Pidilite Industries Share Q3 Results

Pidilite Industries reported a 34% YoY growth in total revenues for the Dec-21 quarter on consolidated basis at Rs.2,851 crore. On a sequential basis i.e. compared to Q2, the revenues were up by 8.54%. During the December 2021 quarter, the company saw double digit volumes across adhesives, sealants and construction chemicals. This was helped by a sharp bounce in construction activity during the quarter.

The quarter also witnessed staggered favourable pricing action to partially offset higher material costs, but that could only cover part of the cost spikes. Growth in urban geographies outpaced the growth in rural geographies across the country during the quarter. Growth in sales was visible in the Consumer & Bazaar (C&B) segment as also the business to business or B2B segments.

For the Dec-21 quarter, operating profits were lower YoY by -17.4% at Rs.489 crore. The company reported overall earnings before interest, taxes, depreciation and amortization or EBITDA of Rs.550 crore. This is nearly 14% lower on YoY basis. EBITDA margins stayed robust at 19.3% in the quarter, which is on the higher side of FMCG peer group.

However, pressure on operating profits was visible on a YoY basis. The pressure on the operating profits came from a 53% spike in the raw material costs on the back of input inflation. This is for the quarter on a YoY basis. As a consequence, the Operating margins contracted from 25.72% in Dec-20 quarter to 17.14% in the Dec-21 quarter. Operating margins were lower on a sequential basis too compared to the Q2 period.

Net Profit after tax for the Dec-21 quarter was down -18.86% at Rs.358 crore due to the impact of the spike in operating costs in the quarter. To an extent, the higher material costs and a spike in other expenses were only partially offset by inventory efficiency gains in the quarter.  PAT margins contracted from 19.22% to 12.58% in the Dec-21 quarter on a YoY basis. The PAT margins were lower on a sequential basis too, compared to Q2.