Quarterly Revenue and Earnings Analysis
Akzo Nobel India Ltd, a key player in the paints sector, reported net sales of ₹907.70 crores for the quarter ended December 2025, marking a 7.0% decline compared to its previous four-quarter average. This contraction highlights the challenges faced by the company in sustaining top-line growth amid a competitive and cost-sensitive market environment. Earnings per share (EPS) also hit a low of ₹16.33, reflecting the pressure on profitability during the quarter.
The company’s current share price stands at ₹2,864.10, up 1.62% from the previous close of ₹2,818.55, with a 52-week trading range between ₹2,649.05 and ₹3,909.25. Despite the recent uptick, the stock has underperformed the broader market indices over multiple time horizons, notably delivering a negative 25.41% return over the past year compared to the Sensex’s 8.79% gain.
Financial Trend Improvement: From Negative to Flat
MarketsMOJO’s financial trend parameter for Akzo Nobel India Ltd has shifted from negative to flat in the latest quarter, improving from a score of -15 to -5 over the past three months. This change indicates a stabilisation in the company’s financial health, although it remains far from a positive trajectory. The flat trend suggests that while the company has arrested the steep decline seen previously, it has yet to demonstrate a clear recovery or growth momentum.
One bright spot in the financial metrics is the company’s debtors turnover ratio, which reached a high of 7.29 times in the half-year period. This improvement points to enhanced efficiency in receivables management, potentially aiding cash flow stability. However, other key indicators remain subdued, with the return on capital employed (ROCE) at a low 22.13% and cash and cash equivalents at ₹282.80 crores, the lowest in recent periods.
Turnaround taking shape! This Small Cap from NBFC sector just hit profitability with strong business fundamentals showing up. Catch it before the major breakout happens!
- - Recently turned profitable
- - Strong business fundamentals
- - Pre-breakout opportunity
Comparative Performance Versus Sensex
Akzo Nobel India Ltd’s stock performance has lagged behind the benchmark Sensex index across most time frames. Over the past week, the stock declined by 1.18%, while the Sensex gained 2.58%. The underperformance widened over the last month and year-to-date periods, with the stock falling 10.92% and 9.73% respectively, compared to the Sensex’s modest declines of 2.09% and 1.47%.
Longer-term returns also paint a challenging picture for investors. Over one year, the stock’s return was -25.41%, starkly contrasting with the Sensex’s 8.79% gain. Even over three and five years, Akzo Nobel’s returns of 29.92% and 24.63% lag behind the Sensex’s 38.02% and 67.09%. The ten-year return of 121.63% is less than half the Sensex’s 246.65%, underscoring persistent underperformance relative to the broader market.
Margin Pressures and Profitability Concerns
Despite stabilising revenue trends, Akzo Nobel India Ltd continues to face margin pressures that have constrained profitability. The company’s ROCE at 22.13% is the lowest recorded in recent half-year periods, signalling diminished capital efficiency. This decline may be attributed to rising input costs, competitive pricing pressures, or increased operating expenses within the paints sector.
Cash reserves also remain tight, with cash and cash equivalents at ₹282.80 crores, the lowest in recent reporting periods. This limited liquidity could restrict the company’s ability to invest in growth initiatives or weather market volatility. Investors should monitor these metrics closely as they reflect the company’s operational resilience and financial flexibility.
Considering Akzo Nobel India Ltd? Wait! SwitchER has found potentially better options in Paints and beyond. Compare this small-cap with top-rated alternatives now!
- - Better options discovered
- - Paints + beyond scope
- - Top-rated alternatives ready
Mojo Score and Rating Update
MarketsMOJO has downgraded Akzo Nobel India Ltd’s mojo grade from Hold to Sell as of 22 September 2025, reflecting the company’s subdued financial performance and challenging outlook. The current mojo score stands at 47.0, indicating a cautious stance on the stock. The market capitalisation grade is rated 3, suggesting a mid-tier valuation relative to peers in the paints sector.
This downgrade underscores the need for investors to exercise prudence, given the company’s flat financial trend, declining sales, and margin pressures. While operational efficiencies such as improved debtor turnover offer some respite, the overall financial health remains under strain.
Outlook and Investor Considerations
Akzo Nobel India Ltd’s recent quarterly results suggest a company at a crossroads. The shift from negative to flat financial trend signals a potential bottoming out of performance, but the absence of revenue growth and margin expansion tempers optimism. Investors should weigh the risks posed by declining sales and profitability against the stabilising operational metrics.
Given the stock’s persistent underperformance relative to the Sensex and the downgrade to a Sell rating, cautious investors may prefer to monitor developments closely before committing fresh capital. The paints sector remains competitive, and Akzo Nobel’s ability to regain growth momentum and improve capital efficiency will be critical to reversing its recent trend.
In summary, while the company has arrested a sharper decline, it faces an uphill task to restore robust growth and profitability in the near term.
Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →
