Pidilite's valuation a sore spot

Pidilite Industries Ltd's Q4FY25 makes one thing clear: volume growth is resilient and the momentum is being sustained by demand.

- Manvi Agarwal

Consolidated revenues grew 8.2% year-on-year (y-o-y) to ₹3,141 crore, backed by standalone underlying volume growth of 9.8% across categories and geographies. Volume growth is at a multi-quarter high.

Gross profit margin rose by 160 basis points (bps) to 55%, which is an 18-quarter high, according to data from Motilal Oswal Financial Services. Margin got support from benign input costs, especially vinyl acetate monomer (VAM), which averaged $880 a tonne in Q4, down from $925 a tonne last year. However, y-o-y Ebitda margin expansion was smaller at 26 bps to 20.1%. In fact, the metric fell 356 bps versus Q3 as Pidilite ramped up ad spends and a one-time staff cost adjustment.

For the full year, Ebitda margin has expanded 106 bps to 23% in FY25. Pidilite's operating margins are high, and it will be crucial to monitor whether the firm can sustain such high levels, reckon Motilal Oswal's analysts in a 9 May report.