Company Update : Pidilite Ltd By Motilal Oswal Financial Services Ltd
Volume-led growth sustains; miss on EBITDA
Consolidated performance
* Consolidated sales grew 8% YoY to INR33.7b (est. INR33.8b).
* Underlying volume growth remained strong at 9.7% (9.0% est., 8.0% in 2QFY25). UVG was 7.3% for C&B and 21.7% for B2B businesses.
* The Consumer & Bazaar (C&B) segment’s revenue was up 5% YoY to INR26.7b (est. INR26.7b), with segmental EBIT growing 2% YoY to INR7.9b (est. INR7.7b). Segmental EBIT margin contracted 90bp YoY to 29.4% during the quarter.
* The B2B segment’s revenue rose 19% YoY to INR7.6b (est. INR6.6b), with segmental EBIT increasing 76% to INR1.3b (est. INR0.8b). Segmental EBIT margin expanded 580bp YoY to 17.6%.
* Gross margin improved ~140bp YoY to 54.3% (in line) fueled by moderate RM prices.
* Employee expenses were up 16% YoY, and other expenses rose 11% YoY.
* EBITDA margin was flat YoY at 23.7% (est. 24.6%).
* EBITDA grew 8% YoY to INR8.0b (est. INR8.3b).
* PBT grew 9% YoY to INR7.5b (est. INR7.9b).
* Adj. PAT increased 9% YoY to INR5.6b (est. INR5.9b).
Subsidiaries
* Domestic subsidiaries delivered double-digit revenue growth with improvement in EBITDA margin.
* Owing to global economic uncertainty, inflation, and political instability in some countries, the company’s international subsidiaries (excluding Pidilite USA and Pulvitec Brazil) reported modest sales growth.
Other takeaways
* The company remains cautiously optimistic about improved demand from a good monsoon and increased construction activities.
* The company’s focus remains on driving profitable, volume-led growth through brand, supply chain, and people investments.
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