According to latest regulatory filings, Pidilite Industries Ltd. delivered strong financial results for the second quarter of fiscal 2027, with consolidated net profit rising 6.2% to ₹615 crore compared to ₹579 crore in the year-ago period. The company's revenue surged 20.9% to ₹4,298 crore, up from ₹3,554 crore in the corresponding quarter of the previous financial year. The earnings before interest, taxes, depreciation and amortisation (Ebitda) increased 3.2% to ₹878 crore, with Ebitda margin at 20.4% for the quarter. As per the latest exchange filing, the company's total expenses were at ₹3,632.87 crore, up 29% in the September quarter, while total income including other income reached ₹4,362.18 crore, up 21%. However, EBITDA margin contracted to 20.4% from 23.9% a year ago, missing the CNBC-TV18 poll estimate of 22.2%.
The company's revenue performance was broad-based across all segments during Q2 FY27. Revenue from the Consumer & Bazaar segment was ₹3,423.57 crore, up 20.7%, while Business to Business segment revenue increased 19.87% to ₹912.59 crore. This segment mainly covers the sale of products to end consumers, including retail users such as carpenters, painters, plumbers, mechanics, households, and offices. The 'Others' segment, which includes raw materials and Non-Banking Finance Company operations, was at ₹25.37 crore, up 79.5% in Q2 FY27. In the first half of FY27, total consolidated income was up 21% to ₹9,005.73 crore, demonstrating sustained growth momentum across the business. The company reported underlying volume growth (UVG) of 11.1% in its Consumer and Bazaar segment and 9.2% in its Business-to-Business segment.
Despite strong revenue growth, the company faced significant margin compression as gross margin fell around 650 basis points to 48.6% from 55% a year ago. This substantial margin pressure reflects the challenging cost environment facing the adhesives manufacturer. Cost of goods sold rose to ₹2,210.88 crore from ₹1,598.15 crore, pulling gross margin down significantly. The margin pressure came despite strong revenue growth, with Managing Director Sudhanshu Vats noting that margins in the September quarter were likely to be at the lower end of the company's guided 20-24% band. According to channel checks, the company has implemented price increases of ₹5 per kg across Fevicol adhesive products in October, marking the third price hike this year. The latest increase came amid a sharp rise in input costs, with raw material prices reportedly increasing by 40-50%.
Brokerage firms have mixed views on Pidilite Industries following the Q2 results. Citi lowered its target price to ₹1,300 from ₹1,550, maintaining a Sell rating and flagging concerns over profitability and valuations. The brokerage highlighted the divergence between 21% revenue growth and modest expansion in Ebitda and net profit, while reducing FY27-29 earnings per share estimates by 2-5%. Goldman Sachs retained its Buy rating despite weaker-than-expected operating performance, highlighting 11.1% volume growth in the Consumer and Bazaar business and 9.2% growth in B2B segment. HSBC maintained its Buy rating with a target price of ₹1,920, supported by underlying volume growth of 10.7% and management's confidence in sustaining growth momentum. However, HSBC flagged an Ebitda miss of 5-7% against estimates, mainly due to high-cost inventories. Shares of Pidilite Industries closed 4.2% lower at ₹1,389.60 ahead of the Q2 results announcement, reflecting market concerns despite strong quarterly performance.
