PIDILITINDNSEQ4 FY25May 09, 2025

Pidilite Industries Limited

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75turns

9analyst exchanges

5executives

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Management on call

Sudhanshu Vats

MANAGING DIRECTOR, PIDILITE INDUSTRIES LIMITED

Kavinder Singh

JOINT MANAGING DIRECTOR, PIDILITE INDUSTRIES LIMITED

Sandeep Batra

EXECUTIVE DIRECTOR- FINANCE & CHIEF FINANCIAL OFFICER, PIDILITE INDUSTRIES LIMITED

Dharmendra Lodha

SENIOR VICE PRESIDENT FINANCE, PIDILITE INDUSTRIES LIMITED

Arun Baid

ICICI SECURITIES

Key numbers — 40 extracted

10.2%

ance and start with the standalone performance. So, the quarter's standalone revenue growth was 10.2%. We have achieved double-digit revenue growth. This 10.2% top line was underpinned by UVG of 9.8%

9.8%

0.2%. We have achieved double-digit revenue growth. This 10.2% top line was underpinned by UVG of 9.8% across categories and geographies. The Consumer and Bazaar (C&B) UVG was 8%, which improved seq

derpinned by UVG of 9.8% across categories and geographies. The Consumer and Bazaar (C&B) UVG was 8%, which improved sequentially, and the B2B segment continued to report strong UVG and in the qua

16.4%

roved sequentially, and the B2B segment continued to report strong UVG and in the quarter clocked 16.4%. Our gross margins improved both sequentially as well as YoY, primarily driven by soft input pric

5.4%

up our advertising and sales promotion spends to drive demand generation. And in Q4 they were at 5.4% of sales versus 4.7% in Q4 last year. Our EBITDA margins remained in line with the fourth quarter

4.7%

nd sales promotion spends to drive demand generation. And in Q4 they were at 5.4% of sales versus 4.7% in Q4 last year. Our EBITDA margins remained in line with the fourth quarter at Regd. Office: R

rs,

t year. Our EBITDA margins remained in line with the fourth quarter at Regd. Office: Regent Chambers, 7th Floor Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai – 400 021. Investor Relations - investor.

20.6%

i – 400 021. Investor Relations - investor.relations@pidilite.co.in CIN: L24100MH1969PLC014336 20.6%. Profit before tax and exceptional items grew by 30.8% over the same period last year. Some of th

30.8%

idilite.co.in CIN: L24100MH1969PLC014336 20.6%. Profit before tax and exceptional items grew by 30.8% over the same period last year. Some of that is also led by dividends from our subsidiaries and t

Rs. 7 crore

call, last year in the fourth quarter, in the standalone results there was an exceptional gain of Rs. 7 crores due to a share buyback of our Pidilite USA subsidiary and there was divestment of our subsidiary

Rs. 20 crore

re was divestment of our subsidiary in Brazil. This year however, there is an exceptional loss of Rs. 20 crores largely on account of impairment of loan to an associate entity. The Board also at its meeting

Rs. 20

loan to an associate entity. The Board also at its meeting yesterday recommended a dividend of Rs. 20 per share, subject to the approval by the shareholders at the forthcoming Annual General Meeting

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Guidance — 20 items

Arun Baid

opening

“On behalf of ICICI Securities, I welcome you all to the Q4 FY25 and FY25 Results Conference Call of Pidilite Industries Limited.”

Abneesh Roy

“So, in the Q4 call, almost all the FMCG companies and even Asian Paints yesterday, FY26 outlook in terms of the volume growth and overall demand side, they have said that FY26 will better than FY25.”

Abneesh Roy

“So, if I take that and given you have already done quite well in FY25, it's a reasonably high base.”

Abneesh Roy

“In your case, you think these robust numbers of high single digit kind of volume growth or say double digit kind of sales growth, is that looking possible in FY26 when I combine all this.”

Sudhanshu Vats

“In our case, we are also seeing that the thrust of the government on the government spending, will be stronger in FY26 because the elections are behind us.”

Sudhanshu Vats

“We have always said Abneesh, that we will deliver double digit profitable underlying volume growth and so therefore that is something we will continue on.”

Sudhanshu Vats

“I think we have delivered a good FY25, but that does not mean that FY26 should not be or will not be equally good.”

Sudhanshu Vats

“Now the big question for FY26 is, what the longevity of this uncertainty and unpredictability is.”

Sudhanshu Vats

“If this is extended, then the impact of this is something which we have not factored in and will be very different in our opinion.”

Sandeep Batra

“So, if you adjust that the manpower cost will be same as third quarter.”

Risks & concerns — 12 flagged

If this is extended, then the impact of this is something which we have not factored in and will be very different in our opinion.

— Sudhanshu Vats

Sure, the geopolitical risk applies to everyone.

— Abneesh Roy

Now whether it's Asian Paints or Havells who already had a lot of market share, now, is there any future risk mitigation plan that the company is working on, which sort of tells them what we should do in case a larger industrial house were to enter the adhesives.

