PIDILITIND - Pidilite Industries Ltd. Share Price

In the earnings call for Q1 FY '26 held on August 7, 2025, Pidilite Industries management provided an optimistic outlook supported by robust financial performance. The standalone revenue reached INR 3,467 crores, reflecting a 10.6% increase from the previous year, driven by an underlying volume growth (UVG) of 9.9%. The Consumer and Bazaar segment grew at 9.3%, while the B2B segment reported a significant 12.6% growth.

Key forward-looking points include:

1. Dividend and Bonus Issue: The Board announced a special interim dividend of INR 10 per share and a 1:1 bonus issue, marking the first bonus issue in 15 years.

2. Geographical Performance: Rural growth continues to outpace urban growth, with insights indicating that competitive intensity in states like Andhra Pradesh and Gujarat has eased, although challenges remain in Kerala.

3. Profit Growth: The profit before tax (PBT) increased by 18.5% year-over-year, while profit after tax (PAT) grew by close to 18%. EBITDA margins rose to 25.6%, a 101 basis point improvement from the previous year.

4. Future Strategies: Management emphasized continuous premiumization of products, especially in the tile adhesive market, along with a strong growth trajectory in the waterproofing segment under the Dr. Fixit brand.

5. Pricing Growth Outlook: Management indicated a tactical approach to pricing, with expectations of continued positive pricing growth but at a modest level due to benign input costs.

6. Expectations for Volume Growth: There is a strong emphasis on maintaining or exceeding the current UVG of 10%, with optimisms about sustained growth across various product categories and regions, particularly driven by innovative products and strong brand positioning.

Overall, management conveyed confidence in achieving double-digit growth amidst favorable market dynamics and effective strategic initiatives.

Q&A Highlights from Pidilite Industries Earnings Call (August 7, 2025)

Question 1: Are Gujarat and Andhra Pradesh now normal versus pan-India growth? Any other states to highlight?

• Answer: Yes, the issues in AP and Gujarat have eased, and overall, their performance is improving. Competitive intensity does remain, particularly in urban areas. We are consistently addressing weaknesses with rigorous analysis. Currently, Kerala shows some challenges, but we are investigating solutions.

Question 2: Can you comment on Roff's pricing power versus paint legacy players?

• Answer: Our Roff brand still commands a premium due to our extensive product offerings. While competition in Hyderabad is fierce, we believe our established brand strength will protect us against rival spread into other markets.

Question 3: How are things progressing with the UnoFin product and Haisha Paints?

• Answer: UnoFin is still in the early stages; we're shifting focus to larger projects like commercial buildings. Haisha Paints continues to grow, particularly in our pilot states. We aim to carve out a niche in the rural and semi-urban markets, where few competitors are present.

Question 4: What are your volume growth expectations for B2C segments like Araldite and Dr. Fixit?

• Answer: We are optimistic about sustaining our 10% volume growth. Our innovations in products like Nail-free Ultra and Relam have shown positive uptake. Other segments are also displaying robust growth, ensuring a steady upward trend.

Question 5: Can you provide guidance on pricing growth for the rest of the year?

• Answer: We anticipate low single-digit pricing growth, primarily due to benign input costs and less need for broad pricing increases. The current pricing strategy will be more tactical than reactive.

Question 6: How are you viewing margins for FY '26?

• Answer: We maintain our guidance of 20% to 24% for EBITDA margins. Given the current benign input cost environment, we believe we could lean towards the higher end of that range by year-end.

Question 7: What is your stance on M&A opportunities?

• Answer: We continuously evaluate M&A opportunities, focusing on premium and specialized products. We also remain open to partnerships that could enhance our market position, particularly in home improvement.

Question 8: Are you seeing areas of competition that are particularly challenging?

• Answer: While competition exists across categories, we are proactive in iterating on product offerings to remain competitive and ensure strong performance. Our consistent feedback loop with users helps in fine-tuning our approach.

This summary encapsulates the key questions and responses from the Q&A section while adhering to the character limit specified.