Pidilite Industries Limited — Q4 FY26 earnings call

Call held 8 May 2026

Management summary

Pidilite Industries reported strong Q4 FY26 results with stand-alone revenue growing 15.3% and underlying volume growth matching at 15.3%. EBITDA margin expanded by 280 bps to 23.4%, leading to a consolidated PAT growth of 36.6%. While exports and the Nina waterproofing business faced headwinds, core Consumer & Bazaar and B2B segments showed robust volume growth. The company approved a final dividend of INR 11.5 per share and is navigating significant raw material inflation through calibrated price increases.

Highlights

  • Stand-alone revenue grew by 15.3% in value terms to INR 3,272 crores, with underlying volume growth (UVG) of 15.3%.

  • EBITDA margin expanded by 280 bps to 23.4% YoY, with EBITDA growing by 31.1%.

  • Consolidated PAT grew by 36.6% for the quarter.

  • Both Consumer & Bazaar and B2B segments recorded strong UVG of 15.4% and 14.8% respectively.

  • A final dividend of INR 11.5 per share was approved, leading to a payout ratio of around 70% including the special dividend.

Concerns

  • Exports were impacted in March due to supply chain disruptions from the conflict in Gulf and West Asia.

  • The Nina waterproofing business declined by 16% due to environmental challenges impacting work fronts.

  • Raw material basket inflation is currently 40-50% at replacement prices, with VAM prices surging by 70% since the conflict began.

  • Treasury income was impacted by rising bond yields, causing some mark-to-market effect.

Key financials

2 periods

Headline

  • Stand-alone Revenue
    ₹3,272 Cr
    YoY +15.3%
  • Stand-alone UVG
    15.3%
  • EBITDA Margin
    23.4%
  • EBITDA Growth
    31.1%
  • Consolidated Revenue Growth
    14.1%
  • Consolidated PAT Growth
    36.6%

FY26

  • Consolidated Revenue
    ₹14,553 Cr
    YoY +11.1%
  • Consolidated PAT Growth
    17.9%

What they filed

Q1 FY27: revenue up 22.1%, net profit up 27.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,977 3,099 2,851 3,479 3,287 +10%3,436 +11%3,285 +15%4,249 +22%
EBITDA731 749 584 888 807 +10%840 +12%766 +31%1,121 +26%
Net profit542 534 446 650 586 +8%601 +13%547 +23%830 +28%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Consumer and Bazaar
    15.4% UVG
  • B2B
    14.8% UVG
  • International Subsidiaries
    8% Growth
  • Domestic Subsidiaries
    5.3% Growth
  • Nina Waterproofing
    -16% Growth

Capital allocation

high confidence
  • Capex ₹570 Cr
    • Classic growth capex
    • Automation, consolidation, and major renovation of existing core categories (e.g., premium white glue, Fevicol)
    • Investment in newer categories or areas
    So our capex in the year also was higher than what we had spent in the previous year. With this, I open the floor for Q&A. Thank you. ... And last year, we would have spent close to INR 570 crores on capex compared to INR 430 crores in the prior year. ... So first question, I think we have talked about it in the past also. Our capex tends to be actually 3% to 5% of our revenue turnover. ... The second capex, which we do incur and is around basically automation, consolidation and major renovation of some of our existing core categories, especially premium white glue. So I think that is one area where as we speak in this quarter one of FY '27, we will be commissioning a large plant in West India for our premium white glue and Fevicol.
  • Dividend ₹11.5/share (final) Payout ratio 70%
    The Board also approved a final dividend of INR11.5 per share on an expanded share capital. ... So including the special dividend, the payout ratio will be around 70%.
  • M&A BuildNext (transferred to JSW One) Divestment · Closed

    BuildNext found a strategic home in JSW One, which can provide scale and profitability. Pidilite will become a small shareholder in JSW One and explore synergies.

    Pidilite's shareholding in JSW One will be insignificant.

    I think BuildNext basically has a good home in JSW One. And yes, you are right, post the transaction, we will be shareholders of JSW One as well. As far as the other synergies are concerned, we will explore them as we go along. ... Our shareholding in JSW will be quite insignificant. So BuildNext was strategic for us. And for JSW One also, BuildNext was strategic. And we felt that the business is best served with an owner like JSW who can provide its scale and profitability. So we were very happy to swap our shareholding there.

Guidance & targets

Volume

  • Underlying Volume Growth (UVG) expansion Volume · as we go forward · Medium confidence about 100-odd bps expansion
    I think this about 100-odd bps expansion as we go forward is something we are planning for and we would like to deliver.

