From toothpaste to paint will get expensive before festivals:8 companies including HUL and Asian Paints will increase prices of essential goods

The country’s largest FMCG and consumer companies are preparing to increase the prices of their products just before the festive season and for the second consecutive quarter. Items ranging from toothpaste to tires and paints are going to become more expensive. Rising commodity costs due to the ongoing conflict in the Middle East are likely to keep inflation at a high level in the country for a long time. Hindustan Unilever Limited (HUL) will increase prices in categories like detergents and dishwashing bars in the coming quarter. Apart from HUL, at least 7 other companies, including Dodla Dairy and Asian Paints, have also planned to increase prices. HUL CFO says – increasing prices in home care segment Niranjan Gupta, Chief Financial Officer of Hindustan Unilever, India’s largest consumer goods company, told analysts that due to external fluctuations, inflation is being seen in crude oil-related derivatives. For this reason, the company is thoughtfully increasing prices in the home care segment. Havells increased prices by 8% and Tata Salt by up to 7% Due to the Iran war, energy prices remain consistently high, with no immediate relief in sight. With tensions between the US and Iran flaring up again, companies are planning to raise prices for the second time on everything from home appliances to essential kitchen items. Festive Season Between August and November, One-Third of Sales During This Period This latest price hike coincides with the upcoming festive season. This festive season in the country typically runs from August to November. During this period, especially around Diwali, consumer spending, or general public’s shopping, sees a significant surge. For many companies, one-third (33%) of the total annual sales come from this season. Due to strong demand, companies will easily be able to pass on their increased cost burden to customers. Inflation rose above 3.21% in June; RBI’s FY27 estimate is 5.1% In June, due to rising food and fuel costs, the Consumer Price Index, or retail inflation rate, exceeded the Reserve Bank of India’s (RBI) 4% target for the first time in almost a year. However, this figure is within the RBI’s tolerable range, or tolerance band, of 2% to 6%. In the coming months, inflation pressure may further increase due to price hikes by companies and rising food prices due to a weak monsoon. The RBI estimates that the average inflation rate for the financial year ending March 2027 could be 5.1%. RBI’s MPC Meeting on August 3-5, Interest Rates Expected to Remain Stable Nomura and Experts Said: Raising Prices is a Compulsion Due to Rising Costs Sonal Varma, Nomura Holdings’ Chief Economist for Asia (excluding Japan), says that given the immense pressure on input costs and companies’ margins, passing on the burden of increased prices to customers is inevitable (unavoidable). Meanwhile, Ravikant Jaipuria, Chairman of Devyani International (which operates KFC and Pizza Hut), said that although demand has remained stable so far, the forecast of a below-normal monsoon and the risk of ‘El Nio’ serve as a reminder that consumption recovery in India never follows a straight line. Strong demand in rural and urban areas, retail sales up 6% in June According to company comments, demand has remained stable in both rural and urban India so far. What are ‘El Niño’ and ‘Input Cost’? El Niño: It is a geographical phenomenon characterized by abnormal warming of ocean water in the tropical Pacific Ocean. Due to this, monsoon winds in India weaken, leading to a risk of drought or less rainfall. Reduced rainfall decreases crop production and makes food items expensive. Input Cost: The total cost of raw materials, fuel, transportation, and labor involved in preparing or manufacturing any product is called input cost. When this cost increases, companies have to raise the prices of the final product to protect their profit margins.