Pidilite Industries Limited, India’s leading manufacturer of adhesives, sealants, and construction chemicals, has announced its financial results for the quarter and half-year ending September 30, 2024. The company’s Q2 revenue surged by 7%, underpinned by an 8% increase in Underlying Volume Growth (UVG). Despite the initial impact of monsoon rains on its Consumer and Bazaar (C&B) segment, the rural markets outpaced the urban ones, contributing significantly to this growth.

Strong Performance Across Segments

Pidilite’s Business-to-Business (B2B) vertical continued to demonstrate robust growth momentum, recording a UVG of 21% due to the performance of its industrial and project divisions. The company’s overall UVG for the first half of FY24-25 stood at 9%, with the C&B segment posting a 7% increase, and the B2B segment seeing an impressive 19% rise. This broad-based growth showcases Pidilite’s resilience and adaptability amid challenging market conditions.

Additionally, Pidilite benefited from lower input costs, leading to a gross margin expansion of 281 basis points (bps) for Q2 compared to the same period last year. EBITDA margins for the quarter rose to 24.6%, up by 143 bps year-on-year. For the first half of the year, gross margin improvement reached 376 bps, and EBITDA margins were recorded at 24.6%, an increase from 23.0% last year.

Expert Insight: Growth Initiatives and Outlook

Managing Director Bharat Puri highlighted Pidilite’s robust growth and profitability in the first half of the financial year. He noted the company’s optimism for the second half, supported by favorable monsoon conditions, increased government expenditure, and a rise in new construction activity. He also mentioned that Pidilite remains vigilant regarding geopolitical developments while continuing to invest in growth-focused initiatives and building a future-ready supply chain.

Despite the adverse weather earlier in the quarter, Pidilite’s focus on expanding its rural reach and enhancing its distribution network contributed significantly to its performance. The company’s working capital situation remained healthy, translating into strong cash flows.

Financial Performance Breakdown

Pidilite’s consolidated net sales for Q2 reached INR 3,223 crore, representing a 7% growth year-on-year. For the half-year ending September 30, 2024, net sales stood at INR 6,607 crore, marking a 6% increase compared to the same period last year. Excluding the contributions from its international subsidiaries—Pidilite USA and Pulvitec Brazil—the figures remained robust.

Standalone performance figures indicated that Pidilite’s Q2 net sales amounted to INR 2,965 crore, also showing a 7% rise. Standalone EBITDA grew by 14% to INR 731 crore, and profit before tax (PBT) increased by 18% to INR 720 crore. Profit after tax (PAT) for Q2 rose by 19%, reaching INR 542 crore.

For the half-year period, Pidilite’s standalone net sales totaled INR 6,099 crore, up 7%, while standalone EBITDA grew by 14% to INR 1,502 crore. PBT for the period increased by 18% to INR 1,462 crore, and PAT stood at INR 1,094 crore, reflecting a 19% growth.

Outlook: Strategic Investments to Drive Future Growth

Pidilite continues to invest heavily in its manufacturing capabilities and distribution network. By upgrading existing facilities and building new ones, the company aims to meet the growing demand for its wide range of products, including adhesives, construction chemicals, and polymer emulsions. Pidilite’s in-house R&D efforts further support the development of innovative solutions, ensuring that the company remains at the forefront of its industry.

As the company moves into the second half of FY24-25, its management remains optimistic about continued growth, supported by favorable market conditions and strategic government initiatives. However, they remain cautious about external risks, particularly geopolitical developments, that could affect global supply chains and input costs.

  Bharat Puri, BSE, Fevicol, M-Seal, Mumbai, NSE, Pidilite Industries Limited