Rural and semi-urban markets are witnessing faster growth than their urban counterparts, leading to a double-digit volume growth for Pidilite Industries, according to the company’s Managing Director Bharat Puri. Pidilite Industries, a leading manufacturer of adhesives, sealants, and construction chemicals, remains optimistic about the overall growth prospects of its sector and expects to continue its momentum in the last quarter.
Puri expressed confidence in the demand environment, citing increased government spending on infrastructure, as well as a surge in the housing and real estate sectors. Pidilite Industries does not anticipate any disruption in its supply chain due to the geopolitical crisis in the Middle East, as most of its raw materials come from the East rather than through the Red Sea. Puri also highlighted the stability in raw material prices, with the cost of vinyl acetate monomer (VAM) decreasing from USD 2,000 per tonne to USD 900-1,000 per tonne.
The company has passed on the benefits of lower-cost prices to consumers and has increased its advertising expenditure. Puri emphasized that Pidilite Industries has almost doubled its advertising spend compared to the previous year while maintaining profitability. Additionally, Pidilite Industries remains open to potential acquisitions, leveraging its strong cash reserves.
Driven by rural and semi-urban markets, Pidilite Industries sees substantial penetration opportunities. The company is expanding its sales network, reaching small retail stores in villages with populations ranging from 5,000 to 10,000. Pidilite Industries has also added 30,000 new distribution points in the last quarter, with a plan to reach 100,000 distribution points within the year.
Regarding the company’s new paints business, Puri mentioned that Pidilite Industries is piloting this venture in certain southern states. The introduction of paints is part of the company’s range completion exercise and not a central aspect of its growth plans.
In the December quarter, Pidilite Industries reported a 66% increase in its consolidated net profit, reaching INR 510.92 crore, and a 4.41% growth in revenue from operations at INR 3,130 crore. Puri attributed these positive results to the continuous growth in rural markets throughout the fiscal year.
With its strong performance and ongoing expansion efforts, Pidilite Industries is poised for sustained growth in the adhesives, sealants, and construction chemicals sector. The company’s focus on rural and semi-urban markets, coupled with its commitment to quality products and customer satisfaction, positions it favorably for the future.
