Three companies reported results this quarter from completely different corners of the building materials industry. Pidilite – the adhesives giant, maker of Fevicol and Dr. Fixit – posted revenue of ₹4,552 crore, up 21% year on year, with EBITDA margin of 26.6%, above its own stated guidance corridor of 20 to 24%. Astral Limited – primarily a pipes company that has been building an adhesives business – reported domestic adhesive sales growth of 24.9% year on year. Kajaria Ceramics – a tile company – reported its adhesives segment revenue nearly doubling to ₹45 crore from ₹25 crore a year ago.
One category. Three very different companies. All reporting the same signal in the same quarter.
Adhesives and construction chemicals are not a slow-growth add-on category. They are one of the fastest-growing segments in building materials right now, and the financial results of Q1 FY27 have made that emphatically clear.
The question this article is asking is a blunt one: if the category is growing this fast, why are so many dealers still treating it as a low-margin afterthought?
What the Numbers Are Actually Saying
Before making the dealer argument, it is worth being precise about what these three data points collectively represent – because each one tells a slightly different part of the same story.
Pidilite’s 26.6% EBITDA margin is the headline number from India’s dominant adhesives brand, and it matters because it sits above the company’s own guided range. That is not a one-off – Pidilite’s Consumer and Bazaar segment, which includes tile adhesives, waterproofing compounds, and construction chemicals sold through retail channels, grew 22.5% in revenue with underlying volume growth of 12.2%. The volume growth number is important: this is not just a price story. Demand for adhesive products is genuinely expanding, and it is expanding in the retail and construction channel that dealers serve.
Astral’s 24.9% domestic adhesive sales growth is significant for a different reason. Astral is not Pidilite – it does not have Fevicol’s brand recall or its decades of retail distribution depth. What Astral has is a growing, professionally managed adhesives business being built alongside its core pipes business. When a company that started in pipes and is now reporting nearly 25% adhesive growth in a single quarter, that is a market share signal – not just a Pidilite phenomenon but a category phenomenon that multiple organised players are benefiting from.
Kajaria’s adhesives number – ₹45 crore in Q1 FY27 versus ₹25 crore a year ago – is perhaps the most revealing for the tile industry specifically. Kajaria is a tile company. Its adhesives business exists because tiles and adhesives are sold together at the same dealer counter, specified together in the same project brief, and used together on every installation. The fact that Kajaria’s adhesives revenue nearly doubled in a year – growing almost four times faster than its tile segment revenue – tells you something critical about where the category opportunity actually sits.
Why Adhesives Are Growing Faster Than Tiles Right Now
There are three structural forces driving adhesive demand above tile demand growth, and understanding them helps explain why the category opportunity is durable rather than a one-quarter phenomenon.
The first is the shift from sand-cement bedding to adhesive-based tile fixing. India has historically fixed tiles using a wet sand-cement mix applied by a mason. This method is labour-intensive, has higher failure rates especially in wet areas, and cannot be used with large-format tiles because the weight and size make traditional bedding impractical. The penetration rate for adhesive-based fixing in South India already exceeds 62% of all tile installations – significantly higher than the national average of 48%. As tile formats get larger – the 800×1600 and 1200×2400 slabs that premium residential buyers increasingly specify – adhesive fixing becomes mandatory rather than optional. Every market that premiumises its tile selection simultaneously premiumises its adhesive requirement.
The second force is quality awareness at the mason and contractor level. Adhesive manufacturers – led by Pidilite and followed by Saint-Gobain, Laticrete, and now Astral – have invested heavily in mason training and certification programmes. A mason who knows how to properly use tile adhesive specifies it consistently. A mason who has only ever worked with sand-cement may avoid adhesive for cost reasons but will use it when the project specification demands it. The decade-long investment in mason education across the industry is now paying dividends in consistent adhesive demand growth.
The third force is the commercial construction and GCC fit-out wave. Office spaces, hospitality projects, and commercial interiors use adhesive-fixed tile almost without exception – the finish quality standards and the large-format specifications involved make it non-negotiable. As institutional investment flows into office and commercial construction, the adhesive demand that follows is proportionally higher than in standard residential applications.
All three of these forces are structural and accelerating, not cyclical or temporary.
The Dealer Margin Misconception That Is Costing Real Money
Here is the argument that needs to be made directly: most tile dealers in India underinvest in adhesives because they believe the margin isn’t worth the effort. They stock one or two adhesive SKUs, keep minimal inventory, and treat it as a convenience product rather than a growth category. When a customer asks for adhesive, they sell whatever is on the shelf. When they run out, they order more. There is no active merchandising, no staff knowledge investment, no category management.
This thinking is built on a misreading of the margin arithmetic.
The gross margin on tile adhesive for a dealer is typically in the 12 to 18% range – not dramatically different from many tile categories and significantly better than economy-segment ceramic tiles. But the margin-per-transaction comparison misses the real opportunity. Adhesive is not a standalone purchase – it is bought alongside tile. Every tile transaction at a dealer counter is an adhesive transaction waiting to happen. A dealer who sells 500 square metres of tile in a month and captures the adhesive for 60% of that footage – at roughly 3 to 5 kg per square metre of adhesive consumption – is generating meaningful additional revenue from customers who were already in the showroom. That revenue requires no additional customer acquisition, no additional footfall, and minimal additional working capital if the stock is managed properly.
