Pidilite Industries targets double-digit volume growth in consumer and B2B segments
"We've got a whole range of innovations. We've got the supply chain in place, and therefore the Fevicol elephant has kept marching on with hope," said Bharat Puri, MD of Pidilite Industries.
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By Mangalam Maloo
Bharat Puri, MD of Pidilite Industries, said that the company is aiming for double-digit volume growth across its consumer and B2B segments.
The company reported an underlying volume growth of 8% for its consumer and bazaar business for the April-June period. A CNBC-TV18 poll had projected the volume growth to range between 7% and 8%.
Verbatim transcript:
Q: How did you manage to grow volumes in double digit despite the disruptions in the quarter and more importantly, tell us about what the outlook is?
A: At Pidilite, we have been on a journey - each quarter is continuing journey. We have a very clear strategy in place, core categories to grow at 1-2 times gross domestic product (GDP), growth categories at 2-4 times GDP, enter new pioneer categories, which become growth categories. We've continued on the journey.
We've also seen disruptions in the first quarter, for example, the long election and its related impact on whether it was wholesale, whether it was on availability of labour, this, along with the severe heat wave in large parts of India, didn't impact us. But we have obviously continued on the journey we've been on.
One of the things that has worked for us, and continues to work for us, is rural growths are still 1.5 times urban growth. This is something that we have now been seeing for the last eight quarters.
Our investments in emerging India, as we call it, whether it is rural or small town India – our Pidilite ki duniya initiative, we now have 14,000 Pidilite ki duniya in villages below 15,000. We've now got 28,000 villages under direct coverage, with the population below 10,000. So whether it is sales and distribution, whether it is innovation, each of our divisions has launched a range of products.
At Fevicol, we've launched Nail Free Ultra, which is a substitute for nails in your home if you want to put up towel racks or mirrors. At Dr Fixit, we've launched a product called All Seal, which helps your home seal against waterproofing under construction. Fevikwik has a new range. So we've got a whole range of innovations. We've got the supply chain in place, and therefore, the Fevicol elephant has kept marching on with hope.
Now the current good monsoon also improves in distribution, and the festive season is great. If we don't have any new geopolitical events, then we are optimistic about the second quarter and, more importantly, the second half.
Q: You preempted my next question, because while you aspire to grow at double digits in your consumer business, this time around, was just about there - close around 8%. So with the disruptions out of the way, I believe that would be on the cards. What about the B2B business? That grew 18% that's a pace that we haven't seen earlier. Was there something different this time around, and is that sustainable?
A: We've been calling out for some period of time that we are recasting our B2B business. We are clear that we want to move up the value chain, go into newer value added businesses. So one, obviously that has happened. The second is the international environment especially for our Pigments division, which suffered last year, this year has come back very strongly. So overall, again, we will look at double digit volume growth, not just for consumer and bazaar, but also B2B going forward.
