Asian Paints and other paint companies are making growth in their share prices and overall business. The market is going to have an increase in profitability as the crude oil falls. How can a fall in crude prices impact the paint industry? Let us decode below. We all know that oil prices are falling over time. It is at its lowest point at the moment. The paint industry’s raw materials are now available at a cheaper price which is a positive indication of the company’s growth.
How Will Fall In Crude Oil Prices Impact The Paint Industry?
The fall in crude oil prices seems to have a positive impact on the paint industry. As the hydrocarbon prices fall, the Indian paint industry is getting benefitted. The companies had a rise in their share prices on 11 September 2024. There was a sudden jump in the share prices on that day. However, the prices fell later in the week. Crude Oil prices are below $70 per barrel. As the prices fall for crude oil, the prices of petrochemicals also fall. It is a substance that is extracted from the crude oil. While the prices for other ingredients like solvents, resins, and additives also fall.
Thus, the product’s manufacturing cost is reduced. It automatically increases the company’s profits. The industry faced losses and a huge fall at the beginning of the summer of 2024. Several reasons impacted the growth of the paint industry. It includes the Lok Sabha elections at the beginning of the year. Later, summer’s heatwaves also impacted the industry’s growth. While monsoons were another big reason. However, the industry projects growth in the upcoming quarter due to the festive season and fall in crude oil prices. Thus, the investors have a high chance of profitability.
The companies that have high expectations of gains are Asian Paints, Berger Paints, Shalimar Paints, Nerolac Paints, and Indigo Paints. The paint industry is competitive. It recently added a new big competitor Birla Opus performing well in the market. If we talk about the monthly growth of the company’s share, Asian Paints has grown more than 5%.
Shalimar Paints grew more than 1.80%, Nerolac paints had a growth of 0.55%, and Indigo paints grew 0.05%. Apart from the paint industry, the fall in crude oil prices is also sparking hope among the people for petrol and diesel price cuts in India. However, the rest is yet unsure. We hope you get enough details about the impact of the fall in crude oil prices.