Pidilite Industries expects demand to remain resilient through FY27 and is hopeful of delivering double-digit underlying volume growth, even as geopolitical tensions and volatile raw material prices continue to pose risks to the business.
The adhesives and construction chemicals maker reported a strong start to the ongoing financial year, with consolidated sales rising 21.3% year-on-year to Rs 4,541 crore in the June quarter (Q1FY27). Underlying volume growth stood at 11.3%, while price-led growth was 10%. Consolidated earnings before interest, tax, depreciation and amortisation (Ebitda) margin stood at 26.3%, up 120 basis points versus last year. One basis point is one-hundredth of a percentage point.
The company attributed the performance to a combination of healthy demand, timely price increases, favourable inventory costs and tight control over operating expenses.
“Demand remained strong. We were able to pass on the absolute increase in raw material to the market as demand was holding up,” managing director Sudhanshu Vats said during a media interaction. Pidilite’s volume growth in the June quarter was marginally ahead of the 11.1% average recorded in FY26. The company hopes to sustain this trajectory through the rest of the year.
Pidilite took price increases ranging from 2% to 12% across its consumer and bazaar portfolio in Q1, while increases in industrial businesses were higher as the company sought to pass through raw material cost inflation. The Mumbai-based company derives over 80% of its topline from its core consumer and bazaar (C&B) segment, which includes iconic household and retail brands like Fevicol, Fevikwik, and Dr. Fixit. The rest comes from its business-to-business and international segments.
Raw material costs have been particularly volatile. Vinyl acetate monomer (VAM), a key input, rose from around $850-900 per tonne to nearly $2,000 before easing to about $1,200 in Q1. Other materials, including butyl acrylate, styrene and toluene, have also faced cost pressures.
Pidilite said it would pass on the benefit of falling input prices through rebates to the trade where appropriate, limiting the scope for structurally higher margins from commodity deflation.
The company remains cautious on rural demand amid uncertainty around the monsoon. However, Vats said both urban and rural markets were currently seeing strong, double-digit sales growth, with urban demand improving significantly during the quarter.
Apart from underlying volume growth, Pidilite has retained its long-term Ebitda margin framework of 20-24% for FY27, while indicating that the current year’s margin could be towards the middle to higher end of that range.
Driving Premiumisation
Pidilite is also continuing to invest in distribution, innovation and premiumisation. Its Pidilite Ki Duniya (PKD) distribution network in rural and semi-urban areas is nearing 25,000 outlets from 15,000 outlets a year ago. Premium products such as NioPro tile adhesive are gaining traction among consumers, Vats said.
Quick commerce is emerging as another avenue for premiumisation, especially in urban areas. In Fevikwik, premium variants such as Easy Gel and Advanced are seeing an uptick in q-comm, where consumers appear more willing to trade up from the company’s entry-level products, Vats said.
The company is also strengthening its supply chain. It has diversified suppliers and geographies from single-source suppliers earlier. It has additionally created buffers of packaging-material feedstock to support smaller suppliers during periods of supply disruption.