BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
While Pidilite Industries Ltd.’s Ebitda and profit after tax were in-line, healthy sales momentum (two-year compound annual growth rate of ~21% in Q2 FY22) led to a significant sales beat, even as material cost pressures remained high.
Vinyl acetate monomer costs have nearly tripled in recent months over H1 FY21 levels after a relative drop over June–July 2021.
Good volume momentum and price increases (already healthy in the double digits, with more likely to come) would keep the sales momentum intact, even as margins continue to be under pressure.
Three factors highlight that Pidilite Industries has been able to manage steep cost inflation better versus paint companies (which also have a similarly large proportion of crude-related raw materials):
its near monopoly in adhesives,
the absence of mix deterioration, and
material costs peaking earlier compared with paint companies.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
As a Subscriber you get
Stories
RECOMMENDED FOR YOU
POPULAR