Pidilite Ind Q4 net profit dips 34%

Adhesive maker Pidilite Industries share price slumped 2.5% to Rs 1,398.80 as higher exceptional items drained its net profit during the Jan-Mar quarter.

On Wednesday, the company reported a 33.92% decline in its consolidated net profit to Rs 156.51 crore for the fourth quarter ended March 31. The company had posted a net profit of Rs 236.87 crore for the January-March period of 2018-19.

The company’s profitability was impacted due to exceptional items representing impairment loss on plant and machinery at Dahej Elastomer Project amounting to Rs 33 crore for the quarter and Rs 55 crore for the full fiscal year.

Its revenue from operations declined to Rs 1,544.68 crore for the fourth quarter as compared with Rs 1,639.28 crore in the same period of 2018-19.
However, EBITDA, before non-operating income stood at Rs 303 crore, up by 9% on year.

For the full financial year 2019-20, the company posted a net profit of Rs 1,122.05 crore as compared with Rs 928.39 crore in 2018-19.

As observed by several companies, Pidilite too suffered from the lockdown on account of the pandemic as well as related disruptions in the supply chain. Though, topline growth remains subdued, earnings have improved substantially, primarily as a result of softer input costs.

The company will remain cautious and focused on restoring volumes enabled by investments in brand building, growth categories, capabilities and sales and distribution.

In April’20 sales ground to a halt due to closure of most markets, in May and June, the company has seen the country open up for business gradually with Rural markets restarting quicker vis a vis Urban markets.

The sharp decline in crude prices is likely to provide strong relief to paint and adhesive companies as the recovery in their sales would be much delayed due to labour shortage.

Net net we believe that the current year is likely to remain a tough year for Pidilite and hence growth mpmemtum is expected to start from FY22 onwards ahead.

Disclaimer –
This document is meant for the recipient only for use as intended and not for circulation. This document should not be reproduced or copied or made available to others. The information contained herein is from the public domain or sources believed to be reliable. While reasonable care has been taken to ensure that information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. Also above note is not a recommendation to Buy or SELL and is only a view based on facts and figures and we will be in no way responsible for any losses incurred by anyone who uses this information to either trade or invests securities mentioned herein.