    — Sudhanshu Vats

Margin

  • EBITDA Margin band Margin · for the year · High confidence 20% to 24%
    As far as we are concerned, at this moment, I would say we have guided a corridor of 20% to 24%. We stay committed to that guidance.

    — Sudhanshu Vats

Raw Material

  • Weighted average raw material basket inflation Raw Material · current replacement price · High confidence 40% to 50%
    inflation is anywhere between 40% to 50%.

    — Sudhanshu Vats

Pricing

  • Fevicol division price increase Pricing · April-May 2026 · High confidence 12% to 15%
    There, we have taken about a 5% increase in April, and we have followed it up with another 7% to 9%, again, varies from product to product within the Fevicol division as well in early May. So I would suffice to say about 12% to 15% price increase.

    — Sudhanshu Vats

  • Blended company level price increase Pricing · April-May 2026 · High confidence 4% to 5% (April), another 7% to 8% (early May)
    I think Sudhanshu mentioned at a company level, we have taken in April around 4% to 5%. And in early May, another 7% to 8%. And these are blended at company level.

    — Sandeep Batra

What to watch in Q1 FY27

VAM price trajectory

next quarter
Current Surged 70% since start of conflict, $840/tonne in Q4 FY26
Target Stabilization or cooling off of prices

Why it matters

VAM is a critical raw material, and its price movement directly impacts gross margins and the need for further price hikes.

The VAM prices have surged. So right now, it has almost surged by 70% since the start of the conflict.

Risks & concerns

  • Raw material price inflation

    high

    Weighted average raw material basket inflation is 40-50% at current replacement prices, with VAM prices surging by 70% since the conflict began.

    Management acknowledged

  • West Asia conflict and supply chain disruption

    medium

    Conflict in Gulf and West Asia disrupted supply chains, impacting export revenues in March, though supply security is largely managed.

    Management acknowledged

  • Potential demand compression due to inflation and price hikes

    medium

    Sustained high inflation and price increases could lead to demand compression, though current demand buoyancy is strong.

    Analyst acknowledged

  • Environmental pollution restrictions impacting construction

    medium

    Pollution restrictions (e.g., GRAP in Delhi) in winter months affect construction site work, causing a 16% decline in Nina waterproofing business in Q4 FY26.

    Management acknowledged

Q&A highlights

7 direct
BuildNext transfer to JSW One - Strategic vs. Financial Investment Direct
I think BuildNext basically has a good home in JSW One. And yes, you are right, post the transaction, we will be shareholders of JSW One as well. As far as the other synergies are concerned, we will explore them as we go along. ... Our shareholding in JSW will be quite insignificant. So BuildNext was strategic for us. And for JSW One also, BuildNext was strategic.

Clarifies the nature of the transaction, indicating a strategic move for BuildNext rather than a significant financial investment for Pidilite in JSW One, while still keeping options open for future synergies.

Asked by Abneesh Roy

Genuine demand recovery vs. one-off factors Direct
I definitely believe that in the quarter that is gone by Q1 calendar and Q4 financial I think there has been a buoyancy in urban demand... So I think therefore, it is irrespective of any of these things, I think there has been a buoyancy.

Addresses concerns about the sustainability of the strong volume growth, confirming management's belief in genuine urban demand buoyancy rather than one-off factors.

Asked by Abneesh Roy

Middle East supply chain disruption and VAM price surge Direct
Our second and a very important priority is supply security... we have basically been able to map some of these things out. We have been constantly looking at alternate supplies... supply security is largely taken care of. ... VAM for the last quarter was around $840 a tonne, pretty much in line with the previous quarter.

Provides reassurance on supply chain resilience despite geopolitical conflicts and clarifies the VAM price situation for the reported quarter, while acknowledging current surge.

Asked by Sonali Salgaonkar

Quantum of price hikes taken Direct
Fevicol as a brand and that of our Fevicol division. There, we have taken about a 5% increase in April, and we have followed it up with another 7% to 9%... So I would suffice to say about 12% to 15% price increase.

Gives specific numbers for price increases in a key product category, indicating how the company is managing raw material inflation.

Asked by Sonali Salgaonkar

Roff's strong growth despite gas supply issues in Morbi Direct
your point that Morbi got affected is absolutely correct... However, I want to make a small correction that when it comes to tiles, the stock in the pipeline, first and foremost, with the dealer and a little bit otherwise as well, is very, very high... Is construction going on and therefore, tile getting fixed and therefore, Roff getting used? Absolutely, yes.

