Pidilite Q3 Results: Revenue rises but Profit falls below estimates

Net profit decline - The net profit reported by the company in Q3’2021 was Rs 359.24 crore, a drop of 16% compared to last year when it reported a net profit of Rs 446.43 crore. Analysts estimated profit around Rs 402 crore. Sequentially profits fell by 4.3% from Rs 375 crores. 

Increase in revenue - Pidilite reported a revenue of Rs 2,850.72 crore, an increase of 19% YoY and inline with street estimates. Last year in the same period, the company reported revenue of Rs 2,319.40 crore. Sequentially revenue increased by 8%. Its growth was broad-based across consumer and bazaar (C&B) and business-to-business (B2B) with growth in urban geographies outpacing rural geographies. 

Segment-wise breakup - The company drew maximum revenue in the third from its Consumer & Bazaar (C&B) vertical drawing Rs 2,264.52 crore, an increase of 6.8% QoQ. The next highest revenue came from the Business to Business (B2B) vertical drawing Rs 618.64 crore, an increase of 16.45% QoQ.

Margins fall - The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at Rs 549.1 crore for Q3FY22. Analysts estimated EBITDA to be around 590 crores. The EBITDA fell 14.3% YoY, while the margin stood at 19.3%, down from 27.9% YoY. The total expenses were Rs 2,372.9 crore which is higher than Rs 1,719.75 crore in Q3FY21.

Pidilite Q3 Results Review:

Pidilite has reported Q3 results below analysts expectations. Gross margins continue to get impacted on account of an increase in input cost. Robust double-digit revenue growth in this quarter was led by staggered pricing actions and steady demand conditions. Going forward, the company expects near-term demand conditions to be a little more challenged, given the disruptions as a result of the pandemic as well as input inflation to continue. The company remains confident of the medium- to the long-term potential of the Indian home improvement sector and in our ability to deliver profitable volume growth. 

The share price fell by 2% after the results to Rs 2,585.