Pidilite falls 4% as material costs squeeze margins

PIDILITIND dustries Limited (PIDILITIND) fell 4.17% on October 29, as its Q2 FY27 results showed a sharp margin squeeze from high material inflation. The results came out on October 28. Consolidated revenue rose 20.9% to ₹4,297.59 crore, beating estimates by about 1.5%. Underlying volume growth was 10.7%, and the Consumer & Bazaar segment grew revenue 20.7%. But consolidated EBITDA rose only about 3% to ₹878 crore. Consolidated net profit grew 7.1% to ₹626 crore, according to the company’s release. Managing Director Sudhanshu Vats said the company faced very high material inflation amid unprecedented volatility. Demand is clearly holding up. Double-digit volume growth for a second straight quarter shows Fevicol and the company’s other brands are still gaining traction. The issue is cost, not sales. The margin damage is significant. EBITDA margin narrowed to 20.4% from about 24% a year ago, so revenue growth of 21% turned into operating profit growth of just 3%. The B2B segment was hit hardest, with its profit falling to ₹114.14 crore from ₹115.75 crore despite 21.8% revenue growth. Profit also includes a one-time ₹14.41 crore gain from transferring its BuildNext investment, so core earnings growth was even weaker. The company is raising Fevicol prices to offset costs, which could slow volumes if demand softens. Investors should watch raw material prices, the impact of price hikes on volume growth, EBITDA margin recovery, and B2B profitability. The key question is whether Pidilite can restore margins through pricing without losing its double-digit volume momentum. Disclosure: I do not hold any position in Pidilite Industries Limited. This post is for informational purposes only and is not investment advice.