Shares of Asian Paints Ltd, Berger Paints India Ltd and Kansai Nerolac Paints Ltd rallied 3-5% on Wednesday as crude oil prices eased. Following the news of a two-week ceasefire in the West Asia war, Brent crude slipped to around $93 a barrel from a closing high of $107.9 a barrel on 18 March.
Crude derivatives such as solvents, resins and binders comprise around 40% of the raw material basket for paint companies, so higher oil prices weigh on gross margins. To counter inflation in crude-oil-linked input costs, listed paintmakers recently undertook calibrated price increases.
Decorative paints giant Asian Paints announced a 6-8% price increase in two phases. In the first phase, prices in key decorative categories of emulsions, enamels, primers, and distempers, will increase from 10 April, showed a dealers’ channel check by Motilal Oswal Financial Services. The second phase will begin from 21 April, covering waterproofing, adhesives, and wood finishes.
Close rival Berger Paints India has implemented its first phase, hiking prices by almost 3% from 25 March, and will increase prices another 5-10% from 9 April, said the Motilal report on 2 April. Indigo Paints and Kansai Nerolac have also hiked prices to various degrees.
Paint companies have also reduced the trade schemes and discounts they give dealers on the listed price of a product to encourage bulk buying. Benign costs and increased competitive intensity over the past two to three years had led to a massive increase in trade schemes.
The benefit of price increases on margins and realizations should reflect in the June quarter (Q1FY27). But this may not be enough to rekindle investor confidence. Brent crude is still elevated compared to $71.74 a barrel on 26 February, before the war broke out. “Even if the Middle East crisis is resolved in the next two to three months, supply-chain impacts may persist through H1FY27,” ICICI Securities said in a 3 April report. It expects paint companies to lower volume growth guidance due to these hikes and their potential impact on demand for projects and industrial coatings.
Conversely, revenue growth guidance may be revised upward. Asian Paints guided for 9-10% volume growth and 5-6% revenue growth over the medium term, with Ebitda margin guidance of 18-20%. Berger projects 12-13% volume growth, 7-8% value growth, and an Ebitda margin of 15-17%. Kansai has guided for an Ebitda margin of 12-13%.
The demand scenario remains precarious and a new threat may be emerging. Weather forecasting agency Skymet has predicted below-normal monsoon rainfall this year amid a risk of El Niño. This is a dampener for rural consumption as farm output could be adversely affected. If this plays out, it exposes paint stocks to de-rating risks, given their exposure to rural India. In its Q3FY26 earnings call, Asian Paints management had said rural demand outperformed urban, supported by good monsoons and improved sentiment.
Meanwhile, channel restocking by dealers in March, ahead of price hikes, should buoy Q4FY26 performance to some extent. Paint companies typically maintain 30-45 days of raw material and finished goods inventory, which cushions the immediate impact of rising input costs, said Nuvama Research. It therefore expects margin impact to be limited in Q4FY26, with Berger and Asian Paints likely to report 9-10% volume growth.
Asian Paints and Berger shares are both down 17% so far in 2026, and trade at 40 and 36 times estimated FY28 earnings, respectively, based on Bloomberg data. With significant growth levers still missing, these valuations are unattractive.
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.<br><br>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.<br><br>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.<br><br>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.<br><br>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.