An employee pours concrete onto a metal plate during testing at an adhesives manufacturing facility in Switzerland. (Photographer: Chris Ratcliffe/Bloomberg)

Q3 Results: Pidilite Industries Says Margin Hit By Higher Oil Prices, Weak Rupee

Pidilite Industries Ltd.’s margin in the reported quarter was largely hurt by higher crude oil prices and a weaker rupee, according to the company’s Executive Director Apurva Parekh.

Parekh said that prices of vinyl acetate monomer or VAM, a crude oil derivative the Fevicol-maker uses to prepare adhesives, increased about 30 percent in the December-ended quarter. This, along with rupee depreciation, impacted its costs.

Pidilite’s profit missed estimates, while its operating margin also contracted to 18.2 percent as compared to 21.7 percent predicted by analysts covered by Bloomberg.

The company, however, expects to reasonably improve its margin figures led by price hikes, moderation in input costs and a stable rupee.

Other Highlights:

  • Not considering major price hikes in the fourth quarter
  • Good growth across many product lines in all geographies
  • Expects steady volume growth, but says macro factors could impact numbers
  • Weak consumer demand in India and globally impacted Industrial growth business
  • New product launches in the coming quarters

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Q3 Result Highlights (YoY)

  • Revenue climbed 20 percent to Rs 1,848 crore
  • Ebitda down 9 pecrent to Rs 336 crore
  • Ebitda margin contracted to 18.2 percent versus 24 percent
  • Net profit down 8.5 percent at Rs 219.5 crore

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