Pidilite trims ad spends as input costs squeeze Q2 margins

Pidilite's revenue rose 20.9% to ₹4,297.59 crore in Q2, but costlier inputs capped profit growth at 7.2% and A&P spends were trimmed.

by e4m Staff
Published: Oct 29, 2026 3:48 PM | 2 min read

Pidilite trims ad spends as input costs squeeze Q2 margins

Pidilite Industries reported a 20.9% increase in consolidated revenue for Q2 FY27, reaching ₹4,297.59 crore, while net profit rose only 7.2% to ₹626.46 crore, indicating a widening gap between revenue growth and profit margins.
The company's EBITDA grew by just 3.1% to approximately ₹878 crore, impacted by a 38.3% increase in material costs, which accounted for 51.4% of revenue, leading to a decline in EBITDA margin by about 350 basis points.
Standalone revenue increased by 21.5% to ₹3,994.57 crore, driven by a 10.7% volume growth, although pricing adjustments were necessary to offset rising input costs.
Pidilite's advertising and promotion spending decreased by 11.8% to ₹132 crore, representing 3.1% of revenue, while employee costs rose 8.6%, indicating a focus on margin protection amid cost pressures.

Pidilite Industries, the company behind Fevicol, Dr. Fixit, M-Seal and Fevikwik, has delivered a Q2 FY27 in which the top line sprinted and the bottom line struggled to keep up. In results filed with the exchanges on October 28, the company reported consolidated revenue from operations of ₹4,297.59 crore, up 20.9% from ₹3,554.44 crore a year ago. Net profit, however, rose just 7.2% to ₹626.46 crore from ₹584.60 crore.

The gap between the two lines is the story. Pidilite added roughly ₹743 crore in revenue, yet EBITDA grew by only about ₹27 crore, a 3.1% rise to around ₹878 crore. The pressure came from input cost inflation. Material costs, covering raw materials consumed, stock-in-trade purchases and inventory changes, jumped 38.3% to ₹2,210.88 crore and swallowed 51.4% of revenue against 45% last year. EBITDA margin slipped by roughly 350 basis points as a result.

Demand, meanwhile, holds up. Standalone revenue grew 21.5% to ₹3,994.57 crore on underlying volume growth of 10.7%, as per the company's earnings presentation. That means pricing and mix did much of the heavy lifting, and even those gains could not fully cover costlier inputs.

The line that should interest the creative community is advertising and sales promotion. Pidilite's consolidated A&P spend fell 11.8% to roughly ₹132 crore from about ₹150 crore, which works out to around 3.1% of revenue against 4.2% a year ago. Employee costs rose 8.6% to ₹511.09 crore, well below the pace of sales. Even so, the savings could not offset the material cost surge. For agencies handling Pidilite's brands, the dip looks more like margin protection than a retreat from brand building, but one quarter does not make a trend.

The squeeze was visible across the portfolio. On a standalone basis, Consumer and Bazaar, the segment selling adhesives, sealants and construction and paint chemicals to retail users such as carpenters and painters, saw revenue rise 20.7% to ₹3,197.82 crore. Segment profit, however, inched up only 2.5% to ₹840.99 crore. Business to Business, which serves large industrial users, grew revenue 21.8% to ₹820.37 crore while segment profit slipped 3.4% to ₹115.37 crore. Underlying volume growth was 11.1% and 9.2% respectively.

The first half still looks sturdy, with consolidated revenue up 21.1% to ₹8,849.14 crore and net profit up 19.6% to ₹1,509.97 crore. Q2, though, reads as a cost story rather than a demand story, and the creative fraternity will be watching whether Pidilite's brand budgets follow its volumes or its margins once input costs settle.