Hyperbranched alkyd was synthesized by single‐step approach using trimethylolpropane, mono pentaerythritol as core material, and 2,2‐bis(methylol)propionic acid (DMPA), a combination of dehydrated castor oil fatty acid and coconut oil fatty acid as chain extender. A series of hyperbranched alkyds were prepared at different degree of branching in the alkyd structures by changing the amount of DMPA in the alkyd resin formulation. The resins were characterized by Fourier transform infrared and 1H‐nuclear magnetic resonance (NMR) spectroscopic technique. These hyperbranched alkyds were converted into polyurethane coating after reaction with hexamethylene diisocyanate trimer at a definite ratio in the presence of dibutyltin dilaurate as a catalyst. The effect of branching and polymeric chain entanglement on the glass transition temperature, Tg of the alkyd polyurethane coating (APUC) was studied by differential scanning calorimetry technique. The performance of such APUC in terms of gloss, gloss retention under accelerated QUV radiation, natural outdoor exposed condition, mechanical, and corrosion resistance properties were enhanced with the increase of polymeric chain entanglement, i.e., compactness or higher order of branching in the alkyd resin structure. © 2017 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2018, 135, 45835.