Pidilite Industries: Sticking to Growth in Q2 FY26

Pidilite Industries, a household name in India for adhesives and construction chemicals, has reported a robust performance for the second quarter of Fiscal Year 2026. The company's standalone revenue surged by 10.4% year-on-year, reaching ₹3,272 crore, while consolidated revenue grew by 9.8% to ₹3,540 crore. This growth was underpinned by a healthy 10.3% underlying volume growth (UVG) for the standalone entity, signaling strong market demand.

The Consumer and Bazaar (C&B) segment was a key driver, achieving an impressive 10.4% UVG, marking its return to double-digit growth after five quarters. This indicates a resurgence in consumer spending and market penetration. The Business-to-Business (B2B) segment also contributed positively with a 9.9% UVG. While the project business maintained its growth momentum, the industrial products revenue faced headwinds due to lower exports, primarily impacted by geopolitical uncertainties and tariffs in certain markets. Despite these external challenges, the domestic B2B segment demonstrated strong resilience, delivering mid-teens volume growth.

Strategic Leveraging of Input Costs

Pidilite's profitability was significantly boosted by benign input prices during the quarter. The gross margin expanded to 54.3%, an improvement over 53.8% in Q2 FY25. This was largely attributed to a lower consumption rate of Vinyl Acetate Monomer (VAM), a critical raw material. Management strategically utilized these cost savings to ramp up advertising and sales promotion (A&SP) expenditure by nearly 80% compared to the previous year. This judicious deployment of resources allowed the company to drive growth and strengthen its brand presence without compromising its EBITDA margins, which remained stable at 24.7% for the standalone business.

Innovation and Market Expansion

The company continues to innovate and expand its product portfolio. New introductions include a Professional Fevikwik Range, featuring variants like 'Extra Fast', 'Extra Strong', and 'Extra Thick', designed to cater to diverse professional user applications. In the construction chemicals segment, Pidilite launched 'NioPro by Roff', a premium tile adhesive range with Techno Adapt technology, leveraging Grupo Puma's expertise. Digital marketing initiatives also saw significant traction, with the Fevikwik AI innovation campaign garnering millions of views and substantial user engagement across Meta and YouTube.

Pidilite is also making strategic investments to capture growth in the broader construction sector through its Pidilite Professional Solutions, which includes building a full-fledged architect interior design program. The Jowat business, focusing on joinery and advanced packaging, continues to show clear traction, further diversifying the company's industrial offerings.

Outlook and Future Commitments

Looking ahead, Pidilite remains optimistic about the domestic operating environment, anticipating improvements driven by favorable monsoons, the indirect cascading impact of GST 2.0, and accelerated growth in the construction sector fueled by benign interest rates and enhanced liquidity. The management reiterated its commitment to driving consistent, profitable, and volume-led growth through continued investment in brands, supply chain, and human capital. The company expects VAM prices to remain benign for the next 3 to 6 months and aims to maintain its EBITDA margins within the 20-24% corridor, potentially at the higher end if raw material prices remain favorable.

Pidilite's Q2 FY26 performance underscores its strategic clarity and disciplined execution. By effectively managing input costs, investing in innovation, and expanding market reach, the company is well-positioned to capitalize on India's growth trajectory, particularly in the construction and consumer segments.