— Nitin Shakdher

Sir, my follow-up question on that is it's extremely clear that you have already anticipated the risk and probably the management is working on a strategy or a vision that if a risk like that were to happen you will be able to counter it.

— Nitin Shakdher

So, if that risk were to happen you probably lose out a lot lesser.

— Nitin Shakdher

Is the company working to tackle concerns about cyber security, we are living in an information world and if tomorrow we think that some other risk might come in.

— Nitin Shakdher

And I think cybersecurity has been top of our agenda from a risk management point of view.

— Sudhanshu Vats

It is very difficult to hazard any guess at this stage.

— Sandeep Batra

The key risk in assuming that Q4 is a reasonable guide on what we can see panning out in FY26 which is the caution for you is the longer period of geopolitical linked uncertainty.

— Avi

The geopolitical situation and also the global economic situation is very uncertain and very unpredictable in that sense.

— Sudhanshu Vats

And in terms of the reaction if input costs do soften, it's something that we don't react on a day-to-day basis to movements in cost.

— Sandeep Batra

The question broadly and maybe at the risk of not repeating myself and I talked about it in some detail.

— Sudhanshu Vats

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Q&A — 9 exchanges

My first question is on the demand side. So, in the Q4 call, almost all the FMCG companies and even Asian Paints yesterday, FY26 outlook in terms of the volume growth and overall demand side, they have said that FY26 will better than FY25. In your case in Q3 call, you had said that in Gujarat and some pockets of Andhra Pradesh, Hyderabad, etc. real estate there was some tightness in the demand side. So, if I take that and given you have already done quite well in FY25, it's a reasonably high base. In your case, you think these robust numbers of high single digit kind of volume growth or say do

Sudhanshu Vats

Hi Abneesh, first of all good to hear from you and always consistent in keeping your record on being number one on the block. So, thank you, it's indeed our pleasure to hear from you. So, I think like the others have commented, so let me look at it like this. So, the consumer demand in a pristine sense, in a normal environment is continuing to look good. So, we completely echo what you have been hearing from others. In our case, we are also seeing that the thrust of the government on the government spending, will be stronger in FY26 because the elections are behind us. Last year, there was tha

Hi, good afternoon to the management for another steady set of good results. My question is more forward looking so please answer it in the present to the best possible that you can. Now we have seen many large industrial players entering cement, wires, cables and paints specifically. And that's hit the margins of the larger dominant companies. Now whether it's Asian Paints or Havells who already had a lot of market share, now, is there any future risk mitigation plan that the company is working on, which sort of tells them what we should do in case a larger industrial house were to enter the

Sudhanshu Vats

Yes, Nitin, thanks for raising this question and I think this question has been asked of us earlier as well, especially in some one-on-one conversations. So, the way to look at Pidilite, and I will answer it in two stages, one, explain a little bit of how we think you or others should look at Pidilite, which is a little different. And two, is to your specific question on what more we are doing to sort of strengthen our position and make this eventuality less likely, if at all it should happen. So now the question is, first of all, Pidilite, unlike many of the players sometimes you get compared

Thanks for the opportunity. Crude prices have come off quite a bit in the last one month. So how is the crude price and your raw material basket and what percentage of your raw material basket do you think will have a deflationary tailwind? Regd. Office: Regent Chambers, 7th Floor Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai – 400 021. Investor Relations - investor.relations@pidilite.co.in CIN: L24100MH1969PLC014336

Sandeep Batra

Hi, good evening, Jay. So, a large proportion of our products are indeed derivatives from crude, but all of them don't have a linear price in the short term with crude. So, I think it is something that one has to wait and watch as to how the overall demand, supply, inflation, currency, how all these variables play out. But certainly, the fact that crude prices have cooled off is a very positive sign for us. We haven't seen immediate transmission of it. VAM remains at the levels that we consumed in fourth quarter. So, it's wait and watch. But certainly, the signs are are positive. Understood. A

Sir, I just want you could share any update on the paints and lending business. You had indicated, you might kind of think about sharing that towards March end, so would love to hear any update over there, sir. Regd. Office: Regent Chambers, 7th Floor Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai – 400 021. Investor Relations - investor.relations@pidilite.co.in CIN: L24100MH1969PLC014336

Sudhanshu Vats

I would like to call them intermediate updates if I can, but I will give you a context and flavor on both. So let me first start with the lending piece. This question keeps coming up. So, 2-3 things and we have said this earlier as well, but just want to make it very clear, Avi, that the question to ask is what business are we in? So, the business we are in here, and while it is classified as lending business, that's correct, but the business we are in is to actually strengthen our applicators or our dealers with availability of finance in order to ensure that they are optimally able to grow.

My question is how much cover do we generally carry on our raw material? Just trying to see what the lag with which you start seeing benefits of crude correction. And related to that is, when RM cost does go down for you, let's say at some point can you take a gross margin expansion from here or gross margin you think is at a good level now.

