Pidilite Industries Dividend 2026 — ₹11.50 Per Share, Record Date & Full Analysis

Company & Security Details

Dividend Details

Yield & Outflow

Sustainability Verdict

Pidilite ends FY26 with roughly ₹4,218.73 crore of cash, bank balances and current investments against gross borrowings of only ₹105.91 crore. Free cash flow of about ₹2,235.73 crore covers the entire year's dividend 1.33 times over.

This Is The Second Payout Of FY26

Note 8 to the results is easy to miss but changes the whole picture. The ₹11.50 final dividend is in addition to a special interim dividend of ₹10 per share (pre-bonus) that was already paid on 13th August 2025. FY26 is therefore a two-payout year, not a single-dividend year.

The Bonus Issue Changes The Maths

On 24th September 2025 the company allotted 50,88,57,016 bonus shares in a 1:1 ratio, doubling the share count from 50.88 crore to 101.78 crore. Every ₹1 declared today is therefore paid on twice as many shares as a year ago. A headline that reads "₹11.50 versus ₹20 last year" is wrong unless it is adjusted for this.

Why Ex-Date And Record Date Are The Same

India moved to a T+1 settlement cycle, meaning a trade settles one working day after it happens. Because of that, the ex-date and the record date now fall on the same calendar day. Older articles that say "ex-date is two days before record date" are describing the pre-2023 system and are out of date.

The 78-Day Gap Nobody Talks About

There are 78 days between the record date (23rd July 2026) and the last possible payment date (roughly 3rd September 2026, being 30 days after the AGM) counted from announcement. Your money is committed on the record date but sits with the company until payout. For a ₹11.50 dividend that delay costs you roughly ₹0.13 per share in foregone interest at a 6% annual rate — small, but real.

Yield Reality Check: Why It Is Under 1%

A yield below 1% on a company paying out roughly 68.6% of its profit looks contradictory. It is not. The explanation is entirely on the price side.

Pidilite trades at a trailing P/E in the region of 65 times and a price-to-book near 15 times. When the market pays 65 rupees for every rupee of annual profit, even a generous share of that profit converts into a tiny percentage of the price. The low yield is a valuation outcome, not a stinginess outcome.

Which Of The Four Causes Applies Here?

• Strong dividend growth? Yes — bonus-adjusted payout rose 65% year on year.
• Falling share price? No — the stock is up roughly 7.9% over 52 weeks and 25% off its April 2026 low.
• One-time special dividend? Partly — the ₹10 interim in August 2025 was explicitly labelled "special" and may not repeat.
• Weak business masking a high yield? No — revenue grew 11.11% and EBITDA grew 16.81%.

Verdict: this is a genuine, earnings-supported dividend increase that simply looks small because the stock is expensive.

Consistency Assessment

• Dividend cuts: None in ten years.
• Dividend suspensions: None. FY20 is the only unusual year — the payout came as an interim in March 2020 rather than a post-AGM final, a timing choice made as COVID uncertainty arrived.
• Growth streak: Ten consecutive years of higher declared dividends.
• Ten-year growth rate: from ₹4.75 to ₹16.50 bonus-adjusted is a compound rate of roughly 13.3% a year.
• Special dividends: One in the ten-year window — the ₹10 interim of August 2025.

The Trend Break To Watch

For the seven years to FY23, dividend growth averaged in the low teens and tracked earnings closely. From FY24 onward the pattern changed sharply: +45.5%, then +25.0%, then +65.0%.

Over the same three years, consolidated profit grew far more modestly. This is the company converting a large accumulated cash pile into shareholder returns. It is welcome, but it is a one-way trip — the balance sheet can only be re-based once, and future dividend growth will have to come from earnings growth instead.

Operating Leverage: Working In The Right Direction

Operating leverage simply means whether profits grow faster than sales. Here they do, and clearly:

• Revenue growth: +11.11%
• EBITDA growth: +16.81%
• PAT growth: +17.87%

EBITDA margin expanded from 22.93% to 24.10%, a gain of 117 basis points. Every rupee of extra sales carried more profit than the rupee before it.

Where The Margin Gain Came From

• Materials cost fell as a share of sales. Raw materials, traded goods and inventory movement together came to 44.44% of revenue versus 45.63% a year ago — a 119 basis point gross margin gain.
• Employee cost held flat in ratio terms at 13.30% of revenue versus 13.25%, despite absorbing ₹62.84 crore of one-time provisions under the new Labour Codes.
• Other expenses were disciplined at 18.16% of revenue versus 18.19%.
• Effective tax rate slipped slightly to 25.58% from 25.74%.

Segment Performance

Consumer & Bazaar — the Fevicol, Fevikwik, M-Seal and Dr. Fixit engine — is 79.3% of revenue and earns nearly double the B2B margin. The dividend is effectively funded by this one segment.

