Financial Results (Standalone & Consolidated)

Q2 FY27 Standalone Performance:

  • Revenue: Nearly ₹4,000 crores
  • Revenue Growth: 21.7% year-over-year (nominal terms)
  • Underlying Volume Growth (UVG): 10.7% (broad-based)
  • Consumer and Bazaar UVG: 11.1%
  • B2B UVG: 9.2%
  • Gross Margins: Declined sequentially and year-over-year due to input cost inflation
  • Gross Margin Decline: 720 basis points year-over-year
  • EBITDA Margin: 20.4% (lower end of company's range)
  • VAM Consumption Rate: $1,630/ton (nearly double same period last year, vs $1,370 in Q1)

H1 FY27 Standalone Performance:

  • Revenue Growth: 22% year-over-year
  • UVG: 11%
  • Consumer and Bazaar UVG: 11.6%
  • B2B UVG: 8.3%
  • EBITDA Margin: 23.5% (upper end of company's range)

Subsidiary Performance:

  • International Subsidiaries Growth: 21.8%
  • Strong growth in Dubai, Bangladesh, Kenya, Thailand (all >20% growth)
  • International Subsidiaries EBITDA Growth: 53% vs 21.8% revenue growth
  • Domestic Subsidiaries Growth: 22.2%
  • Consumer and Bazaar Businesses Growth: 22%
  • B2B Businesses Growth: 22%
  • Nina Business: Faced challenges due to inadequate workfront for waterproofing

Management Commentary & Strategic Updates

Input Cost Environment:

  • Experienced significant raw material inflation, particularly in VAM (Vinyl Acetate Monomer)
  • VAM prices surged to nearly $2,000/ton after West Asia conflict, then cooled to ~$1,000, before rising again
  • Current VAM price: ~$1,200/ton
  • Crude oil elevated at ~$115/barrel
  • Multiple raw materials have crude linkage

Pricing Strategy:

  • Implemented price increases in Q1 (12-15% across various products)
  • Implemented additional 3-5% price increase on October 1, 2026
  • Price increases applied to major brands including Fevicol and Dr. Fixit
  • Considering another round of price increases towards end of Q3 or early Q4
  • Pricing philosophy: Maintain premium to market while prioritizing demand and growth

Margin Outlook:

  • Confident in achieving H2 EBITDA margins in the 20-24% corridor
  • Expect to deliver at slightly higher end of the corridor
  • Q1 FY27 EBITDA margin was 26.3%

Volume Growth Trends:

  • Sustained double-digit underlying volume growth for 6-8 consecutive quarters
  • Urban growth slightly ahead of rural growth in Q2 (first time after long period)
  • Rural growth holding steady
  • Target to increase UVG from double-digit to early teens over medium term

Innovation & Product Development:

  • Araldite Wud and Araldite Stone X: New products for premium wood and stone segments
  • Fevicol Multi Lock and X-Per: Going national in November 2026
  • Dr. Fixit Wonderproof: Performing well with high drying time and waterproofing flexibility
  • M-Seal Advance: New product with easier hand washing, low VOC, universal application
  • Stainoff: Getting good response on quick commerce platforms

Construction Chemicals Business:

  • Robust growth in Dr. Fixit, Roff tile adhesives, grouts, and Tenax marble/tile care
  • Momentum building in floor coating business
  • Projects business pipeline healthy with segment-based approach (residential, commercial, hotels, hospitals, education institutions, EPC contractors)
  • Transitioned from small/medium projects to large projects classification

AI Implementation:

  • Top 30 leaders completed hands-on AI workshop
  • Company-wide AI hackathons underway
  • Using AI for front-end effectiveness, content customization, influencer management
  • Exploring AI in manufacturing for material variances and supply chain optimization
  • Focus on effectiveness first, productivity improvements as Phase 2

Competitive Landscape:

  • No fundamental shift in competitive intensity
  • Competitors include both large companies and local players across different segments
  • No significant exits from local players despite input cost inflation

Raw Material Exposure:

  • Bulk of raw materials linked to crude oil (both raw materials and packaging)
  • Linkage not instantaneous - affected by demand/supply dynamics and other factors
  • VAM represents approximately 10% of raw material basket

Pioneering & Growth Categories:

  • Grupopuma JV: External renders with pilots in North India
  • Footwear adhesives: Preparing for expected manufacturing growth in India
  • Electronics and auto segments: Developing specialized applications
  • Wall finishes: New category development
  • ICA Pidilite: Wood finishes now established growth category

Geographic Performance

  • Demand environment broad-based across regions
  • Urban growth showing resurgence, slightly ahead of rural in Q2
  • Rural growth holding steady
  • Exports to West Asia underperforming due to supply chain challenges

Subsidiary Performance Details

  • International subsidiaries showing strong growth across multiple regions
  • Domestic subsidiaries performing well except for monsoon-affected Nina business
  • New products through joint venture route gaining good market traction

Operational Highlights

  • Supply chain managing material availability despite global disruptions
  • Continued focus on brand building with new campaigns for major brands
  • Field marketing and technology infusion supporting growth
  • Segment-based approach in projects business yielding results