Pidilite Industries Ltd’s March quarter (Q4FY25) makes one factor clear: quantity progress is resilient and the momentum is being sustained by demand. Consolidated revenues grew 8.2% year-on-year to ₹3,141 crore, backed by standalone underlying quantity progress of 9.8% throughout classes and geographies. Quantity progress is at a multi-quarter excessive.
Gross revenue margin rose by 160 foundation factors (bps) to 55%, which is an 18-quarter excessive, in line with information from Motilal Oswal Monetary Providers. Margin bought help from benign enter prices, particularly vinyl acetate monomer (VAM), which averaged $880 a tonne in This fall, down from $925 a tonne final 12 months.
Nonetheless, year-on-year Ebitda margin enlargement was smaller at 26 bps to twenty.1%. In reality, the metric fell as a lot as 356 bps versus Q3 as Pidilite ramped up promoting spends and incurred a one-time employees value adjustment.
For the total 12 months, Ebitda margin has expanded 106 bps to virtually 23% in FY25. Pidilite’s working margins are excessive, and it is going to be essential to watch whether or not the corporate can maintain such excessive ranges, reckon Motilal Oswal’s analysts in a 9 Could report.
Pidilite’s administration is guiding for double-digit quantity progress in FY26 (home enterprise), regardless of a excessive FY25 base when quantity progress was 9.3%. The corporate is banking on a post-election development push, rural tailwinds, and innovation-led launches similar to Fevicol Hello-PER Star. City demand, which improved in This fall, is prone to maintain. That mentioned, the corporate is watchful of the influence of unsure world financial and geopolitical circumstances.
In the meantime, Pidilite’s essential shopper & bazaar (C&B) section, forming 81% of FY25 standalone revenues, noticed 8% quantity progress in This fall. Standalone C&B Ebit margin was up 60 bps year-on-year to 26.4%. Rural demand continued to outperform and concrete confirmed a sequential pickup.
The remainder of the standalone income in FY25 got here from industrial business-to-business (B2B), which noticed a lot greater quantity progress of 16.4% in This fall, led by rising development demand and a shift to built-in, system-based options via Pidilite Skilled Options.
A richer venture combine and working leverage aided profitability, taking Ebit margin to a report 18.3%, up 710 bps. B2B put up a strong present for FY25 as properly, clocking Ebit progress of 53%, which was far forward of 9% C&B Ebit progress. Pidilite expects B2B progress and margin tailwinds to maintain, supported by robust infra demand and deeper engagement with EPCs and consultants.
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What subsequent?
Going forward, buyers will monitor if the corporate can maintain Ebitda margin. Whereas decrease enter prices, notably crude-linked derivatives, supply respite, these tailwinds might not final.
This fall noticed a pointy spike in worker bills attributable to one-off provisions, and the room for additional margin enlargement seems restricted except income progress accelerates meaningfully. Administration is concentrated on hanging the appropriate steadiness between pricing, market share, and profitability—prioritising long-term sustainability over short-term margin features.
Plus, a powerful steadiness sheet augurs properly. “Pidilite is properly positioned to maintain progress, sustained improvements, tie-ups to deliver technologically superior merchandise and 2-4x progress in pioneer and progress classes (45% of gross sales),” mentioned a PL Capital report dated 12 Could. “Close to time period margin outlook appears high quality, though margins go away little scope of enlargement from present ranges,” they added.
On this backdrop, valuations should not precisely mouth-watering. Pidilite’s shares commerce at 65x FY26 estimated earnings, in line with Bloomberg estimates—a valuation that assumes sturdy progress acceleration.
If value tailwinds fade and world headwinds persist, execution might want to stay hermetic. Pidilite might want to show that this volume-led comeback has endurance.
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