Pidilite Industries Limited, India's leading manufacturer of adhesives, sealants and construction chemicals today announced its financial results for the quarter ended June 30, 2023.
The current quarter's Standalone revenue growth was underpinned by strong Underlying Volume Growth of 8% (UVG: refers to volume growth including impact of change in product mix). This growth was on last year's growth of 62%, showing a healthy two-year CAGR of 31%. The domestic Consumer and Bazaar segment (`C&B') underlying volumes grew by 12% with both Urban & Rural markets growing in double digits. Rural markets continued to grow faster, signalling a gradual recovery in the rural economy. However, Exports of C&B products declined due to challenging demand conditions in the overseas markets.
Consolidated revenue growth was also driven by strong volume growth. Consumer & Bazar Segment ('C&B') grew by 9% with Domestic C&B business registering double digit revenue and Underlying Volume Growth. Business to Business segment ('B2B') registered single digit revenue decline, largely due to lower exports and lower demand from export-oriented industries.
Gross Margins continued to expand both sequentially and year on year, by 260 bps and by 812 bps respectively, mainly on account of moderation in input prices along with operational efficiencies. Part of these gains were reinvested in the form of increased A&SP spend and other growth-related initiatives. We continued to invest behind building capacity for growth and creating a future-ready supply chain. With the aim of upgrading our manufacturing facilities and preparing for the future, we have commissioned seven new plants in the current calendar year.
Domestic subsidiaries continued to deliver robust sales growth driven by C&B 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.
Commenting on the results, Bharat Puri, Managing Director, 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."
