Asian Paints Ltd., the largest paints company in India, has hiked its prices by 0.7-1% across portfolio, sources privy to the matter told CNBC-TV18 on Wednesday (July 10). There has been a price hike after nearly 12 to 15 months.

Besides Asian Paints, Berger Paints also confirmed to CNBC-TV18 that there has been a price hike of 0.7-1% announced with effect from July 22.

Paint companies usually increase prices to offset the impact of rising inputs costs because of input cost inflation.

Remember, over the past year, we have seen a decline in crude and input prices, leading paint companies to slash prices to boost demand. This resulted in a significant disparity between value growth and volume growth for these companies.

The recent price hike should be viewed as one of many, as paint companies often increase prices ahead of the festive season. However, this time, the hike occurred just before the monsoon season.

After 12 to 18 months of price reductions, companies are now implementing price increases. Typically, as the industry leader, Asian Paints sets the trend that other companies follow.

Asian Paints saw a volume growth of 10% for its decorative business in the March quarter. Its net profit for the quarter stood at ₹1,275 crore, while revenue came in at ₹8,731 crore.

The paints major had attributed the decline in revenue to weak demand conditions and downtrading seen in the premium segment. Downtrading essentially refers to a customer switching from expensive to more cheaper alternatives.

However, MD and CEO Amit Syngle said that the company is confident of a pick up in demand conditions with a favourable monsoon forecast.

Asian Paints in its March quarter earnings announced said that it had slashed prices by 3.7%.

Shares of Asian Paints Ltd. were trading 1.40% higher at ₹2,945.75 apiece, while, the Berger Paints stock rose 3% to trade at ₹529.55 on the NSE during today’s afternoon deals.