Indigo Paints says demand unaffected by price increase; further hike unlikely as of now

“So, now we are reasonably comfortable as far as margins are concerned, having done these price hikes,” Jalan added.

When asked if smaller players would witness demand pressure due to these aggressive price hikes, Jalan said, “I don't think we have seen any problems as far as demand is concerned. As far as passing on the prices to the customer is concerned, it works in exactly the same way as it does for a market leader as it does for a smaller player like us. I don't think that has ever been a problem, it is not that our products sell to the customer at a price lower than the market leader. In fact, sometimes it may be the other way around. So, I don't think that there is too much elasticity of demand with respect to price.”

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Having said that, there is a thin line that one should not cross, and also one should not take the consumer for granted and go with repeated price hikes at very short intervals. Therefore, we are not necessarily looking at an immediate second round of price increase in the next month, he added.

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“We are keeping our options open, watching the trend of raw materials, there seems to be some stability in sight as far as the raw materials are concerned albeit at an elevated level. A couple of materials continue to spiral upwards but at this point in time, we are not very sure as to whether another price hike in two to three weeks is the answer to the problem,” he explained.