PIDILITINDNSEQ2 FY24November 09, 2023

Pidilite Industries Limited

9,674words
4turns
1analyst exchanges
5executives
Management on call
Bharat Puri
MANAGING DIRECTOR
Sudhanshu Vats
DEPUTY MANAGING DIRECTOR
Sandeep Batra
EXECUTIVE DIRECTOR
Sunil Burde
SENIOR VICE PRESIDENT
Amnish Aggarwal
PRABHUDAS LILLADHER PRIVATE LIMITED
Key numbers — 32 extracted
8.2%
y. Our standalone revenue growth for the quarter was driven by robust underlying volume growth of 8.2%. This growth was broad-based with the domestic consumer and bazaar segment delivering underlyin
8%
broad-based with the domestic consumer and bazaar segment delivering underlying volume growth of 8% and a four-year CAGR of 14% and the domestic B2B business growing by UVG of 20%, which translates
14%
tic consumer and bazaar segment delivering underlying volume growth of 8% and a four-year CAGR of 14% and the domestic B2B business growing by UVG of 20%, which translates into a four-year CAGR of
20%
g volume growth of 8% and a four-year CAGR of 14% and the domestic B2B business growing by UVG of 20%, which translates into a four-year CAGR of 11%. The growth in rural markets continue to be higher
11%
and the domestic B2B business growing by UVG of 20%, which translates into a four-year CAGR of 11%. The growth in rural markets continue to be higher than urban markets. Input prices continue to m
230 basis point
e in this quarter expanded both sequentially as well as year- on-year. For the quarter, it grew by 230 basis points over the first quarter of this year and by 1,095 basis points over same period last year. VAM co
1,095 basis point
on-year. For the quarter, it grew by 230 basis points over the first quarter of this year and by 1,095 basis points over same period last year. VAM consumption in the quarter was around $1,000 a ton as compared t
2X
pansion. We continue to remain aggressive in investing behind our brands with spend on A&SP being 2X of the same period last year. Despite passing on some of the benefit of these lower input costs
600 basis point
t costs to customers as well as increased A&SP spends, standalone EBITDA margins have improved by 600 basis points over same period last year and by 50 basis points over the first quarter and stands at 23.2%. Ou
50 basis point
ds, standalone EBITDA margins have improved by 600 basis points over same period last year and by 50 basis points over the first quarter and stands at 23.2%. Our domestic subsidiaries continue to deliver robust
23.2%
s points over same period last year and by 50 basis points over the first quarter and stands at 23.2%. Our domestic subsidiaries continue to deliver robust sales growth, driven by the C&B businesses
rs,
nd EBITDA margins improved sequentially as well as year-on-year. 2 Regd. Office: Regent Chambers, 7th Floor Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai – 400021. Investor Relations - investor.r
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Guidance — 9 items
Bharat Puri
qa
“Automatically, they find their own level and they will reach a certain rotation and remember these guys again stock a vast variety of products.”
Bharat Puri
qa
“You did indicate around 12% volume CAGR since acquisition.”
Bharat Puri
qa
“Sir, I just had two follow-ups, would it be possible for you to qualify PVA as a segment, so what percentage of its that is in retail versus joinery and how the trends have been recently and how do you see this going forward?”
Bharat Puri
qa
“If you look at our four-year CAGR, you would see on a revenue basis it is double digit and on a volume basis it is close to double digit.”
Bharat Puri
qa
“So, really, but if I equalize over a four-year period, we clearly believe that again both from a revenue and volume perspective, our objective is to grow volumes double digits, hopefully premiumize, improve mix a little bit, and therefore also grow value at a little above the volume - that would be our steady state if life was a lot more even that's what we would be aiming for.”
Bharat Puri
qa
“We believe in the next three to six months the value will start coming back and we will be well positioned because again we would have added another few hundred thousand tons to our volume.”
Bharat Puri
qa
“But you mentioned on the call that your target segment is lower middle class and above.”
Bharat Puri
qa
“What is your reading, what is the benefit that you are seeing in the business, does it come with a lag, do you expect more traction in some of your businesses that are linked to new construction going forward or right now the numbers that you are reporting already captures that and finally as per my understanding there are three legs, one is the urban real estate residential, one is commercial, and the third is independent housing units in small towns.”
Bharat Puri
qa
“It is residential real estate in the 10 lakh plus town, especially the organized real estate, we tend to see an impact which happens between I would say two to four years depending on the project completion is when, because a large part of our products with the exception of new construction, waterproofing, all come into substantial play when the flats are at a finishing level.”
Risks & concerns — 6 flagged
So, I just wanted to understand from you as an industry leader how are you seeing competitive landscape shaping up and is there any pressure point building in terms of pricing or shelf space war?
— Bharat Puri
Ritesh Shah: It is very difficult because we did not know the size of the rural markets as we have gone in.
— Bharat Puri
Bharat Puri: See, it is very difficult to put markets sizing because every paint company keeps adding all exterior paints to waterproofing and adding a lot of paint to waterproofing coatings.
— Bharat Puri
So, it is very difficult to estimate the size of the waterproofing market.
— Bharat Puri
It is therefore difficult to ascertain across, I would say that over a three to four-year period, the market has 17 Regd.
— Bharat Puri
Bharat Puri: See, I think your guess is as good as mine, but this famous rural slowdown, I mean post COVID, there has been a bit of a K-shaped recovery and I suspect for both, for life to be good for all of us, from K it has to become a hockey stick.
— Bharat Puri
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Q&A — 1 exchanges
Q
See, in India, all the entrepreneurs are smart and making the ROI. We do not give individual incentives so on. We may spend more in terms of training, so on so, but we do not give extra margins and so on. Automatically, they find their own level and they will reach a certain rotation and remember these guys again stock a vast variety of products. So, therefore it depends on what is the variety of products the person has. Percy Panthaki: Right. And last question on this Pidilite Ki Duniya is that on an average what would be the pop strata of these towns or villages in which these 10,000-12,000
Bharat Puri
See, one is remember as I told you, to separate the two businesses. The lending business is going to be a standalone business not drawing upon any Pidilite resources in a substantial fashion in any way of Pidilite peoples etc. So, therefore based on its requirement we will look at it, study from the pilot, come back and tell you fellows in six to nine months in the pilot how it has worked and therefore whether the business model needs tweaking and how it is going to go forward. As far as paint is concerned, remember we are already in the channel as I told you, one of the reasons why we got int
Speaking time
Bharat Puri
3
Moderator
1
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