Crude oil volatility may push up paint prices in April

Paint companies like Asian Paints and Berger may hike prices by 2–5% in April if Brent crude remains volatile following the West Asia crisis.

Paint Prices May Rise in April as Crude Volatility Pressures Input Costs

Your favourite brand of paint may cost more if crude continues to nudge higher. The benchmark Brent crude has rallied nearly 36% in a month following the West Asia crisis which began with the attack on Iran on February 28. Since then, Brent crude touched nearly $120 a barrel on Monday before finally settling below $90 a barrel in the last two days. In the December quarter, crude was around $60 a barrel, according to experts.

Crude Derivatives

Volatility in crude has a straight impact on crude-linked derivatives used across industries. The paints industry for one uses titanium dioxide, solvents, binders and resins, all crude-linked derivatives, which constitute around 55-60% of their input costs.

Berger Paints MD & CEO Abhijit Roy said that most paint companies maintain raw material inventory of about a month. Finished goods inventory manufactured at previous prices are also maintained for about 30-45 days. “So, in the immediate term, there will not be a price hike since companies are sufficiently stocked for now. However, if the war drags on, then price hikes may have to be considered,” he said.

Inventory Buffers

Analysts at brokerage Systematix said that paint prices could rise by 2-5% in April, if the price of crude sustained at current levels. “Dealers anticipate price hikes if crude remains volatile. While companies have not indicated any price hikes so far and may wait until the end of March 2026 for crude to stabilise, the situation remains fluid,” analysts Abhishek Mathur and Rajat Parab from Systematix wrote in a research note released Wednesday.

In a recent call with analysts, Asian Paints MD & CEO Amit Syngle said that the company was keeping a close watch on titanium dioxide, a crude-linked derivative used in paints, in view of the heightened volatility in the Gulf region. “The whole price environment seems volatile today. With the current geopolitical situation, the crude impact could come in fast,” he said.

Analysts at brokerages Kotak Securities and Motilal Oswal indicate that if paint companies decide to hold price lines to ensure demand remains unaffected, then margins may take a hit in the April-June period of FY27.

“Every $1 increase in crude price impacts Ebitda margins of paint companies by 25 basis points, if price hikes are not considered,” Amit Agarwal, senior vice-president, fundamental research, Kotak Securities, said. One basis point is one-hundredth of a percentage point. Ebitda is earnings before interest tax depreciation and amortisation, which evaluates a company’s core operating profitability.