Pidilite Industries

Operating profit down 4%

May 16, 2019 07:05 IST capital market

Pidilite Industries, Indias leading manufacturer of adhesives, sealants and construction chemicals consolidated net sales at Rs 1631 crore in Q4FY19 grew by 11% over the same quarter last year. Net sales for financial year 2018-19 stood at Rs 7035 crore and grew by 17% (excluding the sales of Cyclo Division of Pidilite USA Inc which was sold by Pidilite USA Inc in June 2017) over the previous financial year. EBITDA before non-operating income stood at Rs 279 crore and grew by 2% over the same quarter last year, given the input cost led contraction in gross margins by 1.6%. EBITDA for financial year 2018-19 stood at Rs 1376 crore and grew by 2% over the previous financial year given the Input cost led contraction in gross margins by 3%.

Profit after tax at Rs 237 crore declined by 4% over the same quarter last year. Exceptional items represent diminution / impairment in value of investments made by subsidiaries for the quarter ended March 2019 amounting to Rs. 11 crore and for the full financial year Rs. 18 crore. Current tax for the quarter includes Rs 53 crore (Rs 46 crore In previous year) being excess provision of earlier years now written back. For the full financial year 2018-19, profit after tax at Rs 928 crore declined by 4% over the previous financial year

On standalone basis net sales at Rs 1367 crore grew by 8% over the same quarter last year with underlying sales volume & mix growth of 2.5%. This was driven by a 4% growth in sales volume & mix of Consumer & Bazaar products and negative 1% growth in sales volume & mix of Industrial Products. Net sales for finandal year 2018-19 stood at Rs 6048 crore and grew by 15% over the previous financial year with underlying sales volume & mix growth of 10%. This was driven by a 12% growth in sales volume & mix of Consumer & Bazaar products and 2% growth in sales volume & mix of Industrial Products. EBITDA before non-operating income stood at Rs 263 crore and grew by 3% over the same quarter last year given the input cost led contraction in gross margins by 2%. EBITDA for financial year 2018-19 stood at Rs 1298 crore largely flat over the previous financial year, given the input cost led contraction In gross margins by 3%.

Profit after tax stood at Rs 243 crore improved by 2% over the same quarter last year. Current tax for the quarter includes Rs 53 crore (Rs 46 crore in previous year) being excess provision of earlier years now written back. Profit after tax for the full financial year 2018-19 stood at Rs 979 crore grew by 3% over the previous financial year.

Commenting on the quarter performance, Mr. Bharat Puri, Managing Director, Pidilite Industries Ltd, said:

While this quarter has seen some moderation In growth as a result of slower near term market growth, we have delivered double digit volume growth for the year. While gross margins have improved sequentially, they still remain below last year as a result of Input cost Inflation and rupee depreciation. We remain continuously optimistic In the medium term of delivering consistent, profitable volume led growth.

Consolidated Performance for the quarter ended March 2019

For quarter ended March 2019, net sales rose 10% to Rs 1638.93 crore compared to corresponding previous year period. The company operating margins decreased 140 bps to 17%. As a result operating profits rose 2% to Rs 278.88 crore.

Cost of material consumed as a percentage of net sales (net of stock adjustment) rose 200 bps to 46.9%. Purchase of stock in trade decreased 80 bps to 4.5%. Employee benefit expenses increased 160 bps to 12.8%. Other expenses fell 160 bps to 19.4%.

Other income of the company rose 8% to Rs 56.21 crore. Interest cost was Rs 6.67 crore compared to Rs 3.83 crore in Q4FY18. Depreciation was up 31% to Rs 38.96 crore. PBT before EO was down 1% to Rs 289.46 crore. The company had EO expense of Rs 10.96 crore for Q4FY19 representing impairment in value of investments compared to nil in the corresponding previous year period. PBT after EO was down 5% to Rs 278.5 crore.

The effective tax rate decreased to 15.5% from 15.6% owing to which the companys net profit fell 5% at Rs 235.39 crore. Further considering share of profit and loss of Associate Company and minority interest bottomline of the company fell 4% to Rs 235.13 crore.

