HUL, Asian Paints, Others Plan Fresh Price Hikes Ahead Of Festive Season

India's biggest consumer companies are preparing to raise prices on everyday products, from toothpaste to tyres and paint, for the second consecutive quarter. The move comes ahead of the festival season and is being driven by rising commodity costs linked to the prolonged conflict in West Asia, according to a Bloomberg report.

Hindustan Unilever will raise prices in categories such as detergents and dishwashing bars over the coming quarter. At least seven other companies, including Dodla Dairy and Asian Paints, have also flagged similar plans in their post-earnings calls and media briefings, the report said.

"Given the external volatility, we continue to see inflation in crude-linked derivatives and are taking calibrated price increases across the segment," Hindustan Unilever Chief Financial Officer Niranjan Gupta told analysts this week, as per Bloomberg.

Hindustan Unilever's net profit fell 4% year-on-year (YoY) to ₹2,631 crore for the quarter ended June 30.

Havells India has already raised prices by as much as 8%, while salt from Tata Consumer Products has become around 7% costlier.

Inflation Pressures Building

Consumer prices in June rose above the Reserve Bank of India's 4% target for the first time in nearly a year and a half, pushed up by rising food and fuel costs. The reading stayed within the RBI's tolerance band of 2% to 6%, but price pressures are expected to build further as companies raise prices and a weak monsoon adds to the risk of higher food costs. The RBI expects inflation to average 5.1% in the fiscal year ending March 2027.

High energy costs following the Iran conflict mean quick relief is unlikely, the report said. With tensions between the US and Iran flaring up again, companies are preparing another round of price hikes across categories, including home appliances and kitchen staples, the report added.

Festive Season Demand In Focus

The price increases coincide with the festival season, which usually runs from August to November and includes Diwali, when consumer spending typically rises sharply. This period makes up nearly a third of annual sales for many companies, which could make it easier for them to pass on higher costs to consumers.

The price hikes will test both the strength of India's consumption demand and the response of policymakers monitoring inflation closely, according to the report.

The RBI has said it will act only if inflationary pressures become more broad-based. The Finance Ministry earlier said that price pressures are spreading beyond food, with higher global fuel costs and unfavourable weather affecting a wider range of consumer prices.

The central bank has kept interest rates unchanged so far this year and is expected to hold rates again when its six-member monetary policy committee meets from August 3 to 5. Notably, future decisions will depend on whether geopolitical tensions keep oil prices high and whether the monsoon affects the summer-sown crop harvest, Bloomberg reported citing experts.