Business Wire IndiaPidilite Industries Ltd., India’s leading manufacturer of adhesives, sealants and construction chemicals, announced its financial results for the quarter and half ended September 30, 2020.
Overall, consumer and market segments returned to growth, reaching pre-Kovid levels in most geographic areas. Vikas was healthy in construction chemicals and DIY products. The B2B segment continued to face headwinds, although it indicated recovery in the latter half of the quarter.
International subsidiaries have reported healthy double-digit sustained currency growth.
Domestic subsidiaries saw challenging business conditions. However, the performance has steadily improved during the quarter.
On 28 October 2020, the company entered into a definitive agreement with the Huntsman Group (USA) to purchase a 100% stake in one of its subsidiaries Huntsman Advanced Materials Solutions Private Limited (HAMSPL) in India. 2100 crores, excluding customary working capital and other adjustments. The Huntsman Group is a major global producer of differentiated organic chemical products. HAMSPL manufactures and sells adhesives, sealants and other products under well-known brands such as Arnolite, Ardalite Carpenter and Arsial. On 3 November 2020, the company completed the acquisition of a 100% stake in HAMSPL.
- Net sales grew 3% from Rs 1,857 crore in the same quarter last year. Half year net sales stood at Rs 2,730 crore and declined by 28% over the same period last year.
- EBITDA increased by Rs 514 crore before non-operating income in the same quarter last year due to lower input costs and A& SP expenses, a 39% increase over the same quarter last year. EBITDA for the half year period stood at Rs 582 crore and declined by 29% in the same period last year.
- Profit before tax and extraordinary items (PBT) increased by 27% to Rs 479 crore compared to the same quarter last year. The PBT for the half year stood at Rs 510 crore and declined by 37%.
- Profit after tax (PAT) increased by Rs 357 crore in the same quarter last year, due to a decrease in tax compared to the previous year with a decrease in the corporate tax rate in the same period last year. At the end of the half year, PAT 372 crore declined to 40% (eg the base PAT declined by 37%).
- Net sales stood at Rs 1,620 crore in the same quarter last year, up 4% compared to the same year last year and up 3.6%. This was driven by a 7.4% increase in sales volume and a 7.2% drop in the mix of C&B and B2B sales and a mix of B2B. Half year net sales stood at Rs 2,388 crore and declined by 28% over the same period last year.
- EBITDA grew by 35% on the basis of lower input costs and A&SP expenses in the same quarter last year, before non-operating income of Rs 473 crore. EBITDA stood at Rs 570 crore for the half year and declined by 26% over the same period last year.
- Profit before tax and extraordinary goods (PBT) increased by Rs 455 crore compared to the same quarter last year. The PBT for the half year stood at Rs 532 crore and declined by 33%.
- The PAT increased by 5% to Rs. 339 crores in the corresponding quarter of the previous year (similar to PAT growth of 27% on the basis) with a reduction in the corporate tax rate. For the year ended, PAT declined by 35% at Rs 396 crore (PAT declined by 32% for Aadhaar choice).
Commenting on the quarterly performance, Mr. Bharat Puri, Managing Director, Pidilite Industries Limited said:
“This quarter saw a steady improvement in demand conditions each month. Strong growth in rural and semi-urban areas has led to growth in consumer and market businesses. In B2B businesses as well as metros, the gradual improvement is still to reach pre-Kovid levels. Our profitability was aided by benign input costs as well as strong cost optimization measures.
While we are seeing signs of input costs getting tighter, we remain optimistic on the continued demand improvement. Our focus will be to drive continued growth in our brands through investment in sales and distribution and in consumer relevant innovation. “
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