PIDILITINDNSEQ4 & FY26May 08, 2026

Pidilite Industries Limited

9,457words
88turns
9analyst exchanges
4executives
Management on call
Sudhanshu Vats
MANAGING DIRECTOR – PIDILITE INDUSTRIES LIMITED
Sandeep Batra
EXECUTIVE DIRECTOR
Bhavesh Joshi
SENIOR VICE PRESIDENT
Jay Doshi
KOTAK SECURITIES
Key numbers — 40 extracted
INR 3,272 crore
ck summary of the performance for the quarter. In the Current quarter, our stand-alone revenue at INR 3,272 crores grew by 15.3% in value terms and was underpinned by underlying volume growth of 15.3%. This co
15.3%
ance for the quarter. In the Current quarter, our stand-alone revenue at INR 3,272 crores grew by 15.3% in value terms and was underpinned by underlying volume growth of 15.3%. This compares to under
9.8%
as underpinned by underlying volume growth of 15.3%. This compares to underlying volume growth of 9.8% that we had delivered till December and 9.3% UVG that we delivered in FY '25. Both our Consumer a
9.3%
5.3%. This compares to underlying volume growth of 9.8% that we had delivered till December and 9.3% UVG that we delivered in FY '25. Both our Consumer and Bazaar and B2B businesses recorded strong
15.4%
'25. Both our Consumer and Bazaar and B2B businesses recorded strong UVG. Consumer and Bazaar was 15.4% and B2B was 14.8%. I think the only area line of business that saw some disruption was in exports
14.8%
er and Bazaar and B2B businesses recorded strong UVG. Consumer and Bazaar was 15.4% and B2B was 14.8%. I think the only area line of business that saw some disruption was in exports. Both for Consume
100 basis point
February, the performance had been strong. Our gross margins also improved versus Q4 last year by 100 basis points and were kind of in line with the immediately preceding quarter. Our control on costs, where t
9.2%
little bit of extra charge on account of wage code, all our costs below margin increased by only 9.2% compared to a sales growth of 15.3%. And you can see this operating leverage flowing back to the
23.4%
f 15.3%. And you can see this operating leverage flowing back to the EBITDA. And EBITDA margin at 23.4% expanded by 280 bps versus same period last year. And for the quarter, EBITDA grew by 31.1%. PAT
280 bps
an see this operating leverage flowing back to the EBITDA. And EBITDA margin at 23.4% expanded by 280 bps versus same period last year. And for the quarter, EBITDA grew by 31.1%. PAT growth was slightly
31.1%
in at 23.4% expanded by 280 bps versus same period last year. And for the quarter, EBITDA grew by 31.1%. PAT growth was slightly slower largely because of timing differences regarding dividends that we
INR11.5
wever, the YTMs remain strong on all our investments. The Board also approved a final dividend of INR11.5 per share on an expanded share capital. You may note that last year, we had announced a 1:1 bonu
Guidance — 20 items
Sandeep Batra
opening
“This dividend will be paid subject to approval by the shareholders at the AGM and is in addition to the special dividend that we had given of INR 5 a share.”
Sandeep Batra
opening
“So including the special dividend, the payout ratio will be around 70%.”
Sudhanshu Vats
qa
“And yes, you are right, post the transaction, we will be shareholders of JSW One as well.”
Sudhanshu Vats
qa
“Sandeep Batra: Our shareholding in JSW will be quite insignificant.”
Sudhanshu Vats
qa
“Our shareholding will be insignificant in JSW One.”
Sudhanshu Vats
qa
“In the first scenario, we feel that the demand is likely to remain buoyant in a country like India and the inflation will be manageable as we go forward, although there will be inflation in the year.”
Sudhanshu Vats
qa
“So therefore, the impact of that immediate impact of that on demand is not likely to be seen and will be an impact only if it's a protracted West Asia conflict with a severe gas issue even then.”
Sudhanshu Vats
qa
“I think when we start looking at slightly bigger towns, what we call internally small town India, I think that is where what is the uniqueness which Pidilite has to bring in, what is the tweak needed in the business model, what will be our USP as Pidilite to give us that right to win is something still work in progress.”
Sudhanshu Vats
qa
“There will be increase in fuel prices as we go forward, which have not yet been declared.”
Sudhanshu Vats
qa
“So basically, in the case of scenario 1, I think we are going with the hypothesis that the demand buoyancy which India saw in the last quarter of FY26 will more or less sustain.”
Risks & concerns — 9 flagged
And if at all, any of the West Asia conflict would be a headwind to it as we go forward.
