Pidilite Industries Reports Steady Q2 Demand, Rules Out Immediate Price Hikes

Adhesives and construction chemicals maker Pidilite Industries expects consumer demand to remain resilient despite inflationary pressures and does not see an immediate need for further price increases in the current quarter, according to Managing Director Sudhanshu Vats.

The company previously implemented price increases of up to 12 percent in tranches during the June quarter. These adjustments were made to offset the spike in crude prices triggered by the West Asia crisis. With easing volatility, the company does not foresee a requirement for fresh price hikes in the current quarter, though it continues to monitor commodity trajectories.

Speaking to PTI, Vats noted that demand trends in July and August remained broadly in line with the June quarter. Overall consumer sentiment in India is described as reasonably robust, with demand holding steady across both periods despite ongoing inflation.

The maker of Fevicol, Fevikwik, and Dr Fixit remains confident of delivering double-digit underlying volume growth in FY27 while maintaining profitability. This outlook is supported by strong demand across urban and rural markets alongside a disciplined approach to pricing. Vats stated that the company priced its products to cover absolute cost increases rather than chasing margin expansion, executing hikes in a calibrated manner over multiple tranches.

Pidilite's raw material basket includes Vinyl Acetate Monomer (VAM), a key ingredient sourced from crude derivatives used to manufacture Polyvinyl Acetate (PVAc), the core polymer base for white wood adhesives like Fevicol. Crude prices, which stood at around USD 60 a barrel prior to the West Asia crisis, have stabilised closer to USD 80, introducing structural inflation alongside currency depreciation from the rupee.

Vats explained that the company has begun issuing rebates on select brands where input costs have eased. However, a certain degree of built-in inflation from crude and rupee depreciation may eventually need to be passed on as the impact plays out over roughly six months.

Unlike fast-moving consumer goods companies reporting stronger rural growth, Pidilite has not observed significant weakness in cities. Its product demand is linked to renovation, construction, and repair projects rather than frequent monthly purchases, allowing urban demand to remain healthy alongside strong rural momentum.

Beyond the domestic market, Pidilite aims to expand its international business, which contributes about 10 percent of total revenue. While South Asia remains its primary growth market, the company is selectively building its presence in Africa—operating in Kenya through a partner and establishing a footprint in Tanzania—while evaluating opportunities in Southeast Asia.

Regarding corporate developments, Vats declined to comment on specific M&A transactions, noting that the company continuously evaluates opportunities. On capital expenditure, Pidilite recently inaugurated a major manufacturing facility in Maharashtra, is evaluating another plant in northern India, and is increasing investments in larger-scale factories following the commissioning of a facility in Visakhapatnam.

"Pidilite's approach highlights the importance of disciplined pricing and cost management during commodity volatility. By focusing on passing on absolute cost increases rather than aggressive margin expansion, established enterprises can maintain steady volume growth and consumer trust. Furthermore, balancing domestic urban-rural resilience with a measured international expansion strategy provides a stable foundation for long-term manufacturing growth." — Dr. Shishir Gupta, Founder & CEO, StartupLanes