Asian Paints prints its bad years honestly in its charts and its emissions headline wrongly on its front page: '69.2% reduction in absolute' emissions that its own climate chapter puts at 33%. A business it praises up front is impaired at the back.
In this article
In shortKey takeaways
- The highlights page (pp. 6-7) claims a '69.2% reduction in our absolute Scope 1 and 2 GHG emissions'. The climate chapter (p. 116) gives 69% for intensity and 33% for absolute emissions from the FY 2013-14 baseline.
- Standalone exceptional items include a ₹105.37 crore impairment of White Teak (Obgenix Software) and ₹60.59 crore for the new Labour Codes (p. 214). The front 190 pages never use the word 'impairment'. A 1% rise in the discount rate would add another ₹17.90 crore of impairment (pp. 490-491).
- The company sold its stake in Akzo Nobel India, 20,10,626 shares carried at ₹723.43 crore a year earlier (pp. 388-389). A ₹396.24 crore gain went through other comprehensive income straight to retained earnings, not the profit and loss account (pp. 366-367).
- International business revenue was ₹3,353.6 crore: Asia 41%, the Middle East 37%, Africa 17% and the South Pacific 5% (pp. 22-23).
- Market capitalisation fell 7.4% to ₹2,07,618 crore and RoCE was 28.9% against 41.2% two years earlier, both shown in the five-year charts (pp. 60-63).
- The double materiality assessment (pp. 91-97) prints its scoring thresholds, lists topics that dropped out, and was itself assured by Deloitte.
Official report: Get the Asian Paints Integrated Annual Report 2025-26 from the company's website. This page is The Footnotes' independent review of it.
Verdict: Asian Paints prints its bad years honestly in the charts, and its emissions headline wrongly on the front page. The highlights claim a 69.2% cut in absolute emissions; the company's own climate chapter says 33%. Score: 25 of 35.
The report has 580 printed pages. The integrated section takes the first 190, then come the Board's report (p. 214), the corporate governance report (p. 255), the BRSR (pp. 311-353) and the accounts. The PDF is built as two-page spreads; page numbers below are the printed ones. The file the company hosts has "rev" in its name, but the report carries no revision note. Screenshots are small excerpts reproduced for review and remain the copyright of Asian Paints Limited; there is also an online edition.
A 69.2% headline that should say 33%
The FY 2025-26 highlights page (pp. 6-7) reports a "69.2% Reduction in our absolute Scope 1 and 2 GHG emissions".
The climate chapter (p. 116) prints two separate numbers: a 69% reduction in emissions per kilolitre of paint, and a 33% reduction in absolute Scope 1 and 2 from the FY 2013-14 baseline. Its own chart shows absolute emissions at the decorative plants rising recently: 42,924 tCO2e in FY24, 51,758 in FY25, 51,876 in FY26.
So the page most readers see turns an intensity figure into an absolute one. That is the kind of error a final check should catch, and it matters because the climate target is itself intensity-only: an 80% cut in Scope 1 and 2 intensity by 2030. Scope 3 is about 94% of the total and has no target.
The ESG snapshot (pp. 8-11) is better. Every 2030 target sits next to its baseline and this year's figure, and it shows where progress has stalled. Specific electricity use is 87.3 kWh per kilolitre against a 2030 target of 54.4, and rising. Renewable electricity is 56.5%, down from 65.8% in FY24, against an aspiration of 100%. The report explains why (new plants stabilising, backward integration bringing energy-hungry processes inside the boundary), which is to its credit.
A competitor it won't name
This was a hard year. Decorative volume grew 8.7%, but value growth across coatings was 5.3% and standalone revenue rose 4.3%. The Chairman's letter talks about "industry consolidation" and "unprecedented competitive intensity" without saying who or what. The MD & CEO's "FY 2025-26 performance" paragraph contains no numbers at all: growth was "visible across all key financial parameters".
The CEO's letter is better on the six "growth accelerators" (brand, innovation, services, regional markets, B2B and backward integration). It gives new products at about 16% of revenue, 9.45 lakh painters and contractors trained, and the white cement plant at Fujairah commissioned. But its closing section repeats itself: two consecutive paragraphs both say the company enters the new year "with a broader opportunity set and a clear conviction in the path ahead".
