Udeesha Tomar
AVP - Strategy and Solutions
Leading procurement research solutions across chemicals, materials, and food & beverages, with expertise in price forecasting and market analytics.
The Decrease In Prices Of The Key Input Vinyl Acetate Monomer (VAM) Is Leading To A Rebound In Margins For Pidilite Industries Ltd
-1.webp&w=1080&q=75)
May 11, 2023
Pidilite Margins Recover, Still Few Challenges Remain
In spite of Pidilite's (a prominent adhesives manufacturer) positive outlook for margin, the company's Q4 results remain dull in other important areas. However, the company witnessed a significant recovery as the prices for VAM (vinyl acetate monomer), a key raw material, dipped. Hence, Q4 FY23 hit a notable net margin of 46. 8 percent for the company. This price drop gave some ease to the manufacturer of Fevicol, which was crushing under the high input costs as well as sour investors' sentiments.
Request Access For the Latest Price Trends of Vinyl Acetate
Prices of VAM sharply fell compared to Q2FY23 as spot VAM prices are trading at USD 930/million tonne, lower by 62% compared to its peak. But, there is hope for a recovery in margins from Q1FY24, considering the FY23-25 profits per share CAGR of 37%.
However, taking all factors into consideration, the Q4 results (FY23) of the company were unsatisfactory in terms of revenue which was INR 2689.3 crores failing to hit the consensus estimations. As a consequence, the company stocks fell on the National Stock Exchange by 1.3 per cent.
Despite this miss, it's main consumers, and bazaar business reported a 7 percent YoY growth in volume in FY2023 Q4, whilst the B2B vertical battled with lower exports. Still, the aforesaid factors did not affect the improvement in demand outlook for rural and semi-urban areas.
According to the article by Procurement Resource, Pidilite's FY2023 Q4 earnings failed to impress on a revenue basis, generating INR 2689.3 crores which did not meet the consensus estimations. However, the company's outlook stayed positive in light of the recent price drop for VAM (vinyl acetate monomer), a key raw material that relaxed input costs and investor worries.
Read More About Vinyl Acetate Production Cost Reports - Get Free Sample Copy in PDF
Taking the current scenario into account, the management is uncertain about the short-term outlook and wallows in the looming fears of rising competition in the under-penetrated waterproofing segment.
About the Author
Recent News & Articles
PVC and VCM Site in Germany Changes Hands as Westlake Deal Closes
New Biofuel Blending Rule Tightens Soybean Oil Outlook
Global Dairy Trade Relocates to Singapore as Milk Markets Adjust
Huber Calcium Carbonate Supply Reaches New Southeast States Through Superior Materials Deal
Coffee Prices Fall as Drier Weather Lets Brazil Harvest Resume
Tags
- Access independent price trends and market intelligence for thousands of raw materials.
- Request customised production cost and prefeasibility reports for specific plants or locations.
- Explore subscription dashboards for continuous tracking of prices, indices, and news.
- Commission bespoke research on categories, suppliers, or trade flows tailored to your brief.
Our Team will be happy to assist you
We are Just a Text away
