Paint companies in India may implement another round of price increases of around 6-8% in June- July if crude oil prices remain elevated, according to brokerage Systematix.

The brokerage said in a note that its channel checks in early March had already indicated initial price hikes of 2-5% in April, following a sharp 20% quarter-on-quarter rise in crude oil costs in Q4 FY26. Subsequently, most major paint manufacturers implemented price increases during March and April.

Asian Paints announced a 6-8% hike in two phases during April, while Berger Paints, JSW-Dulux, Kansai Nerolac and Indigo implemented similar increases of 6-8% spread across March and April. Birla Opus raised prices by a higher 8-10%, after earlier hikes of 2-4% in January.

Another round of hikes possible

According to Systematix, second round of price increases may be required if crude oil sustains at elevated levels. The brokerage highlighted that current pricing already factors in crude levels of around $75–80 per barrel, but recent spikes near $90 per barrel could lead to additional sequential inflation of about 20% in Q1 FY27, which remains unaddressed.

“The initial hikes cover crude oil inflation up to end Q4 26 (covering Brent crude at $75-80/bbl on average) – this inventory will be utilised in Q1 27, when the price hikes largely take effect (with a lag of a month or so),” the brokerage said in its report.

Titanium dioxide (TiO₂), another key input, has also turned inflationary, rising around 12% quarter-on-quarter in April so far, it said.

As per the report, based on dealer feedback, most channel partners remain cautious about further price hikes, as companies may want to avoid demand disruption and competitive pressure. However, they also noted that firms are unlikely to hesitate if input costs remain high.

Some dealers also indicated that pre-emptive inventory stocking in March ahead of price hikes may have supported volumes in Q4 FY26, though the impact of pricing actions on demand is expected to become clearer in the coming weeks, it added.

Asian Paints, Berger Paints margins seen down 50-100 bps QoQ in Q1 FY27

Systematix estimates that gross margins for Asian Paints and Berger Paints could decline by 50-100 basis points quarter-on-quarter in Q1 FY27 due to timing lags in price transmission. If no further hikes are taken, margins could face a sharper impact of 400–450 basis points in Q2 FY27.

However, the brokerage noted that past periods of sharp input inflation (such as in FY22 and FY23) were eventually offset by pricing actions, followed by margin recovery in subsequent quarters. It added that the industry currently has a relatively stronger pricing environment, with broader participation in price hikes and improving competitive balance as new entrant Birla Opus gains scale, now holding over 7% market share.

Systematix maintained that key variables to monitor include crude oil trends, volume impact from price hikes, and margin trajectory. While no changes were made to earnings estimates, it flagged further crude inflation without corresponding pricing action as a downside risk.

The brokerage maintained ‘BUY’ rating on Berger Paints with a target price of ₹570, citing consistent growth across decorative and industrial segments. It also retained BUY rating on Asian Paints with a target price of ₹3,160, while awaiting clearer signs of demand recovery and market share stability.

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