Paint companies took an a price hike of 1.5 percent on average in March, according to a BloombergQuint survey of 35 dealers across India.
The industry has witnessed an increase in raw material prices over the last six months. Crude and crude-linked derivatives such as monomers and solvents, for instance titanium dioxide, are key raw materials for these companies. And while crude oil prices rose significantly in the past four to five months, the increase in derivative prices usually occurs after a three to six month lag. As a result, the full impact of the increase in crude prices will likely be visible in the fourth quarter.
Higher raw material prices have dented gross margins of paint manufacturers in the October-December quarter. While the post-earnings commentary from most company managements was largely bullish on the recovery in domestic demand, companies had also sounded caution on input prices and guided for a price hike.
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