The financial review (pp. 60-63) is where the honesty is. Twelve five-year charts include the unflattering ones: market capitalisation down 7.4% to ₹2,07,618 crore, RoCE of 28.9% against 41.2% two years earlier, and PAT of ₹4,244.2 crore still below FY24's ₹5,315.0 crore.
White Teak: praised in front, impaired at the back
The CEO's message and the MD&A describe the integration of White Teak, the decorative lighting brand, as supporting category expansion and growth.
The Board's report (p. 214) records what happened to its value. Standalone exceptional items were a ₹105.37 crore impairment of the investment in Obgenix Software, "popularly known by the brand name White Teak", plus ₹60.59 crore for the new Labour Codes. The year before, the same business had already taken an impairment. The goodwill note (pp. 490-491) adds that a 1% rise in the discount rate would mean a further ₹17.90 crore.
The word "impairment" doesn't appear anywhere in the first 190 pages. A reader of the narrative would think White Teak was a success. Note too that PAT grew 18.3% partly because exceptional charges were smaller this year; profit before exceptional items grew 11.7%. The highlights page gives no profit figure at all.
The Akzo Nobel sale that skipped the profit line
During the year Asian Paints sold its stake in Akzo Nobel India, a rival paint company. A year earlier it held 20,10,626 shares carried at ₹723.43 crore (pp. 388-389). The Board approved the divestment (pp. 260-261).
Because the holding was classified at fair value through other comprehensive income, the ₹396.24 crore gain on sale went straight to retained earnings (pp. 366-367). It never touched the profit and loss account. That is correct accounting, but it means one of the year's notable transactions is invisible in reported profit, and the integrated section doesn't explain it.
Where the international business is
The global footprint spread (pp. 22-23) has a number most reports leave out: international revenue of ₹3,353.6 crore, split by region.
| Region | Revenue (₹ crore) | Share |
|---|---|---|
| Asia (Bangladesh, Nepal, Sri Lanka) | 1,410.5 | 41% |
| Middle East (Oman, Bahrain, UAE, Qatar) | 1,255.4 | 37% |
| Africa (Egypt, Ethiopia) | 599.2 | 17% |
| South Pacific | 157.8 | 5% |
Source: Asian Paints Limited, Integrated Annual Report 2025-26, pp. 22-23. Excludes inter-company eliminations.
The same spread lists capacity at each Indian plant and the upcoming VAM/VAE chemicals plant at Dahej, part of the backward integration strategy.
Materiality with its thresholds printed
The materiality chapter (pp. 91-97) is one of the best in Indian reporting. The company ran a double materiality assessment in 2026, referencing ESRS 1 and EFRAG guidance. It prints its thresholds: impacts are material at 2.3 or above on a 3-point scale; risks and opportunities above 2. It says which topics dropped out (Biodiversity and Influencer Management). And it had the process itself assured by Deloitte, a step few Indian companies take.
One result needs explaining and doesn't get it: climate change and water are high on impact but low on financial materiality, for a manufacturer with 25 paint plants.
The value creation model (pp. 82-85) has numbers for every input: ₹20,781.6 crore of shareholders' funds, 11,162 permanent and 22,198 contractual employees, ₹124.9 crore of R&D. But it renames the capitals ("Natural resources", "Manufacturing capabilities") without mapping them to the Framework's six, and lists risks and material topics in boxes rather than linking them to outcomes.
A Board that signs, and a CCI matter in one paragraph
"About this report" (pp. 4-5) contains a Board Responsibility Statement: the Board "acknowledges its responsibility to ensure the integrity" of the report and records approval on 29 May 2026. Bharti Airtel, HDFC Bank and Hindustan Zinc have similar statements; most Indian reports don't.
The statutory disclosure is complete: 12 directors, six independent, 25% women. But the Competition Commission of India proceedings get one paragraph in the Board's report (p. 228), and none in the integrated section. The governance chapter's 2030 targets ("committed to be a leader in ESG assessments") have no metric or baseline, unlike every environmental target in the snapshot.
Spreads and no bookmarks
The design has a clear idea: shade cards on the section dividers and street-art projects in the ESG chapters. The PDF has 1,503 internal links, and the header icons work. But there are no bookmarks, so a 580-page file can only be navigated from the contents page. Every page between the covers is a two-page spread, which is awkward on a phone, and the PDF doesn't point readers to the online edition.
What other companies can copy
- A Board Responsibility Statement with an approval date (pp. 4-5).
