MUMBAI, Nov. 4 -- JSW Dulux is gaining volumes at a double-digit pace, but rising raw material costs are eroding margins as the paint maker struggles to pass on higher prices without hurting demand.

The company reported 21% year-on-year volume growth in the September-ended quarter and continued to record double-digit volume and revenue growth in October. But management cautioned that further price increases could eventually weigh on consumption, while some of the recent demand may reflect dealers building inventory ahead of higher prices.

"We have to be very careful. The problem is it's a bit of a conundrum because on one hand, if you don't take price increases, you don't cover margins.and if you do take it, then there is a demand pullb...