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Companies are resorting to staggered price hikes to combat rising input cost inflation and protect margins. The impact of these increases is likely to reflect in June quarter (Q1FY27) earnings, but further hikes cannot be ruled out—especially if crude oil prices remain elevated.
The West Asia war has triggered a spike in crude oil prices and LPG shortages. Given the strong linkage of crude derivatives to packaging, logistics, raw materials and supply chains, multiple sectors are feeling the heat.
Cement is among the first to respond.
Average pan-India cement prices have edged up by ₹10–12 per bag so far in April, showed dealer channel checks by Emkay Global Financial Services. The cost of procuring key fuels—imported petroleum coke, coal—and packaging material remains elevated. A potential diesel price hike from May (post state elections) could further raise freight costs.
While price increases can improve realizations, sustaining them hinges on demand.
“Besides the usual slackness observed in the first week of April (due to higher channel inventory owing to sales push in the last week of March), demand momentum remains upbeat, particularly in the non-trade segment,” said the Emkay report dated 20 April.
Decorative paints major Asian Paints has announced a second round of price hikes of 3–5% effective 5 May, taking cumulative increases to high-single-digits to double-digits, according to Nomura Global Markets Research.
Peers Berger Paints India and Kansai Nerolac Paints are likely to follow with another round after announcing their first hikes in March.
“Our calculations indicate that the raw material basket for paint companies witnessed inflation of around 22%/14% month-on-month in March/April which will be consumed over Q1/Q2,” added the Nomura report dated 19 April.
Crude derivatives such as solvents, resins and binders account for about 40% of the raw material basket for paint companies.
In the home décor sector, tile makers have also announced average price hikes of 10-12%.
For FMCG companies, the pressure is more indirect. While crude oil does not directly drive core inputs, it influences packaging materials such as PTE and HDPE.
Passing on costs is tricky in the mass segment, where consumers are highly price-sensitive. Full pass-through risks downtrading, forcing companies to adopt calibrated hikes and shrinkflation strategies.
Broker reports indicate that industry bellwether Hindustan Unilever has raised soap prices by 5–10% amid rising palm oil prices, with further hikes expected in detergents and face washes.
The broader concern is that retail inflation is beginning to rise, while the second-order effects of the war remain uncertain. A sub-normal monsoon poses another risk, potentially hurting rural incomes and consumption.
This makes the margin-volume trade-off more complex. While price hikes may support margins and topline growth in the near term, volumes could moderate as affordability weakens.
If crude prices remain elevated and the rupee stays weak, cost inflation could turn sticky, clouding the earnings outlook for corporate India.
Historically, during oil price spikes (2008, 2011, 2022), consumer staples emerged as relative outperformers with smaller earnings cuts, noted BNP Paribas Securities India.
This time, however, the sector has already seen a sharp valuation de-rating. BNP has lowered its FY27 and FY28 earnings estimates for all consumer companies under coverage, bringing its growth forecast below consensus.
Harsha Jethmalani is a Deputy Editor at Mint with over a decade of experience covering stock markets and corporate India. As a key member of the Mark to Market team, she specializes in delivering cutting-edge commentary on market trends, the economy, and corporate financial reports.Born and raised in Mumbai, Harsha’s entry into business journalism was a serendipitous pivot. Graduating during the 2008–2009 financial crisis, her initial goal of becoming a research analyst at an MNC was rerouted. However, what began as a chance career move quickly became a conscious choice; she discovered that financial journalism is a powerful storytelling tool capable of influencing and empowering the financial decisions of a massive audience.Harsha began her career in 2009 at IRIS Business Services (Myiris.com), tracking mutual funds and interviewing fund managers. In 2011, she joined the Network18 Group, writing extensively on equity market trends for Moneycontrol.com and hosting pre- and post-market audio updates. Following a stint covering personal finance at Dalal Times, she joined Mint in 2016 as a Content Producer, steadily rising through the ranks to her current editorial position.A defining highlight of her tenure at Mint was her extensive coverage of India's historic Goods and Services Tax (GST) reform. She chronicled the massive indirect tax overhaul from its initial conceptual and execution hurdles to its eventual streamlining. Her impactful reporting earned official recognition when her article exposing a spike in gold smuggling ahead of the GST rollout was formally acknowledged by the Office of the Director General of Audit (Central), Kolkata. Currently, Harsha closely tracks the IT, cement, real estate, and paint sectors. Her sharp news sense and ability to spot emerging trends consistently bring fresh, actionable perspectives to market analysis.She holds a postgraduate degree in financial markets from Indira Gandhi National Open University and a Bachelor of Management Studies from Vivekanand Education Society, Chembur, Mumbai.