Consolidated Performance for year ended March 2019

For year ended March 2019, the overall top-line rose 16% to Rs 7078.74 crore compared to corresponding previous year period. The company operating margins decreased 270 bps to 19.3%. As a result operating profits rose 2% to Rs 1368.21 crore.

Other income fell 1% to Rs 146.64 crore. Interest cost was Rs 26.07 crore compared to Rs 15.54 crore in FY18. Depreciation rose 11% to Rs 132.74 crore. PBT before EO was flat at Rs 1356.04 crore. The company had EO expense of Rs 18.02 crore for FY19 representing impairment in value of investments compared to nil in the corresponding previous year. PBT after EO was down 1% to Rs 1338.02 crore.

The effective tax rate increased to 30.9% from 29% owing to which the companys net profit fell 4% at Rs 924.69 crore. Further considering share of profit and loss of Associate Company, and minority interest Bottomline of the company fell 4% to Rs 924.81 crore.

The scrip is currently trading at Rs 1166

Pidilite Industries: Consolidated Results

 

Particulars 1903 (3) 1803 (3) Var. (%) 1903 (12) 1803 (12) Var. (%)
Income from Operations 1638.93 1485.31 10 7078.74 6078.41 16
OPM (%) 17.0 18.4 19.3 22.1
OP 278.88 273.93 2 1368.21 1341.22 2
Other income 56.21 52.07 8 146.64 148.41 -1
PBIDT 335.09 326.00 3 1514.85 1489.63 2
Interest 6.67 3.83 74 26.07 15.54 68
PBDT 328.42 322.17 2 1488.78 1474.09 1
Depreciation 38.96 29.77 31 132.74 119.88 11
PBT before EO 289.46 292.40 -1 1356.04 1354.21 0
EO 10.96 0.00 18.02 0.00
PBT after EO 278.50 292.40 -5 1338.02 1354.21 -1
Tax 43.11 45.70 -6 413.33 392.71 5
Net profit after tax 235.39 246.70 -5 924.69 961.50 -4
Share of profit of associate or joint venture 1.47 0.82 79 3.60 4.59
MI 1.73 3.41 3.48 3.74
Net profit 235.13 244.11 -4 924.81 962.35 -4
EPS (Rs)* 19.4 19.5 18.5 19.0
* Annualised on current equity of Rs 50.78 crore. Face Value: Rs 1 each
Var. (%) exceeding 999 has been truncated to 999
LP: Loss to Profit PL: Profit to Loss
EO: Extraordinary items
EPS is calculated after excluding EO and relevant tax
Figures in Rs crore
Source: Capitaline Corporate Database

Pidilite Industries: Consolidated Segment Revenue

 

Particulars 1903 (3) 1803 (3) % of total Var. (%) 1903 (12) 1803 (12) % of total Var. (%)
Segment Revenue
Consumer and Bazaar Products 1364.46 1,227.59 82 11 6070.46 5274.09 84 15
Industrial Products 292.28 272.66 17 7 1065.58 994.77 15 7
Others 14.20 12.58 1 13 66.05 55.81 1 18
Total 1670.94 1512.83 100 10 7202.09 6324.67 100 14
Less: Intersegment Revenue-Power 32.01 27.52 123.35 105.91
Net Segment Revenue 1638.93 1485.31 7078.74 6218.76
Segment Results
Consumer and Bazaar Products 301.01 282.06 88 7 1449.56 1371.8 91 6
Industrial Products 43.20 46.94 13 -8 154.1 158.29 10 -3
Others -1.9 -1.44 32 -8.98 -1.94 363
Total 342.31 327.56 101 5 1594.68 1528.15 101 4
Capital Employed
Consumer and Bazaar Products 2099.09 1924.94 48 9 2099.09 1924.94 48 9
Industrial Products 367.95 345.29 8 7 367.95 345.29 8 7
Others 62.68 40.62 1 54 62.68 40.62 1 54
Unallocated 1825.52 1438.2 42 27 1825.52 1438.2 42 27
Total 4355.24 3749.05 100 16 4355.24 3749.05 100 16
Figures in Rs crore.
LP: Loss to Profit PL: Profit to Loss

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