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Paint prices in India could increase by 2 to 5 per cent in April if crude oil prices continue to remain at current high levels, according to a report by Systematix Research.
The report noted that dealers expect paint companies to raise product prices next month if crude prices sustain at elevated levels. However, companies have not yet indicated any price hikes and may wait for further clarity on crude oil movements and cost pressures. "If crude sustains at current high levels, most dealers expect product price hikes of 2-5% in April (more if crude climbs to higher levels for a longer period)," the report said. Dealers highlighted that paint companies have not announced any price increases so far. Companies are likely to wait through March 2026 to assess whether crude prices stabilize and to better understand the cost impact before taking any pricing decisions. The report also noted that companies may remain cautious due to elevated competitive intensity in the sector. It believes that any initial price hikes are likely to be limited and implemented gradually. According to the report, price increases would occur if crude prices remain high for a prolonged period. The report stated that the first round of hikes would likely be limited to low single digits and may be staggered over the first quarter of FY27. It further added that additional price hikes could follow if crude oil prices rise further and continue to stay at higher levels for an extended period. The impact on margins would depend on where crude oil prices settle, how long they remain at those levels, and the pricing actions taken by companies. According to the report's long-term analysis, a roughly 10 per cent quarter-on-quarter increase in crude prices has historically resulted in about a 130 basis point quarter-on-quarter decline in gross margins in aggregate. Meanwhile, demand in the paint industry remains stable. Dealers across regions indicated that overall demand is witnessing value growth in mid-single digits. The report also highlighted that sales in the economy segment, including economy emulsions and distempers, are growing faster compared to premium and luxury paint products in most regions. (ANI)
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