Pidilite's adex to return to normal rate in remaining quarters of FY24

Pidilite has increased its ad spends by 70-75% in Q1 of FY24.

Pidilite Industries MD Bharat Puri said that the company would also be returning to its normal adex in Q3 and Q4.

Puri said, "Known for our advertising and marketing, we have substantially stepped up advertising in the first quarter. In fact, our advertising is up 70-75%.”

"In the second, third and fourth quarters, you will see us come back to our normal rates of advertising and investing behind our brands," he added.

Pidilite with a host of brands including Fevicol, M-Seal, Fevikwik, Fevistik, Roff, Dr Fixit, and Araldite - is a leading manufacturer of adhesives and sealants, construction chemicals, craftsmen products.

Pidilite reported a 32.5% increase in consolidated net profit at Rs 473.69 crore for the June quarter, driven by strong volume growth. Its revenue from operations was up 5.61% at Rs 3,275.11 crore.

During a roundtable, Puri said that rural growth, which was lagging after the pandemic, has outpaced urban demand and this trend is likely to continue over the next six months led by a good monsoon.

Moreover, as the inflationary pressure cools down after two years of volatility, Puri said now he sees 'stability' in input prices, which is providing him with a lot more elbow room to invest back into the marketplace.

Puri says he is "increasingly optimistic" as he looks forward as there is clearly increased construction activity, leading to good demand.

The company, which recently entered into the Paints market and has a presence in 2-3 states, would expand further to other markets based on consumer responses. It is an organic business for Pidilite, which will grow steadily, he added.

When asked about the current quarter (July-September), Puri said there has been disruption at some places due to rains.

"Q2 up to now has been a very unnatural quarter simply because of these massive rain incidences ... So, we have disruptions in the North," said Puri in a virtual media roundtable.

However, he also added: "But overall, I would say that once all of this stabilises, we do not see a great difference between conditions in Quarter 1 and Quarter 2 actually, but this question will probably be best answered four weeks later, once we get a lot more stability in the natural circumstances."

On outlook on volume growth, Puri said "We divide our business into three categories core, growth and pioneer. Given the first quarter, we expect the same trends to continue for the rest of the year," he added.

Consumers are reappraising their relationship with the home, both in terms of investing in the house, new homes or upgrading of homes, Puri added.

Over the rural market, Puri said: "We have also seen now actually for six months continuously, rural growth’s return and rural growth actually outpacing urban growth, which is a really welcome sign for us," said Puri.

He further said, "Overall, what we are seeing is clearly increased construction activity, leading to good demand. We are also seeing stable input prices, which is enabling us to be able to get a lot more elbow room to invest back into the marketplace."

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