Pidilite Inds rises after good Q2 numbers

Pidilite Industries rose 1.11% to Rs 1338.40 after consolidated profit after tax rose 41% to Rs 325 crore on a 3% increase in net sales to Rs 1797 crore in Q2 September 2019 over Q2 September 2018.

Profit after tax grew mainly on account of reduction in tax rates by the government. Profit before exceptional items and tax rose 5.9% to Rs 377 crore in Q2 September 2019 over Q2 September 2018. EBITDA, before non-operating income, at Rs 369 crore, declined marginally by 0.6% over the same period last year on account of higher advertising and sales promotion spends due to phasing in this quarter.

Material cost as a percentage to net sale is lower by 399 bps vs same period last year and by 200 bps as compared to Q1 June 2019.

Commenting on the quarter's performance, Bharat Puri, managing director, Pidilite Industries said, "This quarter has seen moderation of top line growth as a result of the challenging market conditions, the liquidity crunch as well as the prolonged monsoon and attendant disruption. While gross margins have improved substantially due to softer input costs, higher advertising and sales promotion costs due to phasing in this quarter, saw EBITDA at the same level as last year. While we expect demand conditions to improve in the new year, we remain focused on driving volume growth enabled by investments in brand building, capability and growth in small towns and rural India."

Pidilite Industries is a leading manufacturer of adhesives and sealants, construction chemicals, craftsmen products, DIY (do-it-yourself) products and polymer emulsions in India.

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