Pidilite Industries declines as Q2 PAT slides 11% YoY

Pidilite Industries fell 1.24% after the company reported 11.3% decline in consolidated net profit to Rs 332.44 crore despite of 14.7% rise in net sales to Rs 3,011.15 crore in Q2 FY23 over Q2 FY22.

During Q1 FY23, EBITDA before non-operating income stood at Rs 500 crore. Profit before tax and exceptional items (PBT) was at Rs 438.61 crore, down by 10.8% over the same quarter last year.

Total expense climbed 20.34% YoY to Rs 2,586.60 crore in Q2 FY23. Cost of raw material consumed stood at Rs 1,589.83 crore (up 24.4% YoY) and employee expenses stood at Rs 303.24 crore (up 11.02% YoY).

Pidilite Industries said that the revenue growth in current quarter was largely led by pricing and mix. Urban markets grew faster than rural. Margins continued to be impacted owing to raw material inflation, weaker currency and high-priced inventory. Selective pricing action along with mix enrichment helped to maintain gross margins sequentially. Control in costs below gross margin enabled to maintain EBITDA margin at the same level of previous quarters.

Domestic subsidiaries maintained positive momentum with C&B subsidiaries continuing to deliver industry leading growth and margins whilst B2B subsidiaries reduced losses significantly, stated the company.

Pidilite further added that international subsidiaries witnessed good sales growth, but EBITDA remained under pressure due to higher input costs,

On a standalone basis, the company's net profit declined 9.8% to Rs 336.88 crore despite of 14.9% increase in net sales to Rs 2,715.20 crore in Q2 FY23 over Q2 FY22.

Commenting on the results, Bharat Puri, managing director of Pidilite Industries, said: The revenue growth in this quarter of 15% was largely led by pricing and mix with Consumer & Bazaar delivering modest volume growth. 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. The softening of commodity cost, especially VAM, will sequentially improve our profitability. As an organisation we continue to invest in our brands, supply chain, digital infrastructure, and distribution to deliver consistent volume led profitable growth.

Meanwhile, Debabrata Gupta resigned from his post of whole time director of the company, (designated as director-operations) with effective from 9 November 2022. He will continue with the company in another role and will retire from the company in February 2023.

Furthermore, the company's board appointed Sandeep Batra as chief financial officer (CFO), additional director and also as a whole time director of the company (designated as executive director-finance), with effect from 9 November 2022, subject to approval of shareholders of the company.

Pidilite Industries is a leading manufacturer of adhesives and sealants, construction chemicals, craftsmen products, DIY (Do-It-Yourself) products and polymer emulsions in India. Its products range also includes paint chemicals, automotive chemicals, art materials and stationery, fabric care, maintenance chemicals, industrial adhesives, industrial resins and organic pigments & preparations. Some of its major brands are Fevicol, M-Seal, Fevikwik, Fevistik, Roff, Dr. Fixit, Araldite and Fevicryl.

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