Indian adhesive maker Pidilite Industries' Q2 profit jumps; to enter lending

Pidilite Industries

08/11/2023 13:37

BENGALURU, Nov 8 (Reuters) - India's Pidilite Industries
 PIDI.NS  on Wednesday posted a jump in second-quarter profit on
the back of lower costs, and said it would enter the lending
business.
    The Fevicol-maker posted a consolidated net profit of 4.5
billion rupees ($54.1 million) for the quarter ended Sept. 30,
up over 35% from last year.
    Profit growth was helped by an over-50% decline in prices of
vinyl acetate monomer (VAM), a key raw material for adhesives,
which analysts said helped adhesive makers keep costs under
control.
    Pidilite's expenses fell nearly 4%, while revenue grew 2.2%.
    The company, which commands a lion's share of India's
adhesive market, acquired Pargro Investments for 100 million
rupees for the new lending business, and said it would invest
one billion rupees over the next two years.
    Pidilite said Pargro, a non-banking financial company, does
not have any lending operations presently and is debt-free as on
Oct. 31.
    "The new business would provide credit to the domain
ecosystem to support their business growth," the company said in
a statement.
    The company had in August said it expected growth to be
volume-led in the near term with increased construction activity
and stable input prices.
    Revenue at its consumer and bazaar segment, which accounts
for over 80% of Pidilite's topline, grew 3%, while revenue from
its business-to-business segment fell over 1%.
    Shares of the company closed up 1.43% ahead of the results.

($1 = 83.2620 Indian rupees)

 (Reporting by Nishit Navin in Bengaluru; Editing by Varun H K)
 ((Nishit.Navin@thomsonreuters.com;))