loader2
Login Open ICICI 3-in-1 Account
  • Text Size
  • Text to Speech
  • Color Contrast
  • Pause Animations

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

Brent crude rally to impede recovery for input and inflation sensitive sectors

ICICIdirect Research 11 Sep 2026 DISCLAIMER

Brent crude prices surged more than 30% to $105 per barrel amid continued tensions in west Asian. This is going to impede recovery in certain segments such as paints, FMCG, Auto & interest rate sensitives

  • Impact on Paint and FMCG companies: Crude and Crude-linked derivatives are key inputs for paints, constituting around 20–25% of overall input costs for paint companies and 10–15% for FMCG companies. Paint companies have taken price hike of 13-14% to mitigate the impact of higher crude prices. However, these price hikes will not suffice to mitigate full impact of spike in crude prices. Hence, we believe higher crude prices along with inflation in the other commodity prices will impact margins in Q2FY27 and Q3FY27.
  • Impact on real estate sector: The real estate sector saw sharp correction on Friday Realty index fell 4.5 %, Lodha Developers and Godrej Properties were the top laggards falling ~7% each, followed by DLF, Oberoi Realty, ABREAL which fell 4-5% each). The real estate sector being highly sensitive to rising inflation and interest rates is expected to witness demand deferment amid rising bond yields and interest rates. Additionally, construction costs have increased almost 10-15% since the middle east war began, remain a key hangover on margins for the sector.
  • Impact on auto/tyre sector: Rise in Crude prices is sentimentally negative for domestic tyre players as they use crude derivatives (Carbon Black, Synthetic Rubber among others) as their major raw materials. In Q1FY27, Tyre space saw RM led gross margin decline of ~500-600 bps amidst rise in Natural rubber prices. Currently Natural rubber trades at ₹275/kg, up from its pre-war levels of ₹180-200/kg. Players had already guided for 8-10% increase in commodity pressure in Q2 for which price hikes are underway.

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere