GST Impact: Normalcy To Return Towards Year-End For Pidilite
Pidilite’s profit falls on GST, higher raw material prices.
Adhesive maker Pidilite Industries Ltd.’s quarterly profit and margins fell as input costs rose and distributors cut stock fearing disruption during transition to the Goods and Services Tax.
Net profit fell nearly 17 percent to Rs 226 crore as the cost of raw materials rose 10.3 percent, the company said in an exchange filing.
Normalcy will be restored by the third quarter ended December as the GST impact may also be felt in July-September, Aprurva Parekh, executive director of Pidilite, told BloombergQuint over the phone. The company increased prices to mitigate the impact, he said.
The company’s volume mix remained relatively constant but the product mix might change as potential segments like chemical, construction and paints assume greater significance, said Parekh.
I do not see product mix contributing greatly to the gross margins, that will mostly be impacted by increasing prices of key raw materials.Apurva Parekh, Executive Director, Pidilite
Pidilite’s earnings before interest, tax, depreciation and amotisation fell 19.2 percent to Rs 321 crore and EBITDA margin contracted 16.9 percent from 25.3 percent quarter-on-quarter.