Updated January 28th, 2024 at 11:35 IST
Pidilite MD Bharat Puri expresses optimism about overall growth
Puri highlighted the company's commitment to brand investment, having almost doubled advertising spending compared to the previous year.
Increasing demand for Pidilite: Rural and semi-urban markets are experiencing a 1.5 times faster growth than urban markets for Pidilite Industries, leading to double-digit volume growth in the first three-quarters of FY24, according to Managing Director Bharat Puri.
Puri expressed optimism about the demand environment, citing increased government spending on infrastructure and a surge in the housing sector. Despite the geopolitical crisis in the Middle East, Pidilite does not foresee disruptions in the supply chain, as most raw materials come from the East.
Prices of the principal raw material, Vinyl acetate monomer (VAM), have stabilised at around $900 to $1,000 per tonne, compared to $2,000 per tonne in the past. Puri anticipates stability in input prices for the next three to four months.
Puri highlighted the company's commitment to brand investment, having almost doubled advertising spending compared to the previous year. Despite increased profitability, Pidilite remains open to inorganic growth opportunities, backed by a healthy cash reserve.
The company reported a 66 per cent increase in consolidated net profit at Rs 510.92 crore for the December quarter, with revenue from operations growing by 4.41 per cent to Rs 3,130 crore.
Rural and semi-urban markets continue to be growth drivers for Pidilite, outpacing urban growth by 1.5 times. Puri sees substantial penetration opportunities in these markets for the next three to five years, fueled by investments and expanded sales networks reaching small retail stores in villages.
Pidilite added 30,000 distribution points in the latest quarter, with a plan to add close to 100,000 distribution points throughout the year. Puri emphasised the importance of these points in driving growth, citing products like Araldite as key contributors.
Regarding the new paints business, Puri mentioned it is being piloted in some southern states, underlining that it's not a pivotal part of their growth plans but rather a range completion exercise. The company continues to focus on a broad-based growth strategy across categories.
Pidilite, known for brands like Fevicol, M-Seal, Fevikwik, and Dr Fixit, remains a prominent manufacturer of adhesives, sealants, and construction chemicals in the industry.
(With PTI inputs)
Published January 28th, 2024 at 11:35 IST