Buy Pidilite Ltd For Target Rs.2,522 By Motilal Oswal Financial Services Ltd
Volume growth healthy; EBITDA in line
Consolidated performance
Consolidated performance
* Net sales grew 4.4% YoY to INR31.3b (est. INR32.3b) in 3QFY24. The company posted healthy volume growth in a challenging environment.
* The growth was broad-based across both the segments, which reported double-digit UVG. The three-year/four-year revenue CAGR stood at 11%/13%.
* The Consumer & Bazaar (C&B) segment revenue rose 5% YoY to INR25.4b, with segmental EBIT rising 43% YoY to INR7.7b. The segmental EBIT margin expanded 800bp YoY to 30.3%.
* The B2B segment revenue was up 6% YoY to INR6.4b, with segmental EBIT surging 93% YoY to INR757m. Segmental EBIT margin expanded 530bp to 11.9% during the quarter.
* Gross margin improved ~1,100bp YoY to 52.9% (est. 51.9%).
* As a percentage of sales, higher employee costs (+160bp YoY to 11.3%) and other expenses (+250bp YoY to 16.7%) resulted in an EBITDA margin expansion of 720bp YoY to 23.7% (est. 23.2%).
* EBITDA grew 49.7% YoY to INR7.4b (est. INR7.5b). The three-year/fouryear CAGR stood at 5.0%/12.5%.
* PBT rose 64.7% YoY to INR6.9b (est. INR6.7b). The three-year/four-year CAGR was at 5%/11%.
* Adj. PAT jumped 66.8% YoY to INR5.1b (est. INR5.0b). The threeyear/four-year CAGR stood at 5%/10%.
Standalone performance
* Net sales grew 4.6% YoY to INR28.3b, with healthy volume growth amid a challenging environment.
* The underlying volume growth was healthy at 10.4%.
* Both urban and rural markets grew, with rural market outpacing the urban growth.
* The C&B segment revenue was up 5.4% YoY to INR23.3b. The segmental EBIT grew 45.4% YoY to INR7.5b. The segmental EBIT margin expanded ~900bp YoY to 32.4%.
* The B2B segment revenue was up 4.7% YoY to INR5.4b. The segmental EBIT surged 85.1% YoY to INR752m. The segmental margin expanded ~600bp YoY to 14.0%.
* Gross margin expanded ~1,200bp YoY to 52.9%, while EBITDA margin improved 770bp YoY to 25.0%.
* EBITDA grew 51.4% YoY to INR7.1b. The three-year/four-year CAGR stood at 7.3%/13.3%.
* PBT grew 72.1% YoY to INR6.9b. The three-year/four-year CAGR was at 8%/13%.
* Adj. PAT jumped 76.5% to INR5.2b. The three-year/four-year CAGR stood at 9%/12%.
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