Pidilite Industries eyes better margins from Q1FY24 amid revival in demand

Pidilite Industries is looking at better margins from the first quarter of FY24 amid cooling off of raw material prices and a revival in demand in semi-urban and rural areas.

“Even if you look at our gross margins in the fourth quarter, you can start seeing the improvement,” Bharat Puri, managing director at Pidilite Industries, said.

“The normal Ebitda margin for us is in the 20-24 per cent range. Given (raw material) prices haven’t gone back up, we will be back to that range,” Puri said.

The maker of Fevicol has also seen demand improving during the quarter due to increase in activities in real estate and the construction sectors.

“During the quarter, we have seen more rural and semi-urban demand than in urban areas, and therefore, overall, we are cautiously optimistic... as long as good monsoon conditions remain, demand should continue to be good,” Puri said.

Pidilite’s volume growth stood at 7 per cent during the quarter.

On increasing competition, Puri said the company had seen waves of multinational, local, and national competitors entering the market, and added that it does not take any competitor for granted. “Our job is to keep expanding the category... it is to increase the size of the pie rather than worry about share,” he said.

“We would obviously like to protect our position and make sure we keep delighting our customers. If you look at our growth during the year, consumer business volumes were back in double-digits. Clearly, the market is not growing as much. Despite all this, as well as the competition, you can see we are gaining market share,” he added.