GDP growth, inflation, and seasonal weather patterns which impact construction and painting cycles.

Consumer Behavior

Demand is highly seasonal and weather-dependent, with a preference for established brands offering quality assurance.

Geopolitical Risks

Geopolitical risks and market disruptions are noted as factors that could cause actual results to differ from forecasts.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental risks, legal issues, and legislative/fiscal measures. Cost records are maintained under Section 148(1) of the Companies Act.