The Overseas Drag (Negative Finding)

The auditor's Other Matters note discloses that 32 subsidiaries together contributed revenue of ₹1,347.42 crore and net profit after tax of only ₹116.06 crore before consolidation adjustments.

That is a net margin of 8.6% against the group's 16.92%. The subsidiary portfolio is running at roughly half the profitability of the parent. Associates and the joint venture added a further ₹3.49 crore, while two other associates contributed a loss of ₹5.87 crore. On top of that, exceptional items of ₹13.71 crore in FY26 and ₹24.92 crore in FY25 were impairments on associate investments and loans. Small in absolute terms, but a recurring pattern worth noting.

Test One: Does Cash Follow Profit?

Operating cash flow of ₹2,828.50 crore against profit after tax of ₹2,470.72 crore gives a ratio of 1.14 times.

Anything above 1.0 means the company collected more cash than it booked as profit. Cash conversion measured against EBITDA is 80.4%. This is a clean pass. There is no gap between reported earnings and real money.

Test Two: Receivables Versus Revenue (Negative Finding)

This is the one number in the results that deserves a red flag.

• Revenue growth: +11.11%
• Trade receivables growth: +20.42% (₹1,811.15 Cr to ₹2,181.10 Cr)
• Debtor days: 54.5 days versus 50.3 days

Receivables grew almost twice as fast as sales and absorbed ₹357.54 crore of cash. Inventories, by contrast, grew only 3.12% — so this is not a general working capital blow-out, it is specifically a collections issue. It may reflect channel financing to push volume amid price increases. It has not damaged cash flow this year, but if the gap persists into FY27, it will.

Liquidity Position (Consolidated, 31.03.2026)

Liquid resources rose ₹720.56 crore (+20.6%) during a year in which the company handed ₹1,526.01 crore to shareholders.

Debt Position

Interest cover is roughly 62 times EBITDA to finance costs. Borrowings fell 28% year on year. There is no scenario in which debt servicing competes with the dividend.

Return Ratios (Computed From Audited Filing)

ROE uses profit attributable to owners over equity attributable to owners. ROCE uses EBIT (PBT plus finance costs) over capital employed (total equity plus borrowings plus lease liabilities). Both are computed by ShareBazaar Online from the audited consolidated statements, not taken from a third-party screener.

Balance Sheet Quality Notes

• Goodwill and intangibles: ₹1,287.04 Cr goodwill plus ₹1,555.87 Cr other intangibles equals ₹2,842.91 Cr, or 25.7% of owners' equity. These are acquisition-related and carry impairment risk. Watch this line.
• Capital work-in-progress jumped from ₹128.95 Cr to ₹328.87 Cr, up 155%. A capex cycle is beginning, which will consume future free cash flow.
• Total equity rose from ₹9,957.76 Cr to ₹11,048.65 Cr despite the dividend outflow.
• Book value per share is roughly ₹106.43 on the post-bonus share count.

The Four Sustainability Tests

• Cash position — PASS. ₹4,218.73 Cr of liquid resources against a ₹1,678.84 Cr annual commitment. The company could fund two and a half years of dividends from the balance sheet alone with zero earnings.
• Free cash flow — PASS. FCF of ₹2,235.73 Cr covers the dividend 1.33 times and grew 21.9% year on year.
• Debt — PASS. Borrowings shrank while dividends rose. Net cash of ₹3,801.52 Cr.
• Earnings trend — PASS. Three consecutive years of profit growth; FY26 PAT up 17.87% with margin expansion.

The Honest Qualifier

"Sustainable" applies to the ₹11.50 final dividend. It does not automatically apply to the full ₹16.50 bonus-adjusted level repeating every year.

At 68.55% payout, Pidilite is retaining only 31.45% of profit for reinvestment. Capital work-in-progress is up 155%, signalling a capex cycle. If capex rises toward ₹900–1,000 crore a year while raw material costs stay elevated, FCF coverage of 1.33 times becomes tight.

Base case for FY27: the ₹11.50 final is safe and likely to grow. Treat a repeat special interim as possible but unproven.

Wider Peer Set

Pidilite's genuine competitive set spans several listed names in adhesives, construction chemicals and building materials — Berger Paints India, Akzo Nobel India, Kansai Nerolac, Astral, Supreme Industries and Grasim's paints venture.

For those companies, comparable FY26 dividend yield, payout ratio, ROE, ROCE and cash position figures have not been independently verified at the time of writing. We do not publish numbers we have not checked. Where a figure is unavailable, this report states so rather than filling the gap.

The Sector Yield Context

Indian consumer-facing materials and specialty chemicals companies typically yield in a 0.7% to 1.5% band. They are held for compounding, not income.

Against that backdrop, Pidilite's 1.04% bonus-adjusted yield is unremarkable, and its 0.73% recurring yield sits at the bottom of the band. The differentiator is not yield — it is the 23.79% ROE and the net cash balance sheet behind it.

