As fourth quarter results came in, companies in different sectors noted that they made price increases to combat rising input costs. Various companies reported this during investor and earnings calls.
Maruti Suzuki: Maruti said that it saw an improvement in sequential margin due to the impact of price increase (up 0.7% QoQ), lower discounts and higher scale.
TVS Motors: TVSL took a price increase of 0.4% in Q4FY19.
Bajaj Consumer Care: In its earnings call, the company said it had done two price increases last year, in April and in August. This year the company has pushed a price increase of around 3.7% in April 2019. The new MRP hit the market during that month, and the company said that this is expected to protect its gross margins.
ITC: Post 2 years of stable pricing, ITC has recently hiked prices of select cigarette brands in March 2019.
Asian Paints: Recent price increases in Oct 2018 and Dec 2018. The company expects margin expansion from these.
Cummins India: The company pushed a price increase in Q3FY19, the full impact of which is expected to be visible from Q4FY19.
Godrej Agrovet is on the other hand, facing challenges in pushing price increases to compensate for rising input costs. Feed cost accounts for 60-70% of the total cost for the farmer, making it difficult for the firm to pass on the price increase in raw materials.
Hindustan Unilever: Price increases for Skin care and Face wash products to maintain margins.
Kansai Nerolac: Gross margin may decline on higher input costs, INR depreciation and lag in pushing out price increases in Industrial paints.
Reliance Industries: Reliance noted that within its petrochem business, polyester markets remained volatile during FY19. PFY price increased 11% YoY, however margins dropped 7% to $ 262/MT. This was because the Chinese ban on imports of post-consumer PET effective 1st Jan 2019 was later relaxed leading to the revival of recycling industry, and limiting the uptrend in virgin PSF prices.
The company said that Asian Naphtha prices increased 16% YoY due to higher crude prices and demand from petrochemicals. Ethylene prices weakened 2% in FY19 YoY due to supply from new crackers in US. Propylene prices in Asia increased by 14% during the year.
Elantas Beck: The company's Electronics and Construction Chemicals segments witnessed a rise in raw materials costs, which have impacted prices considerably and this business registered a drop of 2.5% in revenues in 2018. The company is passing on the price increase to customers.
Mahindra CIE Automotive noted that it may face a potential inability to pass on rising input prices to customers, since the auto industry is already under significant cost pressures.
United Spirits: The firm is expecting a potential price increase for its products in Karnataka (30-35% of UNSP’s volumes) which could be positive for the company.
Gulf Oil Lubricants: The company says its expecting outlook to be strong on crude price rise and price increases. However, crude prices have softened in recent weeks.
Ultratech Cement: pushed a price increase in central states in India.
Pharma: Of the 9.9% growth in domestic formulations in the industry, ICICI Research estimates 5% is from price increases.
