Pidilite Industries, best known for its Fevicol and Fevikwik brand of adhesives, expects its sales growth in the second half of the current financial year to be led by double-digit volume growth, managing director Bharat Puri said on Friday.
Price hikes, he said, would depend on geopolitical events and the overall impact on commodity prices.
In Q1, Pidilite had taken price cuts (of around 5-6%) to pass on commodity gains to consumers.
“The current monsoon season looks good. This will likely aid a consumption uptick during the upcoming festive season, provided there are no geopolitical events. We remain optimistic about the second half of the year,” Puri said during a media interaction.
Pidilite saw its June quarter underlying volume growth come in at 9.6%, lower than the 15.2% volume growth seen in the March quarter, but higher than the 8% volume growth reported a year ago. Its core consumer and bazaar segment, which includes Fevicol and Fevikwik, reported a volume growth of 8% versus 12.7% seen in the March quarter. In the year-ago period, underlying volume growth in the consumer business stood at 12%.
Puri blamed disruptions in Q1 related to the long election period and a prolonged heatwave, which hurt demand, for the underwhelming volume numbers in the consumer and bazaar segment, which saw its topline touch Rs 2,740 crore, a 3% growth over last year. The business-to-business (B2B) segment, which touched Rs 726 crore in topline, a year-on-year increase of 7%, saw volume growth at 18% during the quarter, he said.
“We have indicated that we want to move up the value chain in B2B. That is happening. The pigments business within B2B has come back strongly this quarter. This has helped the (B2B) segment clock double-digit volume growth,” Puri said.
At an overall level, the company reported a 21% y-o-y growth in its consolidated net profit to Rs 571 crore in the June quarter. Net sales were up by 3.7% to Rs 3,395 crore. Earnings before interest, tax, depreciation and amortisation (Ebitda) were up nearly 15% y-o-y to Rs 813 crore, while Ebitda margins were up 230 basis points to 23.9% from 21.9% last year.
Puri said the capital expenditure (capex) for FY25 would be in the region of Rs 400-800 crore, which will be utilised to set up around 3-5 new factories. A new plant, for instance, has been set up in Rajasthan for exterior renders, which is a new category in India, he added.
Overall, the company has over 70 plants across India and some eight manufacturing units overseas.