What This Concentration Means

Roughly seven out of every ten rupees distributed goes to the Parekh promoter family. For the FY26 year as a whole, that is approximately ₹1,163 crore of promoter dividend income.

This is not automatically a criticism. High promoter ownership means promoter and minority interests are aligned on the same instrument — every rupee they receive, you receive proportionally on your holding. There is no dual-class structure, no differential voting, and no preferential payout mechanism at work here.

The Question Worth Asking

The legitimate concern is motive, not mechanics. When a promoter group owns 69.3%, a large dividend is also a large promoter liquidity event. The sharp acceleration in payout since FY24 (+45.5%, +25.0%, +65.0%) coincides with a period when the company was accumulating cash faster than it could deploy it.

The counter-evidence is strong: the payout is covered by free cash flow, cash reserves still grew, and capex is rising rather than being starved. There is no sign that distributions are coming at the expense of the business. But promoter holding trend is worth watching alongside payout ratio.

1. Raw Material Cost Shock

Management has publicly flagged that key input costs rose 40–50% on average on the back of West Asian geopolitical disruption. Pidilite's core inputs are vinyl acetate monomer and other crude-linked derivatives. FY26's 119 basis point gross margin gain was earned before the full pass-through of this shock. FY27 margins face the real test.

2. Receivables Stretching

Trade receivables grew 20.42% against revenue growth of 11.11%, pushing debtor days from 50.3 to 54.5. The allowance for doubtful debts and advances also rose to ₹20.56 crore from ₹21.42 crore. If price-led growth is being supported by looser credit to the trade channel, cash conversion will deteriorate before revenue does.

3. Subsidiary Portfolio Underperformance

Thirty-two subsidiaries generated ₹1,347.42 crore of revenue but only ₹116.06 crore of profit — an 8.6% margin against the group's 16.92%. Impairment charges on associate investments and loans have now appeared for two consecutive years (₹13.71 crore in FY26, ₹24.92 crore in FY25). With ₹2,842.91 crore of goodwill and intangibles on the books, a larger write-down is not unimaginable.

4. Payout Ratio Leaves Limited Headroom

At 68.55% of profit distributed, only 31.45% is retained. Meanwhile capital work-in-progress is up 155% to ₹328.87 crore, meaning capex is accelerating. A company cannot indefinitely fund a rising capex cycle and a 68% payout from the same 100% of profit unless earnings grow to match.

5. B2B Segment Losing Relative Pace

Business-to-Business revenue grew 7.21% against Consumer & Bazaar's 11.38%. In the March quarter, B2B growth slowed further to 7.0% versus C&B's 15.0%. B2B carries a segment margin of 16.48% against C&B's 30.64%, so the mix shift is currently margin-accretive — but a structurally weak B2B narrows the growth runway and increases dependence on a single segment.

6. Valuation Risk To Total Return

A trailing P/E near 65 times and price-to-book near 15 times means the dividend contributes almost nothing to total return. At a 0.73% recurring yield, roughly 99% of your outcome depends on the share price. Any de-rating toward the sector average would swamp several years of dividend income.

7. Approval And Timing Risk

The ₹11.50 is a recommendation, not a declaration, until the 57th AGM on 4th August 2026 approves it. Approval is near-certain given 69.3% promoter holding, but the payment obligation legally crystallises only after that vote.

8. Regulatory Cost Creep

The four new Labour Codes notified on 21st November 2025 forced recognition of ₹39.82 crore towards gratuity and ₹23.02 crore towards compensated absences, plus ₹16.76 crore in other expenses for contract and outsourced workers — roughly ₹79.60 crore in total. The company states it continues to monitor final Central and State Rules, meaning the cost is not yet fully quantified.

Positives

• Dividend fully funded by operating cash flow — 1.33x FCF coverage on the full year.
• Net cash balance sheet of ₹3,801.52 crore with borrowings falling 28%.
• Cash reserves grew ₹720.56 crore in the same year as ₹1,526.01 crore of dividends were paid.
• Genuine operating leverage: revenue +11.11%, EBITDA +16.81%, PAT +17.87%.
• Ten consecutive years of dividend growth with no cut or suspension.
• Return on equity of 23.79% and ROCE around 30.85% — both above the paint and coatings peer benchmark.
• Auditor issued an unmodified opinion on both standalone and consolidated results.

Negatives

• Post-tax yield for a 30% slab investor is roughly 0.50% — below a savings account.
• Receivables grew 20.42% against revenue growth of 11.11%; debtor days up 4.2 days.
• Payout ratio of 68.55% leaves thin headroom against a capex cycle that is clearly starting.
• Thirty-two subsidiaries earn an 8.6% net margin against the group's 16.92%.
• Associate impairments in two consecutive years; ₹2,842.91 crore of goodwill and intangibles at risk.
• The ₹10 interim was labelled "special" — the recurring yield is only 0.73%.
• B2B growth of 7.21% lags C&B's 11.38%, narrowing the growth base.