Pidilite Industries (PIDI IN) – Q2FY27 Result Update – Strong growth outlook, margin volatility likely – ACCUMULATE
Published on 29 Oct 2026
PIDI delivered a mixed 2Q performance, with healthy 11.1% UVG in C&B, offset by a 352bps YoY contraction in EBITDA margin due to elevated input costs. While we expect sequential margin recovery in 3Q (usage of lower cost RM procured in 1Q), current trend in crude prices signals margin pressure in 4Q and volatile times. Demand remains resilient, with the 2Q momentum sustaining into 3Q across both B2B and C&B segments. VAM prices have rebounded ~34% from recent lows and remain elevated amid the ongoing Middle East crisis. We expect ~250 bps QoQ Gm expansion in Q3.
We believe PIDI is well positioned to sustain growth, driven by continuous innovation, strategic tie-ups to launch technologically advanced products, and 2–4x growth in pioneer and growth categories (~50% of sales). We estimate 16.5% EPS CAGR over FY27–29 and value the stock at 45x Sep’28 earnings, arriving at a TP of Rs1600 (Rs1739 earlier at 50x Jun’28 earnings). We expect steady returns with stock trading at 37.6xFY29 EPS. Retain Accumulate.
