Financial Daily from THE HINDU group of publications
Saturday, Oct 01, 2005
Financial Daily from THE HINDU group of publications Saturday, Oct 01, 2005 |
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Industry & Economy
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Paints Paint companies likely to hike prices post-festive season Neha Kaushik
New Delhi , Sept. 30 WITH crude oil prices showing no signs of receding, paint companies are likely to go in for a price hike after the festive season. Mr Subir Bose, Managing Director, Berger Paints, said that the company would increase prices by about three to four per cent post-festive season. This would amount to a price hike of about Rs 6-7 per litre. "The paints industry has been feeling the heat of rising input costs, mainly that of crude. We won't tinker with the prices this season, but definitely after the season is over, there's likely to be an increase of about 3-4 per cent,'' Mr Bose said. Berger had earlier increased prices by five per cent in November last. Meanwhile, the CFO of ICI Paints, Mr Rajaram, said that though currently there are no definite plans to increases prices, the cost pressure does justify a correction. "The cost inflation justifies a price correction. The quantum depends on how the festive season goes," he said. Industry analysts point out that the margins of the domestic paint industry remained under pressure in the first quarter of the fiscal. In fact, due to the increase in crude prices and its resultant impact on the prices of petrochemicals, paint companies have been attempting to tackle an increasing input-cost scenario for the past eight quarters. In the first quarter of the current fiscal, four of the top five paint companies saw a jump in raw material costs as a percentage of sales compared to the corresponding period last year. The soaring raw material prices have impacted the smaller players more significantly. Analysts, however, said that a positive development for the paint industry is the revival seen in volume growth with sustained expansion in the real estate sector. A price hike effected by major paint manufacturers in the fourth quarter last fiscal, too, had helped in easing the pressure on margins.
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