Supply disruptions have driven key container freight rates up by more than 300% compared to pre-crisis levels, compounded by price jumps in commodities like palm oil and basic metals. In response, corporate giants such as Hindustan Unilever and Asian Paints have absorbed higher expenses, resulting in roughly 200 basis point contractions in their respective EBITDA margins. Carmaker Maruti Suzuki also instituted price hikes of up to Rs 20,000 on certain models to offset these climbing overhead costs.
Key points
Indian enterprises are absorbing substantial raw material inflation rather than passing f…: Indian enterprises are absorbing substantial raw material inflation rather than passing full expenses onto consumers to safeguard demand.
Geopolitical turmoil has broadened input inflation beyond direct energy costs to include…: Geopolitical turmoil has broadened input inflation beyond direct energy costs to include packaging, industrial plastics, and agricultural commodities.
Margin compression is hitting diverse manufacturing sectors, impacting automotive produce…: Margin compression is hitting diverse manufacturing sectors, impacting automotive producers, electrical goods makers like Havells, and major paint brands.
Sources checked by our analysis pipeline: 1
The cost pressures have spread beyond crude oil to packaging materials, plastics, rubber, chemicals, metals and edible oils, while disruptions to shipping routes have pushed up freight expenses.
Also Read: Hindustan Unilever looks to stronger FY27, but commodity inflation threatens to squeeze margins
"The cost shock since the West Asia conflict began in late February 2026 has been broad-based, not limited to oil-intensive sectors," Jitin Makkar, senior vice president and group head at ICRA told ET Online.
West Asia conflict pushes up energy, commodity and logistics costs
Makkar identified three channels through which the conflict has affected corporate costs: direct energy expenses, higher prices of crude derivatives and rising logistics costs.The first includes fuel, power, petcoke and coal used by process industries, as well as aviation turbine fuel (ATF) for airlines.
The second covers crude-linked inputs such as packaging materials, plastics, rubber and chemicals, which are used across several manufacturing and consumer-facing industries.
The third channel is logistics. Container spot rates on key shipping routes have risen to more than 300% above pre-crisis levels, with war-risk surcharges adding to the…
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