Margin gains ahead for Pidilite on lower crude prices, stronger rupee

After Q2FY19, analysts had cut their earnings estimates of consumer firms, amid higher input costs on the back of high oil prices and a weakening Rupee

Prices of many crude oil-linked commodities are declining after a sharp correction in fuel prices. This, along with the strengthening rupee, has created margin tailwinds for many consumer players, such as Pidilite Industries (Pidilite). Prices of most raw materials of Pidilite are linked to crude oil.

After the September 2018 quarter (Q2FY19), many analysts had cut their earnings estimates of many consumer firms, including Pidilite, amid higher input costs on the back of elevated crude oil prices and a weakening rupee.

Pidilite’s management, too, had indicated that input cost pressure could weigh on the firm’s gross margin. However, the recent input cost