Pidilite Industries Q1 FY24 results: Profit rises 32% to Rs 474 crore; brokerage sees stock at Rs 2,649

Pidilite Industries Ltd on Thursday reported a 32 per cent rise in its consolidated year-on-year (YoY) net profit, at Rs 474 crore, during the first quarter of the financial year 2023-24 (Q1 FY24). Net sales came at Rs 3,264 crore, 6 per cent higher over the same quarter last year. EBITDA before non-operating income stood at Rs 707 crore, up 34 per cent over the same period a year ago. On a standalone basis, profit after tax (PAT) grew by 40 per cent YoY, at Rs 468 crore YoY. Net sales rose 6 per cent YoY.

"The current quarter's standalone revenue growth was underpinned by strong underlying volume growth of 8 per cent (UVG: refers to volume growth including impact of change in product mix). This growth was on last year's growth of 62 per cent, showing a healthy two-year CAGR of 31 per cent. The domestic Consumer and Bazaar segment underlying volumes grew by 12 per cent with both urban and rural markets growing in double digits," the company stated in an exchange filing. Consolidated revenue growth was also driven by strong volume growth, it added.

"Domestic subsidiaries continued to deliver robust sales growth driven by Consumer and Bazaar businesses. EBITDA margins also improved. International subsidiaries (excluding Pidilite USA Inc.) sales were in line with previous year, largely due to uncertain economic conditions, currency devaluation challenges in some countries and local inflation pressures. EBITDA was flat compared to last year," the adhesives maker further said.

Bharat Puri, Managing Director at Pidilite Industries Ltd, said, "We started the year on a strong note with our domestic consumer businesses delivering robust volume growths. B2B, exports and international business continued to face sluggish demand conditions. A combination of moderating input prices and operational efficiencies saw our gross margins improve substantially. Part of this was reinvested in our brands and growth facing initiatives. Looking ahead, growths will largely be volume led. A good monsoon, increased construction activity and stable input prices enable us to look at the future with increased optimism."

Brokerage Prabhudas Lilladher (PL) has given a 'Hold' rating on the counter with a target price of Rs 2,649. "We expect margins to remain healthy barring any upward spike in VAM (Vinyl acetate monomer) prices and currently factor in FY23-25 EPS CAGR of 37 per cent. We have a Hold rating on the stock with a target price of Rs 2,649," it stated.

The stock currently trades at 53.3x FY25 EPS (Earnings per share), PL further said. The scrip today slipped 2.76 per cent to trade at Rs 2,532.90. Around 65,000 shares changed hands today on BSE, over three times higher than the two-week average volume of 18,000 shares. Turnover on the counter was last seen at Rs 16.53 crore, commanding a market capitalisation (m-cap) of Rs 1,28,786.64 crore.

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