Paint stocks tumble 5% after crude oil prices rally as US-Iran war escalates

Shares of leading paint companies in India will be in focus on Monday morning after crude oil prices opened over 10% higher as the situation in the Strait of Hormuz remains volatile.

Asian Paints' share price opened 3.2% lower at ₹2,300 apiece on the NSE. Berger Paints' share price tumbled 5.4% at ₹431 apiece, Indigo Paints' share price fell 4.7% at ₹892 apiece, and Grasim shares opened 2.5% lower at ₹2,729 apiece on the NSE.

Certain media reports claim the activity in the Strait of Hormuz remains unaffected despite the escalated situation. Nearly 25% of the oil trade happens through the Strait of Hormuz, which is now the centre stage of the crisis in the Middle East.

The Brent crude oil prices opened at $81.5 per barrel, but later gave up the majority of the losses to trade only 4.8% higher at $76 per barrel. Similarly, the WTI crude oil prices opened at the $75 per barrel mark on Monday morning, but later gave up the majority of the gains to trade 3.5% higher at $69 per barrel at 8:30 am. The sharp spike in crude oil prices is expected to show a knee-jerk reaction on all the crude oil price-sensitive stocks across different sectors.

Paint stocks like Asian Paints, Berger Paints, Indigo Paints, Kansai Nerolac and Grasim will remain in focus as they use crude oil derivatives as key raw material for manufacturing paint and paint products.

Oil price hike impact on paint companies

Crude oil derivatives form 55% of the raw materials for the paint companies, which include solvents, resins and binders. Hence, a sustained hike in crude oil prices globally leads to 0.4% to 0.5% impact on the gross margins and 0.2% to 0.3% on the EBITDA margins.Crude oil derivatives form 55% of the raw materials for the paint companies, which include solvents, resins and binders. Hence, a sustained hike in crude oil prices globally leads to 0.4% to 0.5% impact on the gross margins and 0.2% to 0.3% on the EBITDA margins. In Q3FY26, paint companies posted a steady margin expansion across the board led by pricing changes, improved product mix despite muted revenue growth.