Pidilite Industries fell 2.12% to Rs 2,331.85 after the company's consolidated net profit declined 13.22% to Rs 304.17 crore despite of 5.15% rise in revenue from operations to Rs 28,50.72 crore in Q3 FY23 over Q3 FY22.
Profit before tax stood at Rs 418.88 crore in the third quarter, down by 13.94% from Rs 486.72 crore recorded in the corresponding quarter previous year EBITDA stood at Rs 496 crore in quarter ended 31 December 2022.
Total expense rose 8.96% year on year (YoY) to Rs 2,585.44 crore in Q3 FY23. Cost of raw material consumed stood at Rs 1,506.73 crore (up 4.78% YoY) and employee expenses stood at Rs 308.75 crore (up 10.26% YoY).
Pidilite Industries said that last year, Q3 had registered very high growth (Val: 24% over PY) as a result of trade increasing inventory stocking because of substantial price increases in the quarter. Over these high bases, we have registered a growth of 5% with Consumer and Bazaar (C&B) business growing at 7% (Vol: approximately 1%). While input prices have moderated, gross margins have improved marginally over the last quarter, largely as a result of high priced inventory. EBITDA margins are in line with the previous quarter despite an increased investment in A&SP.
Despite uncertain global economic conditions, currency devaluation and inflation, International Subsidiaries reported moderate sales growth whilst EBITDA remained under pressure due to higher input costs and impact of currency depreciation. Domestic C&B subsidiaries continue to deliver industry leading profit and growth, the company added.
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On standalone basis, Pidilite Industries reported 17.39% decline in net profit to Rs 296.26 crore in Q3 FY23 from Rs 358.61 crore posted in Q3 FY22. Net sales increased by 4.87% YoY to Rs 2709.70 crore in the quarter ended 31 December 2022. In this quarter, C&B sales grew by 7%. Business to Business (B2B) business saw difficult trading conditions especially in businesses with significant export and sales declined by 6%.
For 9 months FY23, the firm's consolidated net profit rose 3.88% to Rs 990.22 crore on 22.88% jump in net sales to Rs 9,109.85 crore in 9M FY23 over 9M FY22.
The company stated that the nine months of the current financial year witnessed robust revenue growth of 23% aided by strong volume growth across categories and geographies. Growth was broad based across C&B and B2B segments with both segments reporting double digit value growth as well as a healthy CAGR of over 15% over a three- year period.
Bharat Puri, managing director, Pidilite Industries, said, Over the first nine months of the year, we have delivered robust broad based value and volume growths across businesses and geographies. Our CAGR over the last three years remain healthy. Despite a very high price increase base, we have delivered modest value growth this quarter while maintaining robust CAGR.
He further added, While input prices have moderated, this is still to reflect in our gross margins as we were consuming high priced inventory this quarter. While demand conditions in rural and semi urban area remain under strain, we are increasingly optimistic of the future. This is as a result of the significant input cost reductions as well as increased construction activity along with governmental initiatives in capex and the rural sector. As an organisation we continue to invest in our brands, supply chain, digital infrastructure, innovation and distribution to deliver volume led profitable growth.
Pidilite Industries is a leading manufacturer of adhesives and sealants, construction chemicals, craftsmen products, DIY (Do-It-Yourself) products and polymer emulsions in India. Its products range also includes paint chemicals, automotive chemicals, art materials and stationery, fabric care, maintenance chemicals, industrial adhesives, industrial resins and organic pigments & preparations. Some of its major brands are Fevicol, M-Seal, Fevikwik, Fevistik, Roff, Dr. Fixit, Araldite and Fevicryl.
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