Sandeep Batra

Overall, we would have about 60 to 75 days cover in terms of raw materials. That will become slightly higher when you also add the finished goods inventory that we keep. And in terms of the reaction if input costs do soften, it's something that we don't react on a day-to-day basis to movements in cost. We will look at what the longer term is or a medium-term outlook on input costs and accordingly, take a call. I mean if you would recall from October 2023, from the time where input costs actually started to go down, we would have taken price adjustments which is why you would have seen that our

I have two questions, given that the government is giving a lot of priority to electronics manufacturing in the country, so can you share the opportunity size that we can see in adhesives used in electronics assembly? And my next question is if you can elaborate more on the CollTech partnership and how Pidilite stands to benefit. Thank you.

Sudhanshu Vats

Yes, Nitin, the two are related questions and let me just tell you. In terms of market size estimation for electronic adhesives, if I was to give you a broad number of the market size for electronic adhesives moving forward because I tell you this, electronics manufacturing also needs to be contextualized. Lot of the time when we say electronics manufacturing, many times it is just assembly and if it is assembly, so there the use of adhesives is much less. As we keep getting into more and more manufacturing, including the motherboard, the other pieces and so on and so forth, electronic adhesiv

My first question was regarding some color on the borderline volume growth for some of your new forays or relatively new forays. One is tile adhesives, the other is wood finishes. And also, if you can give some flavor on how waterproofing volume trends have behaved versus 7%-8% volume growth that we have clocked for C&B for FY25. And if you could also share some color on how do you expect these growth rates to trend going forward?

Sudhanshu Vats

Yes, Latika, thanks for the question and we will give you some indication. I have not followed what the first question was, so I have understood waterproofing, which you said later. What is the other one you wanted? Tile adhesives Roff, basically. So Latika, as you very well know, the way we define our growth categories and there's a broad distinct, we say 2X to 4X of the real GDP now and I am happy to share with you that tile adhesives a little bit more than Dr Fixit construction chemical, but both of these growth brands and categories are delivering to that range. So therefore, we are happy

Hi Sir, thanks for the opportunity. Two questions pertaining to Haisha. So just wanted to understand our go-to-market strategy, especially when the incumbents are complaining that the cost of shelf has actually gone up too because of the competitive intensity. So how are we going about it? Second, at what scale or repeat purchase trigger or channel readiness, would you be confident to take Haisha pan India? What is the key trigger that we are monitoring for that rollout?

Sudhanshu Vats

It's a very good question, Tejas but I must also tell you if I disclose all of this, in the current environment we are not going to be able to talk about any of this. The question broadly and maybe at the risk of not repeating myself and I talked about it in some detail. We are looking at how to progress this in a different way. First of all, when you Regd. Office: Regent Chambers, 7th Floor Jamnalal Bajaj Marg, 208, Nariman Point, Mumbai – 400 021. Investor Relations - investor.relations@pidilite.co.in CIN: L24100MH1969PLC014336 come at it from the competitive intensity in urban India, we do

Thank you very much. I would like to thank each of them who joined the call for their continued interest in Pidilite. Thank you very much. Have a good evening.

Management

Speaking time

Sudhanshu Vats

Moderator

Sandeep Batra

Abneesh Roy

Jaykumar Doshi

Latika Chopra

Nitin Shakdher

Avi

Nitin Jain

Saurabh Kundan

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Opening remarks

Arun Baid

Good afternoon, ladies and gentlemen. On behalf of ICICI Securities, I welcome you all to the Q4 FY25 and FY25 Results Conference Call of Pidilite Industries Limited. From the Management side we have Mr. Sudhanshu Vats – Managing Director, Mr. Kavinder Singh – Joint Managing Director, Mr. Sandeep Batra – Executive Director-Finance and Chief Financial Officer and Mr. Dharmendra Lodha – Senior Vice President - Finance. Now I handover the call to Mr. Batra for his opening remarks. Then we will have the forum open for questions and answers. Over to you, Mr. Batra.

Sandeep Batra

Thank you and good evening and welcome everybody to our fourth quarter and full year earnings call. I will quickly give you the highlights of the performance and the financial results which were approved by our Board of Directors (Board) yesterday. I will quickly cover the fourth quarter performance and start with the standalone performance. So, the quarter's standalone revenue growth was 10.2%. We have achieved double-digit revenue growth. This 10.2% top line was underpinned by UVG of 9.8% across categories and geographies. The Consumer and Bazaar (C&B) UVG was 8%, which improved sequentially, and the B2B segment continued to report strong UVG and in the quarter clocked 16.4%. Our gross margins improved both sequentially as well as YoY, primarily driven by soft input prices. VAM consumption in the quarter was at around $880 a ton vis-à-vis $925 a ton in Q4 last year and just for reference, in Q3 it was $884 a ton. As we had mentioned earlier, we stepped up our advertising and sales pr

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