Asian Paints’ Syngle Says Pace Of Price Hikes Will Increase In Q3
“The pace of price hikes will go up based on what we see in Q3,” said Syngle.
Asian Paints Ltd. expects the pace of price hikes to increase in the ongoing October-December quarter as it looks to offset rising input costs.
"We have never seen this kind of inflationary pressure in the last 40 years. Coupled with that, the issues surrounding raw material procurement and the higher freight costs have been unprecedented," Amit Syngle, managing director and chief executive officer at India's largest paintmaker, told BloombergQuint’s Niraj Shah, in an interview.
The overall inflation has increased every quarter, according to Syngle. "We saw almost a 15% increase in inflation from Q4 FY21 into Q1 FY22. We’ve seen another 6-7% increase when we walked into Q2 and we have seen a further increase of about 3% so far in Q3," he said.
Asian Paints, which has hiked prices overall by around 7.5% in the June and September quarters, expects the impact of such measures to vary across its product portfolio.
The effect is largely more on the economy side because the elasticity of demand is more sensitive as compared to the premium and luxury products.Amit Syngle, CEO, Asian Paints
India's largest paintmaker's September-quarter earnings missed estimates on account of higher input costs even as demand rose. Volume rose 34% led by tier 1 and tier 2 centres and value increased 35%. Volume and value growth have been much closer because the firm focused more on the premium and luxury range, Syngle said.
Other highlights from the interview:
Measures to improve formulation efficiency, and innovative raw material sourcing strategies, helped reduce the input cost pressures.
Consumer sentiment has improved around the festive season as the fear of a third Covid wave reduces and a strong monsoon supports the rural economy.
Confident of a double-digit volume growth in the coming quarters, even though it might not be as high as seen in Q2.