Pidilite Industries has increased prices by Rs 5 per kg across its Fevicol adhesive products in October, marking the third price increase this year, according to channel checks. The latest increase comes amid a sharp rise in input costs, with raw material prices reportedly increasing by 40-50%.
The October price increase applies to several Fevicol products, including Fevicol Moist Resistant (MR), Fevicol SH Synthetic Resin Adhesive, Fevicol Marine and Fevicol Probond.
The latest hike follows two earlier price increases this year. Pidilite raised prices by Rs 10 per kg in May-June and subsequently increased them by Rs 26 per kg in July. The company implemented a discount of Rs 10 per kg in August before raising prices again in October.
The latest round of price increases comes as manufacturers face pressure from rising costs of crude-linked raw materials.
Raw Material Costs Rise 40-50%
The increase in input costs is being driven by higher prices of vinyl acetate monomer (VAM) and other crude-linked products, according to channel checks.
VAM is a key raw material used to manufacture polyvinyl acetate (PVAc), a polymer used in adhesives such as Fevicol. An increase in VAM prices can therefore push up manufacturing costs for adhesive makers.
The rise in raw material costs comes against the backdrop of geopolitical tensions in the Middle East, which have contributed to cost pressures across several industries.
Fevicol A Key Revenue Contributor
Fevicol is a key brand for Pidilite Industries, accounting for around 40% of the company's revenue, according to the information available. The adhesive portfolio is also a high-margin business, with margins of around 24%.
Pricing decisions in the Fevicol portfolio are therefore significant for the company's revenue and profitability, particularly when input cost inflation puts pressure on margins.
What Has The Company Said?
Pidilite has not commented on the latest price increases in September-October.
Earlier, the company had said it implemented price increases of around 12% across its products during the June quarter, citing the impact of the Middle East conflict.
The latest increase indicates continued pricing action amid elevated input costs. The extent to which these hikes offset raw material inflation, and their impact on demand and margins, will be key factors to watch in the coming quarters.
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