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Asian Paints and Berger Paints announce a 0.7-1% price hike effective July 22. This marks the first increase after 12-15 months of price reductions. The primary reason for the price hike is to offset the rising input costs.
Asian Paints Ltd., India's largest paint company, and Berger Paints have announced a price increase of 0.7-1% across their portfolios. The price hike is set to take effect from July 22, marking the first such increase in 12-15 months.
Explore: ASIAN PAINTS LIMITED
The primary reason for the price hike is to offset the rising input costs. Paint companies typically adjust prices in response to input cost inflation. Over the past year, declining crude and input prices led to price reductions to boost demand, resulting in a significant disparity between value and volume growth for these companies.
Additional Read: Asian Paints Ltd. – An In-Depth Analysis
Usually, price hikes in the paint industry occur before the festive season. However, this increase is happening just before the monsoon season. The hike comes after 12-18 months of price reductions, with Asian Paints, as the industry leader, setting the trend for other companies.
Asian Paints reported a 10% volume growth in its decorative business for the March quarter. Despite this growth, the company's net profit stood at ₹1,275 crore, with revenue at ₹8,731 crore, slightly down from ₹8,787 crore in the same quarter last year.
The decline in revenue was attributed to weak demand conditions and downtrading in the premium segment, where customers switched to cheaper alternatives. However, the company remains optimistic about a demand pickup, supported by a favourable monsoon forecast.
Berger Paints also reported strong financial performance in Q4 FY24, with sales crossing ₹10,000 crore and profits exceeding ₹1,000 crore. The company's sales volume grew by double digits, and operating profit increased by nearly 24%.
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