Mulling price hike of 3-5% in September: Shalimar Paints

Written By Unknown on Rabu, 04 September 2013 | 23.25

The raw material that goes into paints and coatings have petroleum derivatives, and a lot of it is imported, and hence the rupee fall has had an impact, says Sameer Nagpal, MD & CEO, Shalimar Paints .

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Despite that, it is a little difficult to estimate by how much costs have gone up since rupee has been fluctuating a lot, he says. He also adds, some of the imports are slightly long-term hedged at better rupee/dollar rates. However, he adds, there is another component which goes into intermediary raw materials that are locally made, but have components of import. So a bit of cost increases has happened, he says.

The company raised prices of certain products by 2-3 percent last month, which have heavy petroleum derivatives as input costs. It plans to hike prices by 3-5 percent in another segment of products this month, he adds.

Below is the verbatim transcript of Sameer Nagpal's interview on CNBC-TV18

Q: I want to understand the kind of sensitivity you have to rupee depreciation because I am assuming your cost would be related to crude derivatives?

A: That is true. So a lot of raw materials which go into paint and coatings have petroleum derivatives and there are a lot of imports. So there is a correlation between the input cost and the rupee value.

Q: Since the end of May ever since we have started seeing rupee depreciation, how much have your costs gone up by and how much has Shalimar Paints increased their product prices by?

A: The rupee has been fluctuating and so it is difficult to estimate how much exactly the costs have gone up by because some of our imports are slightly long-term hedged. However, we have a fair bit of hedging at better rupee/dollar rates. There is another component which goes into intermediary raw materials which are locally made but have components of import. So a bit of cost increases has happened.

In terms of price increase, we have had a round of price increase in the last month on certain set of products which have heavy petroleum derivative as input cost, which was between 2 percent and 3 percent and we are having another round of price increase this month roughly between 3-5 percent on another segment of product.

Q: With the price hikes that you took for the previous products and the ones that you will take for this 3-5 percent, will it cover the entire gambit of products that you have or do we still have more price hikes on the anvil?

A: For Shalimar as of now it will cover us for the cost increases but as the environment is volatile and fluctuations are there, we cannot say how they are going to be going forward.



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