Paint Industry Reels Under Crushing Crude Price Spike

The paint industry is facing a significant challenge as crude oil prices have surged by 70% so far in 2026, reaching near $98/barrel. This has led to a sharp increase in production costs for leading companies such as Asian Paints and Berger, making it difficult for them to maintain their profit margins.

Absishek Mathur, an analyst at Systematix Shares and Stocks (India), expects the gross margin of Asian Paints to contract by 400 basis points sequentially and 370 basis points year-over-year in Q2FY27. Berger Paints India may see a 120 basis point sequential and 190 basis point year-over-year gross margin dip in Q2FY27.

The aggressive challengers, Birla Opus and JSW Dulux, are expected to gain market share by offering higher discounts and incentives to dealers and painters. This will make it even more challenging for incumbent paint makers to maintain their margins.