Explains how Roff maintained strong growth even with industry-wide gas supply disruptions, attributing it to high inventory levels in the channel and continued construction activity.

Asked by Sonali Salgaonkar

Price elasticity of demand with high inflation Partial
with this kind of inflation, Percy, to be honest... there will be some demand compression. What will be the quantity of demand compression and when will it come is difficult to predict at the moment.

Highlights a key risk for future quarters – potential demand compression due to sustained high inflation and price increases, which management acknowledges but cannot quantify yet.

Asked by Percy Panthaki

Impact of unorganized players and market share gains Direct
your point is generally correct, Jay, which is that basically the unorganized sector struggles a little bit in this kind of volatility without doubt and basically compared to more organized players. I think it's very early at this moment to comment on this.

Confirms that unorganized players are struggling due to volatility, potentially leading to market share gains for organized players like Pidilite, though it's too early to quantify.

Asked by Jay Doshi

Waterproofing business momentum and Nina Percept's volatility Direct
we have seen our waterproofing business get back to the kind of levels that a growth category should grow at... I think the issue with Nina is not about lack of orders... what happens in winter period, particularly end of Q3, beginning of Q4 is that because of this pollution restrictions, a lot of construction sites don't get permission to do work.

Explains the specific reason for Nina Percept's volatility (pollution restrictions impacting construction sites) and reassures that the overall waterproofing business momentum is strong, with a healthy order book.

Asked by Jay Doshi

3 min read 7 chapters

Detailed narrative

Strong Q4 FY26 Performance Driven by Volume Growth

Pidilite Industries reported a robust Q4 FY26, with stand-alone revenue growing by 15.3% to INR 3,272 crores, entirely underpinned by an underlying volume growth (UVG) of 15.3%. This marks an acceleration from the 9.8% UVG in the previous quarter and 9.3% in FY25. Both Consumer & Bazaar and B2B segments contributed significantly, achieving UVG of 15.4% and 14.8% respectively.

EBITDA Margin Expansion Despite Cost Pressures

The company achieved a significant EBITDA margin expansion of 280 bps YoY, reaching 23.4% in Q4 FY26, with EBITDA growing by 31.1%. This was primarily due to a 100 bps improvement in gross margins and strong operating leverage, as total costs increased by only 9.2% against a 15.3% sales growth. Consolidated PAT grew by 36.6% for the quarter, and for the full year FY26, consolidated PAT grew by 17.9%.

Raw Material Inflation and Calibrated Price Hikes

Pidilite is facing substantial raw material inflation, with its weighted average raw material basket seeing an increase of 40-50% at current replacement prices, and VAM prices surging by 70% since the start of the West Asia conflict. To mitigate this, the company implemented calibrated price increases, including a total of 12-15% for the Fevicol division across April and early May, and a blended company-level increase of 4-5% in April followed by another 7-8% in early May.

Impact of Geopolitical Events and Domestic Challenges

Exports were impacted in March due to supply chain disruptions caused by the conflict in Gulf and West Asia, though the company has secured alternate supplies. Domestically, the Nina waterproofing business declined by 16% due to environmental pollution restrictions (like GRAP in Delhi) affecting construction site work, particularly in the winter months. However, the overall waterproofing business, including Dr. Fixit, continues to show strong momentum.

Strategic Capital Allocation and Shareholder Returns

The company's capex for FY26 was INR 570 crores, higher than the previous year's INR 430 crores, aligning with its philosophy of investing 3-5% of revenue in capacity expansion, automation, and new categories. A large plant for premium white glue and Fevicol in West India is slated for commissioning in Q1 FY27. Pidilite also approved a final dividend of INR 11.5 per share, resulting in a payout ratio of around 70% including a special dividend from the previous year.

BuildNext Divestment and Future Synergies

Pidilite transferred its BuildNext platform to JSW One, becoming a small shareholder in JSW One. This move is seen as strategic, providing BuildNext with a suitable home to scale, while allowing Pidilite to explore potential synergies with JSW One's marketplace, which is expected to go beyond its own products. Management stated that Pidilite's shareholding in JSW One will be insignificant.

Paints Business Progress and Strategy

The paints business is gaining good traction in Rurban (rural and small town) India, with expansion into West Bengal and Bihar. However, the company is still working on defining its unique 'right to win' strategy and business model for larger towns before a full-scale expansion. Management emphasized that once this strategy is clear, a full-scale expansion will follow.

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