PIDILITE INDUSTRIES LTD. - 500331 - Compliances-Certificate under Reg. 74 (5) of SEBI (DP) Regulations, 2018
Certificate under Regulation 74(5) of SEBI (Depositories and Participants) Regulations, 2018 quarter ended 31.03.202109-04-2021
09-04-2021
Tile adhesive brand Roff to strengthen its presence in Kerala
Roff, a leading tile and stone solutions brand from the house of Pidilite Industries, has unveiled several initiatives to strengthen its presence in25-03-2021
Pidilite Industries Ltd - 500331 - Closure of Trading Window
Intimation of closure of trading window24-03-2021
PIDILITE INDUSTRIES LTD. - 500331 - Announcement under Regulation 30 (LODR)-Analyst / Investor Meet - Intimation
Intimation of Schedule of Analyst/Institutional Investor Meetings under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 201522-03-2021
Pidilite Industries Ltd - 500331 - Compliances-Reg. 39 (3) - Details of Loss of Certificate / Duplicate Certificate
Intimation as per Regulation 39(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 201508-03-2021
PIDILITE INDUSTRIES LTD. - 500331 - Compliances-Reg. 39 (3) - Details of Loss of Certificate / Duplicate Certificate
Intimation as per Regulation 39(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 201502-03-2021
PIDILITE INDUSTRIES LTD. - 500331 - Announcement under Regulation 30 (LODR)-Allotment of ESOP / ESPS
Allotment of equity shares pursuant to Employee Stock Option Plan-2016 (ESOP-2016)26-02-2021
PIDILITE INDUSTRIES LTD. - 500331 - Shifting Of Registered And Operating Office Of Registrar And Share Transfer Agent Of The Company
Shifting of Registered and Operating Office of Registrar and Share Transfer Agent of the Company24-02-2021
Pidilite Industries works to protect its moat
By Suhani Adilabakar From an adhesive company, Pidilite Industries has evolved into a mega home improvement organization. The business boasts of more than 6,000 SKUs of 600 products, 27 facilities, 4700 distributors in India and presence across 80 countries. Glued to growth, Pidilite Industries has been a wealth compounder for the past ten years. Its stock price has increased more than 1,100% since 2011. And the company’s business has rebounded after it was impacted due to lockdowns at the beginning of 2020-21. Quick Takes: Consumer & bazaar segment, constituting 80% of total revenues, reported revenue growth of 25% YoY in Q3 FY21 with volume growth of over 20% Inflationary pressure on raw material costs is elevated due to rising crude prices, which might impact margins in the coming quarters Roughly 50% of Pidilite’s raw materials are crude oil derivatives and raw materials made up 55% of total expenditure in Q3 The company has 11 upcoming new facilities, three for core categories, six for new categories in India, and two facilities in international locations December quarter shows recovery is on track, although input costs rise Driven by the consumer & bazaar segment and overseas business, Pidilite reported a healthy performance in the quarter ended December 2020 beating the street’s expectations. Consolidated revenues rose 19% YoY to Rs 2,299 crore in Q3 FY21. Overseas subsidiaries performed strongly reporting double-digit constant currency revenue growth. Operating profit came in at Rs 640 crore compared to Rs 463 crore in the same period a year ago. The company’s margins expanded 383 bps YoY to 27.87% in Q3 FY21 supported by favourable input costs and lower discretionary spends. Net profit rose to Rs 442 crore in the December quarter compared to Rs 342 crore same period previous year rising 29% YoY. Pradip Menon, CFO at Pidilite said, “The company is closely tracking the rising raw material and packaging materials prices with the objective to operate within the targeted EBITDA margins of 21% to 24%”. The cost of a key raw material, VAM (vinyl acetate monomer - crude oil derivative) has increased from $750 to $1,200 over the past few months and currently hovers around $1,300 per metric tonne. Consumer & Bazaar leads the way The company operates under two major segments, consumer & bazaar and business to business. Consumer & bazaar business constitutes adhesives, sealants, art & craft materials and construction & paint chemicals. This wide spectrum of products catering to carpenters, painters, plumbers, households and students makes up nearly 80% of total revenues. The consumer & bazaar vertical reported one of the highest growth rates in the quarter ended December 2020, with revenues rising 25% YoY and volumes growing in excess of 20%. On the other hand, the business-to-business segment (B2B) saw muted revenue growth of just 2.6% YoY. This segment manufactures industrial adhesives, industrial resins, construction chemicals, organic pigments etc, servicing packaging, joineries, textiles, paints, printing inks, paper and the leather industries. While the B2B segment is still a laggard as industrial activity and manufacturing units are not functioning at full capacity, the consumer & bazaar segment is delivering a strong performance. Rural areas and small towns were outpaced by urban areas in terms of growth till 2019. But now they are witnessing a strong revival. Rural and semi-urban or small towns are seeing double-digit growth supported by government measures such as MGNREGA, higher MSP and reverse migration. And it is these rural and small-town regions that constitute 30% of consumer & bazaar business, a major growth driver for the entire revenue mix. For Pidilite, the rural revenue pie returned to double-digit growth in the June-July period, mainly driven by construction chemicals (waterproofing) and do-it-yourself or DIY products. Waterproofing revenues have been relatively less impacted. These are largely dependent on IHB (individual houses & buildings) and one-two storeyed constructions outside metro and large cities. In Q3 FY21, the recovery of tier 1 & 2 cities also added to the growth mix, along with revenue contribution by recently acquired Huntsman Advanced Materials Solutions. Excluding Huntsman (renamed as Pidilite Adhesives), revenue growth would have been lower at 16% for the December quarter FY21. Economic moat and acquisitions to drive future growth With near monopoly status in many of its product categories, the company has been able to restrict competition by maintaining lower price premiums in the range of 10-15%. Revenue growth has been in single digits with a CAGR of 8% over the past five years. To counter this, Pidilite’s transformative journey started in 2015 under the leadership of its first non-promoter Managing Director Bharat Puri. With faster decision making and a higher focus on innovation, the company started looking into joint ventures (JV) and acquisitions. Whether it was acquiring Nina waterproofing, the JV with ICA for wood finish products, the acquisition of CIPY Poly Urethanes for entry into resin flooring or the JV with Litokol (Italy) for epoxy tile adhesives, Pidilite has been filling the white spaces in its home improvement product stable. And the list goes on. Its most recent deal was the Rs 2,100 crore acquisition of Huntsman India, the subsidiary of Huntsman Group USA, for its Araldite, Araldite Karpenter and Araseal brands in India. Araldite is the market leader in epoxy adhesives. Among these new businesses, Pidilite is looking for the next Dr. Fixit and M-Seal to keep the future flywheel moving. Keeping competition at bay Pidilite has segregated its product portfolio into three categories - core, growth and pioneer. Fevicol, Fevikwik, Fevistick, M-Seal belong to the core category. Waterproofing solutions come under the growth category, and new businesses such as resin flooring, wood finish products, epoxy adhesives come under the pioneer category. The company has 11 new upcoming facilities, 3 for core, 6 for new categories in India and 2 facilities in international locations. Pidilite aims to garner two-third of its growth mix from core categories and the balance from growth and pioneer in the near future. In addition to focussing on core categories and timely acquisitions, Pidilite’s superior product innovation, strong connect with consumers, in-house R&D;, and extensive distribution scale has also kept competition at bay. After facing one of the worst quarters in Pidilite’s history in the June quarter, the company seems to be back on the road to recovery. Or will there be speed bumps due to rising raw material prices? The next few quarters will give a better picture.19-02-2021