PIDILITE Q2 RESULTS 2024: NET PROFIT RISES 35%

Pidilite reported its Q2FY24 numbers on Wednesday evening. The overall results were good. On Thursday morning, Pidilite's share price opened lower and was trading at Rs 2,461 per share, down 0.50% at 10 a.m. Let us look at everything in detail about Pidilite Q2 results. 

About Pidilite

Pidilite Industries Limited is an Indian multinational company that specializes in adhesive and construction chemical products. Founded in 1959, Pidilite has grown to become one of the leading manufacturers of a wide range of consumer and industrial products.

Crucial parameters

• PE: 90.38
• 52-week high: Rs 2,796.15
• Market Cap: Rs 1,25,304.43 crore
• ROE: 19.57

Share price movement

In the last one month, Pidilite's share price has been up by 1.5%. However, in 2023, the overall returns are negative - the share is down nearly 3%. In the 5-year time frame, the share price has given 136% returns.

How was Pidilite Q2FY24 results?

Below are detailed numbers of Pidilite for the September quarter:

Revenue: The company reported a consolidated revenue of Rs 3,065 crore, a growth of 2.2% YoY. The standalone revenue stood at Rs 2,768 crore in Q2FY24, a marginal increase from Rs 2,703 crore in Q2FY23. The growth was seen in the C&B (Consumer and Bazaar) segment. B2B and Others segment sales were down in the September quarter. The C&B segment grew by 3%, while B2B registered a 1% decline in revenue due to price adjustments and lower demand from export and export-oriented industries. 

EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) reported by the company was Rs 680 crore (consolidated), an excellent 36% growth YoY. On a standalone basis, EBITDA was Rs 643 crore, a 38.5% growth.

Margins: Standalone gross margin % expanded sequentially (by 228 bps) and year on year (by 1,095 bps). The company continued to remain aggressive in nurturing its brands by doubling investments in A&SP, as compared to Q2FY23. EBITDA margins at 23% improved by 604 bps over Q2FY23 and 47 bps over Q1FY24. 

Profit: The consolidated profit was Rs 459 crore, a 35.7% growth compared to the year-ago period. The standalone PAT was Rs 455 crore.

Other Updates: Domestic subsidiaries continued to deliver robust sales growth driven by C&B businesses. EBITDA margins also improved both sequentially and year on year. International subsidiaries (excluding Pidilite USA Inc.) reported moderate sales growth despite uncertain global economic conditions, inflation, and currency devaluation challenges in some countries. EBITDA (excluding Pidilite USA Inc.) registered robust growth along with improvement in EBITDA Margins both sequentially and year on year.

Management Commentary: "We continue to remain optimistic in the near term with tailwinds coming from the extended festive season, increase in construction activity as well as the government focus on capex. Though input prices are currently stable, we remain watchful of the current geo-political situation and its impact on input prices as well as global demand.”, Mr. Bharat Puri, Managing Director.

Pidilite plans to enter the lending business

The company has said in a press release that it plans to enter the lending business and focus on providing credit through small retail loans. The new business would provide credit to its domain ecosystem to support its business growth. This credit will be provided primarily in the form of small-value retail loans.

The company said that they have identified an existing NBFC Pargro Investments Private Limited, belonging to the company’s promoter group. Pargro does not have any lending operations presently and is debt-free as of October 31, 2023. The acquisition of the promoter group NBFC, which is expected to be Rs 10 crore, is planned to be completed before March 31, 2024. Further, after setting up the business, the company plans to invest Rs 100 crore in different tranches.