The dealer who has trained staff, maintains good adhesive stock, and actively recommends the right adhesive for the tile being purchased captures this revenue naturally. The dealer who treats adhesive as an afterthought loses it to the hardware shop next door or the contractor who brings their own supply.
Pidilite’s Consumer and Bazaar segment growing at 22.5% tells you that a significant volume of adhesive is being sold through channels other than tile dealers – hardware stores, building material suppliers, direct contractor supply. Some of that volume belongs at the tile dealer counter and is currently leaking to competing channels because tile dealers are not actively competing for it.
What a Growth Category Mindset Looks Like in Practice
The tile dealers who are genuinely growing their adhesives business are doing three things differently from the ones who treat it as an add-on.
They have trained their floor staff on product differentiation. Not every tile adhesive is the same. A standard white cement-based adhesive works for floor tiles in a dry area. A rapid-setting or epoxy-modified adhesive is needed for large-format tiles, wet areas, or surfaces where vibration is a risk. A dealer whose staff can explain this distinction – and recommend the right adhesive for the specific tile the customer is buying – captures the sale and builds credibility as a technical advisor rather than a commodity counter. That credibility translates into repeat business.
They stock the adhesive range that matches their tile range. A dealer carrying premium large-format GVT should have premium adhesive available – the product that the installer actually needs for that format and that the manufacturer specifies. Stocking a basic economy adhesive alongside a ₹120 per square foot tile creates a mismatch that either results in a failed installation or a customer going elsewhere for the adhesive. Both outcomes damage the dealer’s relationship.
They track adhesive attachment rate as a metric. The attachment rate – what percentage of tile sales are accompanied by an adhesive purchase at the same counter – is one of the most useful but rarely measured numbers in a tile dealer’s business. A dealer who knows their attachment rate can see immediately whether their adhesive sales are tracking tile sales or falling behind. In most dealerships, this number is unknown. In the ones where it is known and managed, it is typically 40 to 60% – meaning meaningful revenue is being captured alongside every tile sale. The industry benchmark that organised manufacturers aim for is 70% and above.
The Brand Battle That Is Just Getting Started
The adhesives category is entering a phase of competitive intensification that will reward the dealers who have built the category correctly and disadvantage the ones who haven’t.
Kajaria’s rapid adhesives growth – ₹45 crore in a single quarter – is not happening in isolation. It is part of the tile industry’s broader recognition that adhesive is a natural category extension, not a separate business. Somany’s building materials division, which includes construction chemicals and adhesives, is growing healthily according to their own earnings commentary. Astral is building an organised challenger adhesives brand alongside their pipes business. Pidilite’s Dr. Fixit and Roff tile adhesive range are being actively pushed through mason training programmes and dealer engagement.
The implication for dealers is that the number of organised, well-resourced brands competing for adhesive shelf space in their showroom is increasing – which means the brand that gets the best display position, the most knowledgeable staff support, and the most proactive inventory management will win a category that is growing at 20 to 25% per year while most tile categories are growing at 3 to 6%.
That is not a difficult calculation to make. The dealer who treats adhesives as a growth category in FY27 will be capturing revenue that their competitor is leaving on the table – and building the supplier relationships that will matter when this category becomes even more competitive in FY28 and FY29.
The results from Q1 FY27 have made the direction of this category impossible to misread. The only question left is whether your dealership is positioned to benefit from it.
References
- CompoundingAI / Pidilite Q1 FY27 Results Analysis – https://compoundingai.in/market-news/pidilitind-q1-fy27-results-analysis
- Sahi / Pidilite Q1 FY27 Results – https://www.sahi.com/blogs/pidilite-industries-q1-results-fy2027
- Kotak Neo / Pidilite Q1 FY27 Full Results – https://www.kotakneo.com/news/stocks/pidilite-industries-q1-2026-27-results-pat-rises-30-to-rs-872-crore-revenue-up-21/
- Business Standard / Astral Q1 FY27 Results – https://www.business-standard.com/markets/capital-market-news/astral-surges-as-q1-pat-rises-48-yoy-126081300512_1.html
- Business Standard / Astral Q1 Adhesives Growth Detail – https://www.business-standard.com/markets/news/astral-jumps-9-5-as-strong-pipe-performance-drives-q1-pat-52-higher-126081300808_1.html
- Kotak Neo / Astral Q1 FY27 Full Results – https://www.kotakneo.com/news/stocks/astral-q1-fy-27-results-pat-rises-52-percent-revenue-1578-crore/
- Investing.com / Kajaria Q1 FY27 Earnings Call Transcript – https://www.investing.com/news/transcripts/earnings-call-transcript-kajaria-ceramics-posts-strong-q1-fy-2027-growth-93CH-4827940
- Pidilite Official Press Release Q1 FY27 – https://www.pidilite.com/content/dam/pidilitecorporatewebsite/financial/quarterly-reports/fy-2026-27/q1/se-intimation-press-release-30-06-2026.pdf
- DataIntelo / South India Tile Adhesive Penetration Data – https://dataintelo.com/report/india-tile-adhesive-market
