Pidilite reports mixed bag performance

News: Pidilite’s consolidated revenue came in at ~Rs.2851 crore up by ~24% YoY supported by price hikes and good demand conditions (volumes were up by 9%). The EBITDA margin declined by 861 bps YoY to 19% mainly due to higher raw material prices. PAT declined by 20% YoY to Rs.359 crore.

Views: Pidilite reported a mixed bag performance in Q3FY22 wherein revenues were higher than our estimates while EBITDA margin & PAT came in below our estimates. Sharp fall in gross margins (down by 1117 bps YoY, 182 bps QoQ) was mainly due to high base and delay in price hikes. We believe the positive impact of price hikes on the EBITDA margin will start to be visible from Q4 onwards. We await management commentary on sustainability of future demand.

Impact: Neutral