Asian Paints stock price is near its 52-week low. So is Indigo paints. As Brent crude price breached $ 90 price level, stock prices of paint companies fell heavily on April 12, 2024. The S&P BSE Sensex which crossed the 75,000 historic mark on April 9, 2024, lost two percentage points in the next four days mostly due to a surge in crude oil prices with the Middle East on the boil. Paint manufacturers use crude derivatives for manufacturing paints. Pentaerythritol, aromatics and phthalic anhydride to name a few significant crude derivatives used by paint companies. On the whole crude derivatives constitute nearly 30% of total raw material cost for paint companies.
All major paint players reported operating margin expansion in Q3FY24 . The impact of higher crude prices will be seen in Q1FY25. Brent crude price has increased from $ 73 in December 2023 to $89 in April 2024.
