HomeBrand UpdatesAsian Paints may hike price in December

Asian Paints may hike price in December

If feedback from paint dealers is any indication, there may be another price hike by the market leader, that is, Asian Paints in the beginning of next month. The hike may be in the region of 4-5% and may  be across all product categories. The company had effected a price hike of 9% in November and before that the company had raised price by 6%.

It’s the usual practice in the industry for other paint manufacturers to follow the leader and therefore, similar action can be expected from rest of the industry. However, some dealers are slightly apprehensive about the impact of the price hike on demand, especially at the lower end of the market. However, the paint manufacturers may offer higher rebates to the dealers to lessen the adverse impact on volume growth.

It should be noted that in India repainting cycle is about 4-5 years and paint costs about the 40% of the total cost, rest being labour charges. A steep hike in the price of the material may force the consumer to postpone the painting till the material prices stabilise. It should be noted that if the December price hike comes through, it would amount to about 20% price hike on year on year basis which can be considered steep.

Proposed price hike comes on the back of steep margin decline for Asian Paints in the second quarter. Asian Paints’ margin had declined by huge 10% and the proposed price hike may be to protect its margin in the coming quarters.

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