Rising raw material costs may weigh on Pidilite’s near-term margins

Fast-moving consumer goods major Pidilite Industries reported a strong June quarter performance. The company’s consolidated revenue growth was led by the consumer and bazaar (C&B) segment, followed by the business-to-business segment. The operating performance, too, was strong, led by lower costs even as gross margins came in below estimates. Export business, however, saw a decline due to the ongoing conflict in West Asia. Given management’s confidence in revenue growth as well as long-term margins, most brokerages are positive on the company. At the current price (₹1,669), the stock, which has gained about 23 per cent, is trading at 48 times its FY28 earnings estimates.