Shares of paint-making companies soared by over 8% in morning trade on the BSE today amid media reports of a hike in prices of decorative paints this financial year.
Shalimar Paints zoomed up by 8.49% to touch an early peak of Rs 268.90 on the Bombay Stock Exchange (BSE).
Shares of other major paint companies also rose in anticipation of a price hike. Berger Paints India spurted by 7%, while Akzo Nobel India rose by 1.22%, Kansai Nerolac Paints by 1.97% and Asian Paints by 2.34%.
According to media reports, the planned 1-2% hike will take the overall rise in decorative paint prices this financial year to 12%, with four revisions already effected by the companies this financial year.
The reports further said that 70% 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% in the last one year, it said.
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, it added.
Meanwhile, the BSE benchmark Sensex was quoting higher by 112.40 points at 18,602.16 at 1040 hrs.
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