All's not well for paint companies: Partial price hikes won't be enough

With the crude oil prices moving up and rupee falling further, the key worry is the ability of paint companies to pass on the costs without impacting volumes and market share

Paint stocks were down 2-3 per cent each on worries that higher raw material costs and partial price increases will weigh on their margins. The rupee hit a new low against the dollar at 73 and crude oil prices were at a four-year high of $85.35 a barrel.

The pressure points for paint companies is crude derivatives and higher prices of titanium dioxide (TiO2). Most Indian paint companies import TiO2, which accounts for 25 per cent of raw material costs. “High inflationary pressure would take a toll on the companies’ profitability in the near term. However, many companies have taken a