Stocks

Paint scrips soar on price hike reports

PTI Mumbai | Updated on March 04, 2011

Shares of paint-making companies soared by over 8 per cent in the morning trade on the BSE today amid media reports of a hike in the prices of decorative paints this financial year.

Shalimar Paints zoomed up by 8.49 per cent to touch an early peak of Rs 268.90 on the Bombay Stock Exchange.

Shares of other major paint companies also rose in anticipation of a price hike. Berger Paints India spurted by 7 per cent, while Akzo Nobel India rose 1.22 per cent, Kansai Nerolac Paints 1.97 per cent and Asian Paints 2.34 per cent.

According to media reports, the planned 1-2 per cent hike will take the overall rise in decorative paint prices this financial year to 12 per cent, with four revisions already effected by the companies this financial year.

The reports further said that 70 per cent of the Rs 17,000-crore Indian paints market is made up of decorative paints.

Key inputs that go into the making of paints include titanium dioxide and vegetable oils, which have reportedly become costlier by 10-12 per cent in the last one year.

The impact of input cost pressure is being felt in both the decorative and industrial paint segments, but it is difficult for industrial paint makers to effect a price hike because of long-term contracts they get into with customers.

The case is not so with decorative paints. The decorative paint market addresses household and architectural requirements.

Published on March 04, 2011

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