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Pidilite expects stable raw material prices for the next six months and margins between 20-24%
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Shares of Pidilite fell over 5% on Wednesday, marking their biggest single-day drop in four months after its March quarter results. The adhesive manufacturer’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) stood at ₹577 crore, lower than the ₹600 crore estimate. EBITDA margin also stood at 19.9%, lower than the estimate of 21.4%. Net …
Shares of Pidilite fell over 5% on Wednesday, marking their biggest single-day drop in four months after its March quarter results.
The adhesive manufacturer’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) stood at ₹577 crore, lower than the ₹600 crore estimate. EBITDA margin also stood at 19.9%, lower than the estimate of 21.4%.
Net profit for the quarter also stood at ₹304.3 crore from ₹415 crore earlier.
Higher other expenses impacted Pidilite’s operating performance during the quarter. The company made higher investments in brands and customer facing initiatives.
Additionally, it also incurred an exceptional loss of ₹71.7 crore on sale of shares in one of its subsidiary.
The management said that it sees some near-term softness in the business, though it remains optimistic on the company’s medium term prospects.
Among factors that worked for Pidilite during the quarter, revenue beat estimates, consumer business saw volume growth of 12.7% and gross margin saw healthy expansion.
Brokerage firm Citi has a “sell” rating on Pidilite with a price target of ₹2,200. It called the results a miss on all fronts.
Out of the 19 analysts that track Pidilite, eight of them have a “buy” rating on the stock, while seven of them have a “sell” call.
Shares of Pidilite are trading 5% lower at ₹2,806.4. The stock is still up 4% in 2024 so far. This is the biggest single-day drop seen by the stock since January this year.
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