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Informist, Wednesday, Aug 7, 2024

--Pidilite Apr-Jun consol net profit 5.67 bln rupees 

--Pidilite Apr-Jun consol net profit 5.67 bln rupees vs 4.68 bln 

--Analysts saw Pidilite Apr-Jun consol net profit 5.27 bln rupees 

--Pidilite Apr-Jun consol revenue 33.95 bln rupees vs 32.75 bln 

By Apoorva Choubey 

MUMBAI – Lower prices of raw materials and strong sales volume growth underpinned a double-digit rise in Pidilite Industries Ltd's earnings for the June quarter, even as the pace of revenue growth remained muted. Consolidated net profit jumped 21% on year to 5.67 bln rupees for Apr-Jun, surpassing the Street's estimate of 5.27 bln rupees.

The company sells synthetic chemical products like adhesives, sealants, and waterproofing compounds to retail consumers as well as businesses. Its consolidated revenue from operations grew 3.7% on year to 33.95 bln rupees, but failed to meet analysts' average topline projection of 34.86 bln rupees.

"Given a healthy monsoon and the ensuing festival season, we remain optimistic on market demand and our ability to deliver robust growth," Managing Director Bharat Puri was quoted as saying in a press release. 

The overall underlying volumes grew 9.6% during the June quarter compared to a year ago, despite the impact of General Election and severe heat wave conditions in most parts of the country, the company said in the press release. Pidilite's consumer and bazaar vertical saw volume growth of 8%.

The business-to-business division reported an underlying volume growth of 18% for Apr-Jun, driven by both domestic and export segments. International subsidiaries, excluding Pidilite's US arm and Pulvitec Brazil, saw revenue rising 9%, along with improvement of 189 bps in operating margin, the company said. 

Consolidated operating profit, excluding non-operating income, defined as earnings before interest, taxes, depreciation and amortisation, improved 15% on year to 8.1 bln rupees for the June quarter. The fall in input costs was expected to drive the improvement in Pidilite's operating performance for Apr-Jun. 

Prices of raw materials such as vinyl acetate monomer and crude oil derivatives have come down compared to a year ago, brokerages had said. Spot prices of vinyl acetate monomer fell to around $830 per tn during the June quarter, compared with the company's consumption cost of $925 per tn during Jan-Mar, Kotak Institutional Equities had said in a report. This monomer accounts for nearly 30% of total raw material costs for the company.

For Apr-Jun, Pidilite's cost of raw materials consumed fell nearly 3% on year to 13.3 bln rupees. Such input costs account for close to 50% of the company's total expenses. 

Backed by the fall in raw material costs, the company's profitability was expected to be within the guidance range of 20-24% for the June quarter, but the company managed to surpass the band. EBITDA margin expanded 187 basis points from a year ago to 24.6%, the company said.

Total expenditure, including finance costs, was 1% higher on year at 26.79 bln rupees for Apr-Jun. Finance costs were largely unchanged at 118.2 mln rupees. 

The company's other income more than doubled from a year ago to 539.4 mln rupees. Pidilite's tax outgo for the June quarter jumped 16.4% from a year ago to 1.98 bln rupees. 

Sequentially, the net profit rose 88.6% and revenue grew 17.0%. Today, shares of Pidilite closed 3.2% higher at 3,152.85 rupees on the National Stock Exchange.  End

Edited by Deepshikha Bhardwaj

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