Asian Paints treads carefully on price hikes as raw material costs squeeze margins
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Asian Paints faces a tough choice as rising raw material costs squeeze profit margins.
- ✓Managing director Amit Syngle said, “I don't think so it's reasonable to kind of look at passing the entire impact.” The company got a 7.5% profit rise in the quarter ended 30 September, but results fell short.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Livemint
- Reading Speed
- 5 Minute(s)
- Market Focus
- India Economy
MUMBAI: Asian Paints Ltd faces a delicate pricing decision as raw material inflation eats into profitability: raise prices too aggressively and households could put off painting or switch to cheaper products; absorb too much of the increase and margins will come under further pressure.
The country’s largest paint maker is wary of passing on the full increase in input costs to consumers, managing director and chief executive Amit Syngle said.
Painting is a discretionary household expense, making demand particularly sensitive to price increases. Consumers could postpone maintenance and repainting or trade down to lower-priced products if inflation crosses a certain threshold, Syngle told analysts in a post-earnings interaction on Thursday.
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