Annual P&L of Pidilite, Material cost has remained at about 55% on the upside and 45% on the downside and other things remains same in terms of percentage except Manufacturing cost (which in on reduction trend due to economies of scale).
Material cost is now cooling down and came back to 47% where it was 3 years ago.
Now let’s look at Jyoti Resins:
Look at Material cost how it has fluctuated over the years.
Manufacturing cost went as high as 20% and as low as 1% (doesn’t make sense at all).
Employee cost reduced to just 6.79% (this might happen due to economies)
Other costs fluctuating very much as well
As per quarterly trends Material Cost has dipped below 30% now and employee cost is now again rising to around 15%.
This literally means that the raw material prices have halved for Jyoti Resins which for Pidilite they are coming back to the lower end.
Doesn’t make sense to me.
Someone is manufacturing a chemical worth INR 100 where the raw material was earlier close to INR 60 and now it is at INR 30 without any change in manufacturing process or chemical properties of the chemical.
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