Pidilite Industries Limited , a leading adhesives manufacturer, has disclosed that its subsidiary, Nina Percept Private Limited, has received a penalty order from GST authorities. The penalty, amounting to Rs 1,97,11,453, was imposed under the Central Goods and Services Tax Act for the period covering FY2018-19 to 2020-21.

Updated Penalty Order Details

Company's Response and Legal Options

Pidilite Industries has confirmed that the order is appealable, and the company is currently reviewing it to determine the appropriate course of action. The company has indicated that it will make an assessment to exercise its right to appeal to the highest authority as permitted by law.

The company noted that upon examining the order and ascertaining full facts, the intimation is being filed at the earliest opportunity, demonstrating its commitment to regulatory compliance and transparency.

Financial and Operational Impact

According to the company's disclosure, there is no material impact on its financials, operations, or other activities as a result of this penalty order. Pidilite has assured stakeholders that it is treating the matter with due diligence and will conduct a thorough assessment before deciding on the next steps.

Regulatory Compliance and Disclosure

In compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Pidilite Industries has promptly informed the stock exchanges about this development. The company has also stated that this information is being hosted on its official website at www.pidilite.com .

As the situation develops, stakeholders will be monitoring how Pidilite Industries and its subsidiary address this regulatory matter through the available legal channels.

Pidilite Industries , a leading adhesives manufacturer, has reported a strong performance for the second quarter of fiscal year 2026, with standalone revenue reaching INR 3,272.00 crores, marking a 10.4% value growth compared to the same period last year.

Consumer and Bazaar Segment Leads Growth

The Consumer and Bazaar segment, a key driver of Pidilite's performance, achieved an impressive 10.4% underlying volume growth (UVG), entering double-digit territory after five quarters. This segment's robust performance indicates a resurgence in consumer demand for Pidilite's products.

B2B Segment Shows Resilience

The Business-to-Business (B2B) segment also demonstrated strength, recording a 9.9% underlying volume growth. However, the export business faced challenges due to geopolitical uncertainties and tariffs in some markets, resulting in a decline.

Margin Improvement and Strategic Investments

Pidilite's gross margins improved by 0.5% in Q2 FY26, primarily due to benign input prices. The consumption rate of Vinyl Acetate Monomer (VAM), a key raw material, was $883.00 per ton compared to $980.00 in the same quarter last year. This margin expansion allowed the company to significantly increase its advertising and sales promotion expenditure, which rose by 80% in absolute terms.

Financial Highlights

Subsidiary Performance

Domestic subsidiaries reported a revenue growth of 10.7% with a significant 22.6% EBITDA growth. International subsidiaries saw a more modest 4.5% revenue growth.

Consolidated Performance

On a consolidated basis, Pidilite's revenues reached INR 3,540.00 crores, representing a 9.8% growth. EBITDA margins remained stable compared to the same period last year.

Market Dynamics

Rural markets continue to outperform urban markets for Pidilite, a trend observed over the past 16 to 20 quarters. However, urban performance has shown improvement in Q2 FY26, particularly in the construction sector growth brands.

Management Commentary

Sudhanshu Vats, Managing Director of Pidilite Industries, expressed confidence in maintaining double-digit underlying volume growth. He stated, "We are seeing clear traction when it comes to joinery. Our focus on demand generation is extremely high, and our go-to-market strategy is focused on generating demand."

Outlook

The management expects input costs to remain benign for the next 6 months. They are also optimistic about the construction sector growth, which could benefit from recent GST rate reductions on cement and certain construction materials.

Pidilite's strong performance in Q2 FY26, despite challenges in the export market, demonstrates the company's resilience and effective strategy in navigating market dynamics. The continued focus on demand generation and portfolio diversification positions Pidilite well for sustained growth in the coming quarters.