Price hikes to help Pidilite meet profitability guidance
Benchmarks Nifty23,053.10116.35FEATURED FUNDS★★★★★UTI Aggressive Hybrid Fund Regular Plan-Growth5Y Return9.02 % Invest NowFEATURED FUNDS★★★★★Motilal Oswal Midcap Fund Direct-Growth5Y Return18.55 % Invest NowEnter search…
Pidilite Industries, known for its Fevicol adhesive, anticipates maintaining profitability between 20-24% through price hikes. Managing Director Sudhanshu Vats indicated a 4-5% price increase, with potential for another rise in the March quarter. The company increased prices by 12% in the June quarter following fluctuating input costs, notably for vinyl acetate monomer. Pidilite's consolidated profit increased by 7% year-on-year, with sales rising over 21%.
Mumbai: Pidilite Industries expects to maintain profitability within its guided range of 20-24%, as price hikes help cushion the impact of rising input costs, managing director Sudhanshu Vats said.The maker of Fevicol adhesive raised prices by 4-5% earlier this month and, if needed, will consider another 2-3% increase in the March quarter, Vats said on a call.
The company had increased prices by 12% in the June quarter, and followed it up with small hikes in the three months till end-September.
Pidilite’s consolidated Ebitda (earnings before interest, tax, depreciation and amortisation) margins for the September quarter stood at 20.5%, while that for the first half of the fiscal year was 23.5%.
“Our first quarter was well in excess of the guidance at 26.3%, while quarter two has come at 20.5%, so there is considerable fluctuation in the Ebitda margin,” Vats said.
Live Events
He cited the example of vinyl acetate monomer (VAM), a key raw material used for making adhesives, such as Fevicol. After the onset of the West Asia crisis, prices of the chemical surged to $2,000 per tonne from $800-900 earlier. Prices then saw a sharp cooling off, coming down to $900-1,000 per tonne at the start of the September quarter, only to see a sharp rise again towards the end of the quarter.
The cost of VAM in the June quarter was around $1,350 per tonne, and it rose to $1,600 per tonne in the September quarter. “This compares to $880 (in the previous year). So it is almost 2X. But despite that, we’ve managed within our corridor,” Vats said.
Given the uncertain and volatile times, the company’s management of pricing will be more dynamic, Vats said.
Pidilite reported its earnings for the September quarter earlier this week. Its consolidated profit rose 7% year-on-year, while sales were up more than 21%.
Add as a Reliable and Trusted News Source Add Now!
(You can now subscribe to our Economic Times WhatsApp channel)
Read More News onfinancial performancepidilite industriesPidilite IndustriesFevicolinput costsEBITDA marginsvinyl acetate monomerPidilite price hikesVAM pricesPidilite profitability guidance
(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.)
...moreless(You can now subscribe to our Economic Times WhatsApp channel)
Read More News onfinancial performancepidilite industriesPidilite IndustriesFevicolinput costsEBITDA marginsvinyl acetate monomerPidilite price hikesVAM pricesPidilite profitability guidance
(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.)
...morelessContinue reading with one of these options:Limited AccessFreeLogin to get access to some exclusive stories& personalised newslettersLogin NowUnlimited AccessStarting @ Rs120/monthGet access to exclusive stories, expert opinions &
in-depth stock reportsSubscribe NowET
Unlock Access to All Exclusives with ETPrime FREE TRIAL
15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers
Trial offer expiring in00 : 05 : 00
I'd rather pay ₹2599 nowUh-oh! This is an exclusive story available for selected readers only.
Worry not. You’re just a step away.
Prime Account Detected!
It seems like you're already an ETPrime member with
Login using your ET Prime credentials to enjoy all member benefits
Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.
Unlock ETPrime's Exclusive Stories Today!
Big Price Drop! Flat 40% Off
Student Only OfferAlready a Member? Sign In nowAlready a Member? Sign In nowAlready a Member? Sign In nowOffer Exclusively For You
Save up to Rs. 700/-
ON ET PRIME MEMBERSHIP
Avail OfferOffer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail OfferOffer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail OfferOffer Exclusively For You
Get Flat 40% Off
Then ₹ 1749 for 1 year
Avail OfferOffer Exclusively For You
ET Prime at ₹ 49 for 1 month
Then ₹ 1749 for 1 year
Avail OfferSpecial Offer
Get flat 40% off on ETPrime
Avail OfferAvail OfferClaim NowAlready a Member? Sign In nowNeed Assistance?
Connect with an ETPrime expert for personalized support and guidance
+91 9484700004'; }); } if(listing) { var h3 = "You tried reading " + listArr.length + " locked stories in the past " + threshold + " days.", h4 = "Become an ET Prime member and don't miss out on these exclusive stories."; var html = '' + h3 + '
' + h4 + '
- ' + listing + '
What’s Included with
ETPrime Membership
1Exclusive Insights That Matter
Uncover the truth with our investigative stories
Make strategic moves using the real-world case studies
Read industry-specific stories to identify emerging trends
Spot opportunities with in-depth insights that matter
Trump temper on H-1B visas is forcing Indians to do these things to stay put in US
What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.
Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?
The problem with lab grown diamonds
Why a falling rupee is a better option for the economy
A list of top 20 momentum stocks that have delivered massive returns in one year
2Invest Wisely With Smart Market Tools & Investment Ideas
Alpha Trade
Get daily trade ideas from SEBI-registered research analysts.
Investment Ideas
Grow your wealth with stock ideas & sectoral trends.
Stock Reports Plus
All-in-one stock research with Stock Score, peer comparison & key signals.
BigBull Portfolio
Get to know where the market bulls are investing to identify the right stocks.
Stock Analyzer
Check the score based on the company's fundamentals, solvency, growth, risk & ownership to decide the right stocks.
Market Mood
Analyze the market sentiments & identify the trend reversal for strategic decisions.
Stock Talk Live at 9 AM Daily
Ask your stock queries & get assured replies by ET appointed, SEBI registered experts.
3Stay informed anytime, anywhere with ET ePaper
ePaper - Print View
Read the PDF version of ET newspaper. Download & access it offline anytime.
ePaper - Digital View
Read your daily newspaper in Digital View & get it delivered to your inbox everyday.
Wealth Edition
Manage your money efficiently with this weekly money management guide.
TOI ePaper
Read the PDF version of TOI newspaper. Download & access it offline anytime.
Deep Explainers
Explore the In-depth explanation of complex topics for everyday life decisions.
Health+ Stories
Get fitter with daily health insights committed to your well-being.
Personal Finance+ Stories
Manage your wealth better with in-depth insights & updates on finance.
5Enjoy Complimentary Subscriptions From Top Brands
Stream new documentaries from all across the world every day.
Stories you might be interested in
Figures reflect the source report and its stated period. This article is for information and is not investment advice.
