Berger monitors cost, demand closely before taking price hike call

Berger Paints India Ltd on Tuesday said it was monitoring the cost pressure in the wake of crude price hardening but will take a call after tracking the demand scenario.

With crude oil trading above USD 100 per barrel owing to Russia's invasion of Ukraine, cost pressure will mount if the geopolitical uncertainties continue for a few months.

"We are monitoring the situation closely but not raising the price in a haste. We will take a call after monitoring the demand scenario also. Price rise impacts volume demand," Berger Paints MD & CEO, Abhijit Roy, told PTI.

Berger had hiked prices in the last one year to offset input cost inflation, the company said.

Roy explained that out of the four major ingredients of making paints, one is linked to crude.

It is the solvent binder, which is a derivative of crude. However, its price is more affected by demand-supply issues than the price of crude itself, he said.

Overall, solvent binder forms about one-third of Berger's raw material basket.

"The demand for paints remains normal but may not exhibit a high growth if compared with the figure of last year which saw disruptions," Roy said.

In the nine months till December 2021, Berger earned a revenue of Rs 6600 crore.

Meanwhile, Berger's decorative paints factory in Russia remains functioning normally.

The size of the operation is very small and annual revenue still hover around just Rs 10 crore. The greater concern is the spiralling crude price which affects the input cost, Roy said.