Akzo Nobel India Mulls another Round of Price Hike

Paint maker Akzo Nobel India anticipates commodity price stabilisation primarily crude driven derivatives around the first quarter of next fiscal. With the quarter-on-quarter increase in commodity costs continuing, the company is mulling yet another round of price hike, mainly across decorative paints, in December. Akzo Nobel India, the makers of ‘Dulux’ paints which is positioned in the mid to premium-end, has already initiated a near 18 per cent price hike that played out primarily across second quarter and into third quarter of this fiscal. The company took the lead in price hikes, unlike in the past when market leaders signalled increases and others followed. According to Rajiv Rajgopal, Managing Director, Akzo Nobel India, despite the hike the company sustained double digit value and volume growth in the second quarter and protected margins – 10.1 per cent EBIT margins and gross margins at 40.2 per cent. “Raw material price volatility will continue into the first quarter of the next fiscal. So another two to three quarters before there is some stability,” Rajgopal added. On the chip shortage front, the company is expecting the situation to improve December onwards. . According to Rajgopal, there will be some resistance in the market over repeated price hikes. However, factors like improving demand with commercial properties and offices re-opening, increase in real estate / housing sales, and tourism picking-up (leading to restoration and renovation work in hotel) continue to be positive triggers.