Pidilite margin drops sharply as expenses rise despite 21% revenue growth
Sequential revenue fell 5.58% while expenses increased 1.86%, reversing the margin recovery seen in Q1FY27.
Filed 28 Oct 2026, 18:54 IST · after market close · Pidilite Industries Ltd (PIDILITIND)
Key takeaways
- Consolidated operating margin fell 5.81 percentage points sequentially to 20.42% as revenue declined 5.58% while expenses rose 1.86%.
- Despite revenue growth of 20.91% year on year, expenses grew faster at 26.50%, cutting operating margin by 3.51 percentage points.
- Net profit rose only 7.16% year on year to Rs 626.46 cr, with other income contributing 8.33% of pre-tax profit and the tax rate easing 0.84 percentage points.
Price around the results
Q2FY27 growth came with weaker operating conversion
Pidilite's consolidated revenue grew 20.91% year on year, but operating profit increased only 3.14% because expenses rose 26.50%. Sequentially, revenue fell 5.58% and operating profit dropped 26.50%, making the quarter materially weaker than Q1FY27. Net profit still grew 7.16% year on year, helped by lower interest and a 0.84 percentage-point reduction in the tax rate.
Costs drove the 5.81-point sequential margin decline
Expenses increased 1.86% sequentially even as revenue declined 5.58%, so operating margin narrowed 5.81 percentage points to 20.42%. The year-on-year picture shows the same pressure: costs grew 26.50% against revenue growth of 20.91%, reducing margin by 3.51 percentage points. Other income was 8.33% of pre-tax profit, so reported profit had a meaningful non-operating contribution.
Margin reversal follows Q1FY27 recovery
Operating margin had recovered to 26.23% in Q1FY27 from 23.24% in Q4FY26, but fell to 20.42% in Q2FY27, the lowest level in the quarters shown. The company remained 5.79 percentage points above the 14.63% median margin of 35 Commodities-sector peers that had reported the same quarter. This makes the sequential deterioration notable even though Pidilite's margin remained above the sector median.
Results were filed after market close
The results were filed after market close, so there is no reported market reaction yet. Across the previous eight result reactions, the stock rose seven times and fell once, with a median absolute move of 2.28%; that history provides the context for the eventual response but does not establish the current reaction.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,298 cr | ₹4,552 cr | -5.58% | +20.91% |
| Other income | ₹70 cr | ₹109 cr | -36.07% | +39.55% |
| Expenses | ₹3,420 cr | ₹3,358 cr | +1.86% | +26.50% |
| Operating profit | ₹877 cr | ₹1,194 cr | -26.50% | +3.14% |
| Operating margin (%) | 20.42% | 26.23% | — | — |
| Interest | ₹13 cr | ₹13 cr | -4.80% | -4.37% |
| Depreciation | ₹100 cr | ₹97 cr | +2.85% | +0.11% |
| Profit before tax | ₹834 cr | ₹1,192 cr | -30.01% | +5.96% |
| Tax | ₹208 cr | ₹308 cr | -32.65% | +2.50% |
| Net profit | ₹626 cr | ₹884 cr | -29.09% | +7.16% |
| EPS (₹) | ₹6.04 | ₹8.57 | -29.52% | +6.15% |
Operating margin of 20.42% compares with a Commodities sector median of 14.63% across 35 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from 20.42% after the 5.81 percentage-point sequential decline.
- Whether expenses continue to grow faster than revenue, after rising 26.50% year on year versus 20.91% revenue growth.
- Whether other income remains a material contributor after accounting for 8.33% of pre-tax profit.