ISRAEL-IRAN WAR ESCALATION RESULTED IN 12% JUMP IN THE BRENT CRUDE PRICES
News: Israel-Iran war escalation resulted in 12% jump in the brent crude prices which is hovering around $76-77 per barrel.
View: Any further rise in the brent crude prices will be negative for paint companies (including Asian Paints). Crude derivatives form 25-30% of input cost of paint companies. This along with ongoing competitive intensity in the decorative paints segment will continue to put pressure on the margins of paint companies. Asian Paints EBIDTA margins are currently trading at lower margin band of 17-18%. If crude prices continue to remain high, we should expect Asian Paints EBIDTA margins to remain at lower band in the near term.
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