— Sudhanshu Vats
So therefore, the impact of that immediate impact of that on demand is not likely to be seen and will be an impact only if it's a protracted West Asia conflict with a severe gas issue even then.
— Sudhanshu Vats
So therefore, that's why I tell you the approach, which I highlighted and maybe I'll repeat it and at the risk of repetition for everyone is that the our approach is that we are looking at this replacement margin, so to say, at the current cost and saying that first and foremost how do we transfer these costs in a calibrated fashion into the market, calibrated and sort of staggered a little bit.
— Sudhanshu Vats
So the cumulative impact of a lot of this on demand is something which needs to be studied, needs to be understood.
— Sudhanshu Vats
What will be the quantity of demand compression and when will it come is difficult to predict at the moment.
— Sudhanshu Vats
It's very difficult to say for the year, and I think these things are only meaningful for the year, not for a quarter or anything.
— Sudhanshu Vats
And from that, you strip out all the impact of this wage code.
— Sandeep Batra
I think given the situation that we are in, it will be very difficult to hazard a guess as to what will happen in this year.
— Sandeep Batra
So there is no concern on availability now.
— Sandeep Batra
Q&A — 9 exchanges
Q
Congrats on very strong numbers. My first question is on the share swap that you have done with JSW One. Why transfer your BuildNext platform, BuildNext Construction Solutions. And is this a financial investment in JSW One given there is a plan for an IPO? And you do compete in paints, I think. So could there be some kind of a strategic tie-up in paints also? Is that possible?
Sudhanshu Vats
So Abneesh, I think the reason is that we found strategic synergies in doing this transaction. 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. I think that is where we are, Abneesh. That is a very significant statement. You'll explore. So you do compete in paints. In fact, you have bidded against each other in paints to acquire Akzo. So that option is there, right? As these marketplaces come up, Abneesh, I think the
Q
Congratulations on a great set of numbers. Sir I have 3 questions. Firstly on the Middle East supply chain disruption, as we are standing May what is the extent of supply chain disruption mainly in Jan. We understand that there was a significant jump in operating margin in Q4 probably because we have earlier lower cost inventory, but right now the data suggest that VAM prices have surged, so how do we foresee to navigate the situation? So my first question is regarding the Middle East disruption. The VAM prices have surged. So right now, it has almost surged by 70% since the start of the confl
Sudhanshu Vats
Yes. Sonali, so when you look at West Asia conflict as a management team and as a company, we have 3 key priorities. I think our first and foremost priority is the safety of our people there. You know we have an operation in Dubai. So I am very happy to report that we are doing well on that count. So I think that is our top priority. Our second and a very important priority is supply security and perhaps that's what your question is about. So I think what we have done is to sort of look at all our raw material and therefore map out everything which we sort of consume and see how each one of th
Q
Sir, continuing on the cost inflation part, could you help us with understanding at the current spot prices for your product portfolio bucket, what is the overall weighted average inflation in the COGS?
Sudhanshu Vats
So I spoke about it some time back Percy. I think first of all, good to hear from you. But Percy this is a range of 40% to 50% as our weighted average raw material basket. So I think that's where it is. That is at the current replacement price. But as Sandeep very rightly pointed out, just in the previous question, I think if I not mistaken, the situation is rather dynamic Percy. So I think the point is if you were to look at the peak, this is the number. But I think we are seeing a few raw materials coming off the peak. So therefore, that's why I tell you the approach, which I highlighted and
Q
My first question is on the Consumer and Bazaar. Can you give us a bit more understanding about this sharp 15% volume growth which we have witnessed in the 4th quarter? Was there any trade channel stock benefit or build up in the fourth quarter? And how should we see the trend going ahead?
Sudhanshu Vats
What benefit, I couldn't get that. What did you say? Some trade channel benefits in anticipation of price hike we would have been seen. Trade stock. Okay. So as I was saying in response to an earlier question, I think, first of all, we have been seeing reasonable buoyancy in demand. And I can share with you that we had a very robust February. And I can also share with you that at Pidilite, we have continued with our philosophy of not loading in any form in the month of March. So we always have and which is a well-tested old Pidilite practice, which is to sort of towards the second half of Marc
Q
I got three questions. So for the first is on the manufacturing capex. I understand that the growth in pioneer category would be more investment. But in third category, can we say that we have invested ahead of demand? Or is there still continuous expansion. First is on the manufacturing capex, so understand that growth in pioneer category should be more investment in terms of manufacturing. But in core categories, are you sure that you invested ahead of demand or it still need continues expansion. And also I would like to know the level of automation you have done in manufacturing?
