Pidilite Industries falls 3% on disappointing Q4 results

Net sales declined 6% YoY to Rs 1,535 crore, largely impacted by lockdown and disruption in the supply chain.

Shares of Pidilite Industries dipped 3 per cent to Rs 1,391 on the BSE on Thursday after it reported lower-than-expected earnings in terms of revenue and net profit, which were largely impacted by lockdown and exceptional loss.

The stock of the leading manufacturer of adhesives, sealants, and construction chemicals has declined 8 per cent in the past nine trading days, as compared to a 2 per cent decline in the S&P BSE Sensex.

The company’s profit before tax and exceptional items (PBT) declined 12 per cent year-on-year (YoY) to Rs 255 crore. Net sales declined 6 per cent at Rs 1,535 crore over the previous year quarter, largely impacted by lockdown and disruption in supply chain. EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin improved to 19.5 per cent from 17 per cent, primarily due to softer input costs.

“The quarter performance was significantly impacted by the lockdown on account of the pandemic as well as related disruptions in the supply chain. While topline growth remains subdued, earnings have improved substantially, primarily as a result of softer input costs,” the management said.

Covid-19 is a significant challenge and Pidilite remains committed to working with partners to overcome this crisis. As normalcy returns slowly across various markets we remain cautious and focused on restoring volumes enabled by investments in brand building, growth categories, capabilities, and sales and distribution, it said.

“Topline was subdued but EBITDA margin improved substantially, primarily due to softer input costs. While April sales were impacted by complete lockdown, demand recovery in May, June with opening up of business gradually with rural markets seeing a sharp recovery against urban markets,” ICICI Securities said in a note.