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Pidilite Q2 Results: Margin impacted by all-time high input costs

Pidilite Q2 Results: Margin impacted by all-time high input costs

Pidilite Q2 Results: Margin impacted by all-time high input costs
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By Hormaz Fatakia  Nov 9, 2022 7:32 PM IST (Updated)

The management said that margin was impacted due to input costs being at an all-time high.

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Pidilite Industries Ltd., India's leading adhesives manufacturer reported September quarter results that missed consensus expectations, with EBITDA margin contracting over 430 basis points from the year-ago period.
The 16.6 percent EBITDA margin was also 90 basis points lower than a CNBC-TV18 poll, which had pegged the figure at 17.5 percent. Margin continues to be impacted due to raw material inflation, a weaker currency and expensive inventory.
Gross margin during the quarter stood at 41 percent which is 70 basis points lower than the June quarter. The company managed to maintain gross margin due to selective pricing action along with mix enrichment.
Revenue for the period increased 14.6 percent from last year, but turned out to be marginally below the CNBC-TV18 poll. Pricing and mix contributed to the topline growth with urban markets growing faster than rural.
Managing Director Bharat Puri said that the Consumer & Bazaar segment delivered "modest volume growth" during the quarter.
For the first half of the current financial year, the Consumer and Bazaar, along with the B2B business have reported double-digit volume growth on a year-on-year basis.
Other Highlights From The Quarter:
  • Domestic subsidiaries maintained positive momentum with Consumer & Bazaar subsidiaries delivering industry-leading growth and margins
  • B2B subsidiaries significantly reduced losses
  • International subsidiaries witnessed good sales growth, but EBITDA under pressure due to high input costs
  • Going forward, the management is hopeful of a sequential improvement in profitability as commodity costs, especially those of VAM soften. The company is cautiously optimistic on better demand conditions due to a good monsoon and a pick-up in construction activity.
    In a management rejig, the company has appointed Sandeep Batra as the new Chief Financial Officer of the company. Batra had earlier served the company as Director-Finance between 2009 and 2015. He was previously the CFO at Crompton Greaves Consumer Electricals.
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