Pidilite Industries reported a disappointing set of numbers for the quarter, lower than consensus estimates on profitability front. Consolidated revenue for the quarter came in at Rs1,848.3cr, up 19.8% yoy, 5% ahead of estimates. However, on account of raw material inflation, company reported 618bps contraction in the gross margin. Thus, the EBITDA declined by 9% yoy to Rs336.8cr (~12% lower than estimate) and the EBITDA margin contracted by 578bps yoy to 18.2% against an estimate of 21.8%. Aided by higher other income, PAT decline was restricted to 8.2% yoy to Rs219.6cr (~12% lower than estimated).
Company reported double-digit volume growth during the quarter.
The Consumer and Bazar (C&B) segment reported strong double-digit growth of 22.1% yoy to Rs1,597.4cr, however, Industrial Products (IP) delivered slower growth at 6% yoy.
Gross margin during the quarter declined significantly by 618bps yoy to 47.2% on account of higher input costs (rising prices of VAM) and currency led inflation.
Due to higher input costs, on EBIT margin level, both the segments witnessed contraction. EBIT margin for C&B stood at 22.4%, contraction of 571bps and IP witnessed 511bps yoy contraction to 11.8%.
Other income for the quarter jumped by 57.7% yoy to Rs30.7cr and aided in restricting decline in PAT.
Tax rate for the quarter stood at 33.7% (33.5% in Q3FY18).
With the moderation in raw material costs, the management re-iterated its volume led growth.
Pidilite Industries Ltd ended at Rs. 1,130.95, down by 21.65 points or 1.88% from its previous closing of Rs. 1,152.60 on the BSE.
The scrip opened at Rs. 1,159 and touched a high and low of Rs. 1,162.75 and Rs. 1,126 respectively. A total of 5,86,323 (NSE+BSE) shares were traded on the counter. The stock traded above its 50 DMA.
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