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Pidilite Industries: Strong performance on demand revival

News: Pidilite’s Q2FY22 revenue increased 40% YoY to Rs. 2626 crore much ahead of our estimate of Rs.2207 crore. While gross margin declined 1054 bps YoY, EBITDA margin fall (at 634 bps YoY to 21%) was arrested by savings in other expenditure. PAT increased 5% YoY to Rs. 376 crore

Views: Pidilite reported strong value, volume growth in Q2FY22 supported by a favourable base and strong demand of consumer & bazaar products (such as adhesives, construction chemicals and DIY portfolio). The sharp decline in gross margin was mainly due to higher VAM prices. We await management commentary on sustainability of future demand and the quantum of price hikes. The detailed report will be released post conference call.