Pidilite Industries Ltd Research ReportQ3FY21

Beats on all fronts… Pidilite’s healthy Q3FY21 performance was led by both domestic and overseas business and was much ahead of our expectations. Standalone revenue (86% of consolidated revenue) growth at 18% YoY was driven by ~19% volume growth. The consumer & bazaar (C&B) and B2B businesses witnessed strong demand in Q3FY21. The C&B segment witnessed strong growth at 20% led by 22% of volume growth led by pent up demand in the metro and urban centres. The B2B segment also witnessed volume, value growth of 12% and 10%, respectively. On the subsidiaries front, while overseas subsidiaries continued to perform well (with revenue growth of 21% YoY), the domestic subsidiary witnessed a gradual recovery of 98% of its pre-Covid sales during Q3. Finally consolidated revenue grew 19% (including Huntsman’s revenue) but on a like to like basis revenue growth was at 16% YoY. According to the management, pick up in renovation and construction activities works due to opening up of metro, tier 1 towns along with synergies through acquisition of market leader Huntsman Advanced Materials Solutions Pvt Ltd (name changed to Pidilite Adhesive Pvt Ltd (PAPL)) in the epoxy adhesive segment would further help drive revenue growth, going forward. We tweak our revenue estimates upward by 6% each for FY22E, F23E.