PL First Cut - Pidilite Industries 2QFY24
PL First Cut – Pidilite Industries 2QFY24 – Amnish Aggarwal – Head of Research - Prabhudas Lilladher Pvt Ltd
Pidilite Industries 2QFY24 – Strong volume growth, margins expansion disappoints
(CMP: Rs2473|Hold)
Financial Performance
> Consolidated Revenues grew by 2.2% YoY to Rs30.8bn(PLe: Rs32bn)
> Gross margins expanded by 1032bps YoY to 51.3%.(Ple: 48.8%)
> EBITDA grew by 36% YoY to Rs6.8bn (PLe:Rs7.3bn); Margins expanded by 550bps YoY to 22.1% (PLe:22.8%)
> PBT grew by 43% YoY to Rs 6.2bn(PLe: Rs6.7bn) Adj PAT grew by 37.4% YoY to Rs4.6bn (PLe:Rs5.1bn)
> Imputed Subsidiary Sales remained flat at Rs3bn; EBITDA grew by 3.9% YoY to 372mn
> Consumer & Bazar Segment ('C&B') grew by 3% while B2B registered 1% decline in revenue due to price adjustments and lower demand from export and export-oriented industries.
Segment wise Performance
> Consumer and Bazaar Sales grew by 3.2% YoY to Rs25.1bn; EBIT grew by 32% YoY to 6935.1mn
> Industrial Products declined by -1.3% YoY to Rs6.2bn; EBIT grew by 38% YoY to 684.5mn
> International subsidiaries (excluding Pidilite USA Inc.) reported moderate sales growth despite uncertain global economic conditions, inflation and currency devaluation challenges in some countries
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PIDI posted 8% UVG in C&B and 20% in B2B which shows sustained growth momentum. We believe festival season and increased construction activity will aid demand in 2H24. VAM prices are stable (subject to geo-political tensions) which can result in further margin expansion in 2H24. We estimate FY23-26 EPS CAGR of 27.5%. We have a Hold rating on the stock.
Stock trades at 54.5x FY25 EPS.