Pidilite Q1 Results: Domestic consumer business volume growth of 12%, margin beats estimates

Pidilite Industries Ltd.'s domestic consumer business volume growth stood at 12 percent for the June quarter, sources with knowledge of the matter told CNBC-TV18. A poll by CNBC-TV18 anticipated the number to be 8-10 percent.

The company's consolidated revenue growth for the June quarter stood at 5.6 percent to Rs 3,275.1 crore, which was below a CNBC-TV18 poll estimate of Rs 3,410 crore. The company attributed the revenue growth during the quarter to the strong volume growth.

"Looking ahead, growth will largely be volume led," said Pidilite Managing Director Bharat Puri. "A good monson, increased construction activity and stable input prices enable us to look at the future with increased optimism," he added. Puri further said that while domestic business was robust, the B2B, exports and international business continues to face sluggish demand conditions.

Net profit for the period grew by 32.5 percent to Rs 473.7 crore, which was in line with a CNBC-TV18 estimate of Rs 465 crore.

While operating profit or EBITDA grew by 33.5 percent, while margin expanded by 450 basis points from last year to 21.6 percent.

Pidilite's Gross margin expanded year-on-year as well as on a sequential basis. Gross margin for the June quarter stood at 49 percent, compared to 41.7 percent last year and 46.8 percent in the March quarter. The company added the gross margin expansion to moderation in input prices along with operational efficiencies.

Part of the gross margin gains were reinvested in the form of increased ad spends and other growth-related initiatives, the company said in a statement.

Among the various business segments, the Consumer & Bazaar segment grew by 9 percent with the domestic business registering double-digit revenue and underlying volume growth. The business to business (B2B) segment registered a decline in revenue in the June quarter, mainly due to lower exports and lower demand from export-oriented industries.

Shares of Pidilite Industries are trading 2.9 percent lower at Rs 2,529.