Pidilite Hikes Prices by up to 5% in October and Flags Further Revisions as Input Costs Flare
Pidilite Industries, the country’s leading manufacturer of adhesives and construction chemicals, has rolled out a fresh round of price hikes ranging between 3% and 5% in October. The maker of Fevicol and Dr. Fixit also warned that it could implement another price increase of 2% to 3% in the January–March quarter (Q4) if crude oil derivatives and raw material inflation continue to escalate.
Speaking during a press briefing, Sudhanshu Vats, Managing Director of Pidilite Industries, highlighted that the company has taken proactive pricing measures across categories while closely tracking global geopolitical developments and cost movements.
Sharp Swings in Key Raw Materials
The latest price revision follows significant volatility in vinyl acetate monomer (VAM), the primary feedstock used in polyvinyl acetate (PVAc) adhesives.
VAM prices, which hovered near $800 to $900 per tonne in the previous year, surged to around $2,000 per tonne earlier this year following disruptions and geopolitical instability in West Asia. While spot prices temporarily cooled to between $900 and $1,000 at the start of the September quarter, Pidilite’s consumption cost for VAM climbed to approximately $1,600 per tonne in the second quarter, up from about $880 in the preceding quarter.
The company had previously introduced price increases in the June quarter, offered selective rebates as spot prices softened, and subsequently rolled back rebates and enacted price hikes as input costs surged anew. Channel checks indicate that earlier in October, Pidilite raised prices by ₹5 per kg across prominent Fevicol variants, including Fevicol SH, Marine, MR, and Probond.
Resilient Demand Defends Margins
Despite cumulative price increases throughout the calendar year, consumer demand across building chemicals and adhesives has remained sturdy.
For the quarter ended September 30, Pidilite delivered:
- A 21% year-on-year climb in consolidated revenue to ₹4,298 crore.
- A 6% year-on-year increase in net profit to ₹615 crore, absorbing a 29% rise in operating expenses.
- Robust underlying volume growth of 10.7%, led by a 20.7% expansion in its core Consumer & Bazaar division.
Management pointed out that operating margins have effectively bottomed out, expressing confidence in sustaining operating profitability towards the upper band of its guided 20% to 24% threshold during the second half of the fiscal year.
Outlook for Investors
The ongoing price actions demonstrate Pidilite’s strong moat and ability to pass on cost increases to retail and trade channels without denting volume momentum. However, market participants will be watching the fourth-quarter trajectory of crude prices and petrochemical derivatives closely. While Pidilite has not observed acute secondary inflation across unrelated crude derivatives yet, any prolonged spike in global energy prices could test the frequency of consumer price absorption over the coming quarters.