- Materiality thresholds printed, dropped topics listed, the process assured (pp. 91-97).
- An ESG snapshot with baseline, current figure and target for every metric (pp. 8-11).
- Five-year charts that include the falling ones (pp. 60-63): market cap, RoCE, profit.
- International revenue by region on the footprint page (pp. 22-23).
What not to copy: a headline that calls an intensity cut absolute, an impairment left out of the narrative about the same business, and a 580-page PDF without bookmarks.
The score
| Criterion | Score (of 5) | Why |
|---|---|---|
| Strategy and narrative | 3 | Six accelerators used consistently; letters avoid numbers and never name the competition |
| Integrated thinking and the capitals | 4 | Numeric value creation model; renamed capitals and links as lists |
| BRSR and ESG integration | 4 | Assured double materiality with thresholds, a baseline-to-target snapshot; a mislabelled headline and intensity-only target |
| Governance disclosure | 4 | Board responsibility statement and complete disclosure; thin governance chapter, CCI in one paragraph |
| Financial storytelling | 4 | Five-year charts and ten-year table show the bad years; no profit on the highlights page, impairment missing from the narrative |
| Design and readability | 3 | A clear visual idea, but 580 pages of spreads and a repeated paragraph |
| Digital version | 3 | Many internal links and an online portal; no bookmarks, spreads, no pointer to the online edition |
| Total | 25 / 35 |
How it compares
Every review on The Footnotes uses the same seven-point card, so scores can be compared. Scores are editorial opinion of the published document.
| Company | Score (of 35) |
|---|---|
| Hindustan Zinc | 30 |
| HUL | 28 |
| TCS | 28 |
| Bharti Airtel | 27 |
| L&T | 27 |
| Reliance | 27 |
| HDFC Bank | 26 |
| Asian Paints (this review) | 25 |
| ICICI Bank | 25 |
| Infosys | 25 |
| LTM | 25 |
| Tata Steel | 25 |
| Mahindra & Mahindra | 24 |
| Titan | 23 |
| Adani Ports | 22 |
| ITC | 21 |
| SBI | 21 |
| Sun Pharma | 21 |
| Bajaj Finance | 20 |
| NTPC | 20 |
Frequently asked questions
How much has Asian Paints cut its emissions?
The highlights page says 69.2% in absolute Scope 1 and 2 emissions. The climate chapter (p. 116) reports a 69% reduction in specific emissions per kilolitre and a 33% reduction in absolute Scope 1 and 2 emissions from the FY 2013-14 baseline. Absolute emissions at decorative plants were 51,876 tCO2e in FY 2025-26, up from 42,924 in FY 2023-24.
What were Asian Paints' exceptional items in 2025-26?
Standalone exceptional items of ₹166.5 crore comprised a ₹105.37 crore impairment of the investment in Obgenix Software (White Teak) and a ₹60.59 crore one-time Labour Codes charge (p. 214). PAT grew 18.3%; profit before exceptional items grew 11.7%.
Did Asian Paints sell its Akzo Nobel India stake?
Asian Paints held 20,10,626 shares of Akzo Nobel India, carried at ₹723.43 crore at March 2025 (pp. 388-389), and sold them during the year after Board approval. Because the holding was measured at fair value through other comprehensive income, a ₹396.24 crore gain was transferred to retained earnings rather than reported in profit (pp. 366-367).
How does Asian Paints assess materiality?
In 2026, with reference to ESRS 1 and EFRAG guidance. Impacts are material at 2.3 or above on a 3-point scale; risks and opportunities above 2. Biodiversity and Influencer Management dropped out. The process was assured by Deloitte Haskins & Sells (pp. 91-97).
How does The Footnotes score annual reports?
Seven criteria, each scored 1 to 5 with a one-line reason: strategy and narrative; integrated thinking and capitals; BRSR and ESG integration; governance disclosure; financial storytelling; design and readability; and the digital version. Scores are editorial opinion based on the published document, and the same card is used for every company so results can be compared.
Sources
- Asian Paints: Annual Reports (investor pages) — Asian Paints Limited
- Asian Paints: Integrated Annual Report 2025-26 (online edition) — Asian Paints Limited
- Integrated Reporting Framework (IFRS Foundation) — IFRS Foundation
- SEBI circular: BRSR Core, framework for assurance and ESG disclosures for value chain (12 July 2023) — SEBI
