Pidilite Industries reported a good set of second quarter earnings. The consolidate Q2FY18 total income was up 9 percent at Rs 1514 crore and EBITDA was up 17 percent at Rs 377 crore. Margins came in at 24.8 percent and other expenses ratoinalised to Rs 251 crore versus Rs 280 crore year on year.
Throwing more light on the quarterly performance and the outlook going forward, Apurva Parekh, ED, Pidilite Industries said the standalone volume growth of 12 percent for the quarter was driven by 15 percent volume and mixed growth in consumer and bazaar products but industrial product volumes were flat.
The weakness in industrial product volumes is because of impact on exports due to timing difference on orders for some products and secondly, due to higher raw material prices, exporting some products became difficult. However, domestic volumes were in line, said Parekh in an interview to CNBC-TV18.
The other expenses in quarter were lower due to lower advertising and promotional expenses. However, advertising is not uniformly divided through the quarters, he said. In some quarters it can even go up. Advertising expenses are expected to normalise during the next two quarters. Ad spends is about 3.5-4 percent of sales, he added.
Talking about primary and secondary sales, he said there is not a significant difference between them because they work on replenishment model basis.
When asked if the underlying demand situation has improved, he said improvement in their sales could mean there has been improvement in offtake but would be unable to quantify it.
Higher crude prices have led to higher prices of raw materials like vinyl acetate monomer (VAM) and others, and that impacted gross margins for the company in first half, said Parekh.
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