Pidilite Q2 net profit dips 10% to Rs 338 cr; sales up 14% to Rs 3,011 cr

Pidilite Industries on Wednesday reported a decline of 10.06 per cent in consolidated net profit at Rs 337.75 crore for the second quarter of FY23 on account of raw material inflation and high-priced inventory.

The company, which manufactures adhesives, sealants and construction chemicals, had logged a profit of Rs 375.53 crore in the July-September quarter a year ago.

Revenue from operations was up 14.65 per cent at Rs 3,011.15 crore during the quarter under review as against Rs 2,626.35 crore in the year-ago period, Pidilite Industries said in a regulatory filing.

"Margins continue to be impacted owing to raw material inflation, a weaker currency and high-priced inventory. Selective pricing action along with mix enrichment helped to maintain gross margins sequentially," said Pidilite in an earnings statement.

Control in costs below gross margin enabled to maintain EBITDA margin at the same level as previous quarters, it added.

Pidilite's total expenses were at Rs 2,586.60 crore, up 20.33 per cent.

Its revenue from the 'consumer & bazaar' segment was up 14.13 per cent at Rs 2,431.49 crore in July-September 2022 as against Rs 2,130.42 crore in the corresponding quarter a year ago.

Revenue from the business-to-business segment was at Rs 623.72 crore, up 17.15 per cent in the September quarter of FY23 as against Rs 532.38 crore a year ago.

Pidilite Industries managing director Bharat Puri said: "This quarter saw input costs at an all-time high. Despite this, we were able to maintain our margins sequentially through calibrated pricing and effective cost management actions."

"While demand conditions remained soft, with inflation impacting consumption, we remain cautiously optimistic on improving demand conditions, thanks to the good monsoon as well as increased construction activity," he added.

Over the outlook, he said softening of commodity cost will sequentially improve profitability.

"As an organisation, we continue to invest in our brands, supply chain, digital infrastructure, and distribution to deliver consistent volume-led profitable growth," he added.

Shares of Pidilite Industries settled at Rs 2,650.40 apiece, up 0.66 per cent on the BSE.