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Informist, Monday, Aug. 4, 2025

By Narayana Krishna

HYDERABAD - A revival in urban demand and improved volumes are likely to help Pidilite Industries Ltd. report high single-digit growth in its June quarter earnings, according to analysts. The adhesives and specialty chemicals manufacturer is expected to outperform the decorative paints industry earnings growth in the June quarter due to favourable input costs, analysts said.

They project Pidilite Industries' consolidated net profit at INR 6.1 billion on revenue of INR 36.6 billion for the June quarter, both seen up 8% year-on-year, according to the average of the estimates of six brokerages. Compared to the previous quarter, Pidilite's net profit is seen up 45% and revenue seen rising 16%, the estimates show.

Among the earnings projections, Nuvama Wealth Management Ltd. has the lowest net profit estimate of INR 5.97 billion for Pidilite, and Kotak Institutional Equities has the highest at INR 6.28 billion. For revenue, the lowest estimate is INR 35.14 billion by Dolat Capital Market Pvt. Ltd., and the highest is INR 37.36 billion by Motilal Oswal Financial Services Ltd. The company is scheduled to announce its June quarter earnings on Wednesday.

"Overall, we estimate consolidated revenue growth of 9% on year. The Q1 (Apr-Jun) revenue growth print is robust and continues to be significantly ahead of the decorative paints industry growth by 600-800 bps (basis points)," Kotak said in its pre-earnings note. It expects the adhesive maker's gross margins to improve 45 basis points on year, led by a fall in raw material prices, including vinyl acetate monomer — a key raw material used in adhesives.

Motilal Oswal expects an overall demand recovery in the June quarter, though rural growth continues to outperform urban growth. The brokerage expects the company's consolidated revenue to rise 10% on year and volume to grow 12% during the current quarter. Nuvama sees Pidilite reporting 7.7% on-year growth in revenue, led by overall volume growth of 9% for the quarter.

Despite favourable input costs, analysts project a mixed view on Pidilite's June quarter earnings before interest, tax, depreciation and amortisation margins, as a high base and product mix are likely to weigh on the margin profile on an on-year basis. While Dolat Capital expects Pidilite's June quarter EBITDA margin to improve by 10 bps on year to 24%. However, ICICI Securities sees a 41 bps on year fall in EBITDA margin to 23.5%, while Nuvama expects a decline of 94 bps to 23%. The average of estimates from six brokerages for the company's Apr-Jun EBITDA is pegged at INR 8.7 billion.

Analysts await the outlook on domestic and international demand and expansion of the distribution network. At 1344, shares of Pidilite Industries were trading at INR 2,951.10 on the National Stock Exchange, up nearly 3.3%. The stock has fallen nearly 0.4% since the company announced its March quarter earnings.

Of the seven brokerage reports on the company available with Informist, five have a 'buy' rating with an average target price of INR 3,444; two brokerages have a 'hold' rating with a target price of INR 3,078.

Following are the Apr-Jun earnings estimates for Pidilite Industries Ltd. based on reports from six brokerage firms in the descending order by the estimate of net profit:

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IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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