Pidilite Industries reported a 10.4% revenue increase in Q2 FY26, driven by strong performance in the Consumer and Bazaar segments. Benign input prices, particularly VAM at $883 compared to $980 last year, aided gross margin improvement. The company strategically increased advertising and sales promotion expenditure by 80%. Pidilite remains focused on demand generation and continues to invest in growth categories and brand building.
Financial Performance
In the second quarter of FY26, Pidilite Industries’ stand-alone revenue reached INR 3,272 crores, showcasing robust growth. The Consumer and Bazaar segment saw a UVG (Underlying Volume Growth) of 10.4%, while the B2B business grew by 9.9%. Total stand-alone UVG stood at 10.3%, translating to a value growth of 10.4%. Exports were impacted by geopolitical uncertainty and tariffs.
Gross Margins and Expenditure
Gross margins improved by nearly 0.5% due to favorable input prices. VAM (Vinyl Acetate Monomer), a key raw material, was consumed at $883 compared to $980 in Q2 last year. This margin expansion allowed for increased spending on advertising and sales promotion, up nearly 80% year-over-year, representing a 150-160 basis points increase as a percentage of sales.
EBITDA and Investments
EBITDA margins remained consistent with Q2 of the previous year. Lower non-operating income was observed due to dividend payouts and interest rate corrections. Domestic subsidiaries reported a revenue growth of 10.7% with a 22.6% increase in EBITDA. International subsidiaries experienced a more subdued top-line growth of 4.5%.
Segment Performance and Growth Drivers
Rural markets continue to outperform urban areas, but urban performance showed improvement in Q2 FY26. Growth drivers include the construction sector and growth brands. Pidilite is focused on building a full-fledged architect interior design program and is preparing to capture growth in the construction sector. The company maintains its A&SP (Advertising & Sales Promotion) spend in the 3% to 5% range and remains committed to a 20% to 24% EBITDA corridor.
Strategic Outlook and Initiatives
Pidilite is fine-tuning its Haisha business model and plans to increase investments in the second half of the year. The company focuses on repeat demand and same-store sale growth in rural areas, emphasizing depth over width in distribution. Growth segments in Consumer and Bazaar have performed well, with Roff now considered a key growth category rather than a pioneer. The company continues to evaluate opportunities for both organic and inorganic growth and will keep scouting areas for potential expansion. Capex is expected to remain in the 3% to 5% of sales range.
B2B Segment and Export Outlook
The domestic B2B segment delivered mid-teens underlying volume growth in Q2. Pressure on exports continues due to tariff issues. Pidilite expects the momentum in the domestic B2B segment to continue. As far as tariffs are concerned, recent movements indicate some semblance of stability, and the company is confident in maintaining momentum.
Electronic Adhesives and Jowat
Sales to a couple of customers have started in the electronic adhesives foray with CollTech partnership, the effort is still in its early stages. Jowat is showing clear traction in the context of joinery and advanced packaging and conversion.
UnoFin
UnoFin has not yet delivered in line with expectations. Efforts are focused on changing market practice and offering water-resistant coating. Kavinder noted that more of our factories in the Northern Region will further perfect this whole business model.
Source: BSE
