Volume growth is very healthy: Pidilite Industries MD, Bharat Puri
Bharat Puri revealed that there is a slowdown in the market in terms of near-term growth of all consumer goods. He also attributed the slowdown in first quarter due to elections.
Pidilite Industries on Tuesday reported a consolidated net sales growth of 11% over the same quarter last year, and comparable net sales growth of 17% for financial year for the quarter and year ended March 31, 2019, according to a company statement. Zee Business TV spoke to Bharat Puri, Managing Director, Pidilite Industries Ltd, about the quarterly results.
When asked about volume growth and the challenges, Puri said, "We don't manage business as per quarter, rather we do it as per an year. Since input costs have increased in the year, and we took pricing at the end of December, therefore, Q3 looks much better, and Q4 looks a little depressed. However, overall volume growth in the second half is 9% in consumer and bazar growth, and for the year it is 12.5% which is a very healthy."
Further, Puri revealed that there is a slowdown in the market in terms of near-term growth of all consumer goods. He also attributed the slowdown in first quarter due to elections. he said, "Frankly, in consumer goods, in more than anything else, if there is a good monsoon, we will be back to normalcy in the second quarter."
When asked about IL&FS exposure and provisioning the company had to do against it, Puri said, "Yes, in this year's account total exposure was about a little over Rs 11 crore." He added that this is why PAT is little less - one time write off to IL&FS exposure. "Now there is no exposure to IL&FS," he added.
On whether there was an impact of crude and rupee movements on the margins of the company, Puri said, "In this quarter, crude and rupee movement have been favourable to us. If you look at gross margin in this quarter, it is 3% better in comparison to the last quarter."
"Since input costs have now moderated, Q1 gross margin will witness more improvement, but what will happen in the second half as far as crude and rupee movement is concerned, is that it can't be predicted," he said, and addded, "We will manage as we go along."
When asked if there is any segment where he saw a reason to be concerned about, Puri said that in this quarter, overall performance across all the categories, growth was quite good and that it is in double digits. The company's market share has not decreased rather, it has increased, said.
On updates related to new units and new plans being launched in new geographies, Puri said, "In Bangladesh, we are already a leader, as our one factory is running, and its capacity is full. In July, our second facility is also ready to start. The third facility in Sri Lanka is also gaining capacity, while our new units are also coming up in Ethiopia and Kenya."
#CorporateRadar | देखिए #Pidilite के मार्च तिमाही नतीजों पर कंपनी के MD भरत पूरी की खास बातचीत।#ResultsOnZB pic.twitter.com/f5zfbJTeva
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According to the company statement, Pidilite Industries' Consolidated performance is given below:
1. Net sales at Rs 1,631 Cr grew by 11% over the same quarter last year. Comparable net sales for financial year 2018-19 stood at Rs 7,035 Cr and grew by 17% (excluding the sales of Cyclo Division of Pidilite USA Inc which was sold by Pidilite USA Inc in June 2017) over the previous financial year.
2. EBITDA before non-operating income stood at Rs 279 Cr and grew by 2% over the same quarter last year, given the input cost led contraction in gross margins by 1.6%. EBITDA for financial year 2018-19 stood at Rs 1,376 Cr and grew by 2% over the previous financial year given the Input cost led contraction in gross margins by 3%.
3. Profit after tax at Rs 237 Cr declined by 4% over the same quarter last year. Exceptional items represent diminution / impairment in value of investments made by subsidiaries for the quarter ended March 2019 amounting to Rs. 11 Cr and for the full financial year Rs 18 Cr Current tax for the quarter includes Rs 53 Cr (Rs 46 Cr In previous year) being excess provision of earlier years now written back. For the full financial year 2018-19, profit after tax at Rs 928 Cr declined by 4% over the previous financial year.
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