Asian Paints on Tuesday confirmed it is taking a price hike of about 4 to 6 percent starting December 5. The paintmaker had earlier hiked the prices by 8-9 percent with effect from November 12. So far, it has taken a cumulative price hike of about 15-16 percent this year.
Following a weak second quarter, Asian Paints said high raw material inflation will push the pace of price hikes.
Asian Paints’ managing director and chief executive officer Amit Syngle had told CNBC-TV18 an inflation trend was seen across the set of raw materials that are critical to the entire paint industry.
“Overall, we have taken almost a 7.5 percent increase over quarter one and quarter two, which itself is fairly high. Given the gap between what the inflation is now, the pace of the price increases will have to go up to that extent. And even some of the quantum because this is something that we need to get into control fast, as an industry leader,” he had said after the second-quarter result.
Asian Paint’s stock rallied over 1 percent on the day the price hike was confirmed. At 12:55 pm, the shares of the paintmaker were trading 0.22 percent higher at Rs 3,175 on the BSE.
The stock has dipped nearly 2 percent over a period of one month.
Earlier in October, most analysts, positive on the price hikes, said the passing on of higher costs to the end consumer should help the paint companies counter recent inflation at least for now. But not many were bullish on the sector as a whole amid alarming valuations.
When Asian Paints had taken the last price hike, financial services firm Nomura had said the hike was larger than the cumulative increases in the past six months.