Pidilite Industries Ltd (BOM:500331) Q2 FY25 Earnings Call Highlights: Strong Revenue Growth ...

GuruFocus News
4 min read

In This Article:

  • Revenue: INR 2,965 crores for Q2 FY25, a 7% increase year-over-year.

  • Underlying Volume Growth (UVG): 8% overall; Consumer and Bazaar UVG at 6%; B2B UVG at 21%.

  • Gross Margin Expansion: 280 basis points increase over the same period last year.

  • EBITDA Margin: 24.6% for standalone business, expanded by 143 basis points year-over-year.

  • Standalone Revenue for H1: INR 6,099 crores with a UVG of 9%.

  • Gross Margin Expansion for H1: 380 basis points increase over the same period last year.

  • EBITDA for H1: 24.6% compared to 23% last year.

  • Profit After Tax (PAT) Growth for H1: 19% increase.

  • Consolidated Revenue for Q2: INR 3,223 crores, a 7% increase year-over-year.

  • Consolidated PAT Growth for Q2: 18% increase year-over-year.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Pidilite Industries Ltd (BOM:500331) reported a 7% increase in revenue for Q2 FY25 compared to the same period last year, with an underlying volume growth of 8%.

  • The B2B segment showed strong performance with a UVG of 21%, driven by industrial and project verticals.

  • Gross margins expanded by 280 basis points over the same period last year, aided by benign input prices.

  • EBITDA margins for the standalone business improved to 24.6%, expanding by 143 basis points year-over-year.

  • The company continues to invest in upgrading and building new facilities and expanding its distribution network, indicating a focus on long-term growth.

Negative Points

  • Consumer and Bazaar product demand was impacted by rains at the beginning of the quarter, resulting in a lower UVG of 6%.

  • Urban demand slowdown was noted, with concerns about the impact of food inflation and potential cooling off of real estate growth.

  • The company's domestic subsidiaries, particularly Nina Percept, faced challenges and have not yet returned to profitability.

  • Employee costs have surged, raising questions about the sustainability of such expenses in the long term.

  • The competitive intensity in the waterproofing segment remains high, with no decrease in competition from paint companies.

Q & A Highlights

Q: Can you explain the impact of rains on your portfolio and whether double-digit volume growth in Consumer and Bazaar (C&B) could return in the coming quarters? A: Sudhanshu Vats, Managing Director Designate, explained that while certain segments like waterproofing were impacted by rains, other areas showed robust growth. He emphasized that the overall volume growth remains healthy, driven by a diverse portfolio and strong execution. He remains optimistic about returning to double-digit growth, depending on market conditions.

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