Sudhanshu Vats
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. I think Sandeep also alluded to it in his opening commentary and last year, we have come in at about the median of that number or an average of that number. So I think that's the thing. And as far as our capex philosophy is concerned, there are 3 buckets in which we do capex. One is classic growth capex, we anticipate our growth in different growth categories and in general as growth and see how we are placed and do we have the right capacity and therefore, ther
Q
See, for the past 11 quarters, you were consistently delivering 8%, 10% UVG, which accelerated to 15% in 4Q. So if one assumes that West Asia situation probably stabilizes and raw material prices normalize in the next 2, 3 months, should we expect FY '27 UVG to be higher than FY '26, say, somewhere between 11% to 15%.
Sudhanshu Vats
So Jay, to answer your question, this is our stated position. If you look at, of course, you have talked about last 8, 10 quarters and then a blip in this quarter. That is also right, and that's one way to look at it. The way I am looking at it is a bit more, if you look at year-on-year, so therefore, we have expanded by about 100, 120 bps in FY '26 in terms of UVG. So therefore yes, I think this about 100-odd bps expansion as we go forward is something we are planning for and we would like to deliver. I think if I may add, Jay, I think this question would have been asked for the last 2 years
Q
Sir, just one question conceptual. While we look at consumer staple companies, we do understand price hikes tend to be relatively favorable from a revenue growth perspective. For our categories because Pidilite is not one category, it's multiple categories that we understand. How would you classify this? Would you say that price hikes are neutral, negative, positive? How should we look at it? And I'm not talking about very sharp price increases, obviously, but assuming this West Asia conflict kind of cools off?
Sudhanshu Vats
Yes. So Avi, I think like you said for CPG companies or FMCG companies, even for Pidilite, we have a consumer business, but also the Bazaar business, not sharp price increases, which you yourself qualified also, but price increases, that inflation, you can get that price increase with demand situation remaining the same, you will get your UVG and on top of that, you will get the prices. Absolutely, yes Avi. Perfect. And just second bookkeeping question. I missed this VAM number for the quarter. Apologies if you had shared this, if you could kind of just highlight that. That's all from my side?
Q
Yes. Very quick follow-up given one hour is up. So first is VAM supply demand, any change to any factory has gone out of production or anything in Middle East, U.S. or Iran has hit? Any clarity on the demand side, any acceleration globally?
Sandeep Batra
So VAM, yes, there were some supply disruptions from vendors who are located in that area. So we had a supply source in Saudi Arabia, which obviously got impacted. But I think there is abundant supply globally. I mean, or in the region from which we would be most cost effectively sourcing. So we have in the past also looked at such supply sources. And particularly a lot of it will be in China. So those are the sources that we are now exploring in terms of ensuring our supply continuity. So there is no concern on availability now. Last time we have seen VAM remain inflationary for a fairly long
Q
No further closing comments. Thank you, everybody, on the call for their continued interest in Pidilite, and we'll see you again around our Q1 results. Thank you. Bye.
Management
Speaking time
Sudhanshu Vats
28
Sandeep Batra
16
Moderator
11
Abneesh Roy
8
Jay Doshi
5
Sonali Salgaonkar
5
Percy Panthaki
5
Naveen Trivedi
5
Rajeshvari
3
Avi Mehta
2
Opening remarks
Jay Doshi
Thanks, Swapnali. Good afternoon, everyone. On behalf of Kotak Institutional Equities, I welcome you all to Q4 FY26 Earnings Call of Pidilite. We have with us Mr. Sudhanshu Vats, Managing Director; Mr. Kavinder Singh, Joint Managing Director; Mr. Sandeep Batra, Executive Director, Finance and CFO; Mr. Bhavesh Joshi, Senior VP, Domestic Accounts and Taxation. I'll now hand over the call to Mr. Batra for opening remarks. Over to you, sir.
Sandeep Batra
Thank you, Jay, and good afternoon, everybody, on the call. I take great pleasure in taking you through the Q4 and FY '26 results, which were approved by our Board at its meeting yesterday. A quick summary of the performance for the quarter. In the Current quarter, our stand-alone revenue at INR 3,272 crores grew by 15.3% in value terms and was underpinned by underlying volume growth of 15.3%. This compares to underlying volume growth of 9.8% that we had delivered till December and 9.3% UVG that we delivered in FY '25. Both our Consumer and Bazaar and B2B businesses recorded strong UVG. Consumer and Bazaar was 15.4% and B2B was 14.8%. I think the only area line of business that saw some disruption was in exports. Both for Consumer & Bazaar and B2B, where in the month of March because of the conflict in Gulf and West Asia, supply chains were disrupted and our export revenues got impacted. However, till February, the performance had been strong. Our gross margins also improved versus Q4
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