Pidilite plans to pass on lower input costs as Q1 sales rise

Synopsis

Pidilite Industries has raised prices across its product portfolio due to rising raw material costs. The company implemented between one and three price hikes, depending on product categories. With recent raw material price cool-offs, Pidilite is open to price reductions for consumers. Sales volumes grew over eleven percent in the June quarter, showing strong company performance. Pidilite is also diversifying raw material sourcing to enhance supply chain resilience.

Pidilite Plans to Pass on Drop in Input Costs as Q1 Sales Rise

MUMBAI –Pidilite Industries has implemented up to three price increases across its product portfolio due to rising raw material costs caused by the West Asia conflict, according to managing director Sudhanshu Vats. However, with raw material prices beginning to ease, the company is open to reducing prices as well, he said.

The maker of ‘Fevicol’ has increased prices by 2% to 12% across its Consumer and Bazaar portfolio, while hikes in the industrial business have been sharper. Prices of some products were raised twice or thrice, depending on their category.

“Prices have come down for a few of our categories, so what we do there is pass on the rebate to the trade (segment), because we always believe that if the demand remains intact with them, and they will sell well, we will sell well,” Vats said on Thursday.

Also Read: Pidilite sees double-digit volume growth in FY27 despite volatile commodity prices: MD Sudhanshu Vats

For the June quarter, Pidilite reported a 11.3% year-on-year growth in sales volumes, while value growth was about 10%, helping the company clock more than 21% growth in consolidated revenue.

For Pidilite, the West Asia crisis has increased prices of a mix of raw materials, including vinyl acetate monomer, which is used for adhesives. It has also raised the prices of butyl acrylate, styrene and toluene, according to Vats, in part due to availability and logistics issues.

To shield itself from supply shocks and make operations more resilient, Pidilite has been sourcing raw materials from diversified sources -– both in terms of companies and geographies. The recent LNG shortage prompted Pidilite to establish a buffer of feedstock to support its packaging material vendors.

Pidilite has guided that its underlying volume growth will remain in double digits for the current fiscal, while margins will be in the 20-24% range. Margins for the June quarter improved by 120 basis points year-on-year to 26.3%.

Vats said the company has passed on some of the increase in raw material costs to consumers while absorbing the rest. “Demand tends to remain steady if the margin which we enjoy on the local competitors--particularly for us-- is in the band of about 12 to 15%,” he said.