Shalimar Paints Posts Wider Loss in June Quarter Despite Revenue Uptick

Shalimar Paints Ltd., one of India’s oldest decorative coatings manufacturers, reported a consolidated net loss of 166.7 million rupees for the quarter ended June 2025, reflecting continued pressure on margins and operational costs. While the company registered a modest rise in revenue from operations at 1.53 billion rupees, the bottom line remained in the red, extending its streak of quarterly losses.

The June-quarter performance underscores the challenges faced by mid-tier paint companies in a market increasingly dominated by larger players with deeper distribution networks and stronger pricing power. Shalimar’s results also highlight the impact of inflationary input costs and subdued demand in key segments.

Key Financial Highlights for Q1 FY26

- Consolidated net loss widened to 166.7 million rupees, compared to a loss of 138.2 million rupees in the same quarter last year  
- Revenue from operations rose to 1.53 billion rupees, up 6.4 percent year-on-year  
- Gross margins remained under pressure due to elevated raw material costs, particularly for titanium dioxide and solvents  
- Operating expenses increased by 9.2 percent, driven by higher freight and marketing costs  
- No dividend was declared for the quarter  

Segment-Wise Performance

1. Decorative Paints  
   - Continued to be the largest contributor to revenue  
   - Sales volume grew marginally, but pricing remained flat due to competitive pressures  
   - Urban demand showed signs of recovery, while rural markets remained sluggish  

2. Industrial Coatings  
   - Revenue declined slightly due to project delays and lower infrastructure spending  
   - The segment faced margin compression due to higher input costs and delayed payments from institutional clients  

3. Export Business  
   - Export revenue remained flat, with muted demand from Middle East and Southeast Asian markets  
   - Currency fluctuations and shipping delays impacted profitability  

Operational and Strategic Updates

- The company is undertaking a cost optimization program aimed at reducing overheads by 10 percent over the next two quarters  
- Investments in automation and digital sales channels are underway to improve operational efficiency  
- Shalimar Paints is exploring strategic partnerships to expand its distribution footprint in Tier-2 and Tier-3 cities  
- The company has launched a new range of eco-friendly emulsions targeting premium urban consumers  

Market Context and Competitive Landscape

- The Indian paints industry continues to grow at a steady pace, driven by urbanization and rising disposable incomes  
- Larger players such as Asian Paints and Berger Paints have gained market share through aggressive pricing and brand visibility  
- Smaller firms like Shalimar are grappling with margin pressures and limited scale advantages  
- Raw material inflation and logistics bottlenecks remain key concerns across the sector  

Outlook for the Coming Quarters

Despite the weak start to FY26, Shalimar Paints remains cautiously optimistic about a recovery in the second half of the fiscal year. The company expects demand to pick up during the festive season and is banking on its new product launches to drive growth. However, sustained profitability will depend on its ability to manage costs and improve operational leverage.

Sources: Business Standard, Economic Times Markets, Mint, CNBC-TV18.