Pidilite wants to be emerging markets Indian multinational: Bharat Puri, Managing Director

Bharat Puri, Managing Director, Pidilite Industries Limited, talks about September quarter numbers, DIY segment, trends in industrial segments and B2B segment, acquisition of Huntsman Group's Indian subsidiary and CapEx among others, during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: You have positively surprised the street by your numbers of September quarter. Tell us the specifics that led to such growth and also the segment that performed the most?

A: This quarter was a different type of quarter in which every month was better than the previous month. Steadily demand has been improving and is increasing. As far as consumer and market are concerned, the demand has come back first in small cities and rural India, where it is little ahead of the pre-COVID levels. However, demand is gradually coming back to the big cities and has reached around 90% in the metros. Overall, we are pleasantly surprised because we have seen steadily improving demand conditions and when you have a strong brand and good set of passionate people who are making sure that the brand reaches every nook and corner of the country. In these times I think that this is a recipe for success.  

Q: What was the volume growth in the Consumer and Bazaar segment and has the price changed in the quarter?

A: Overall, value and volume are almost similar. The volume growth of our domestic consumer & bazaar is almost 8% as compared to the same quarter of last year. As far as growth is concerned then there is good growth in the waterproofing and construction chemical segment, the ‘Do for Yourself’ segment and our core segment of Fevicol. So, we are seeing that demand is increasing in consumer and bazaar, therefore, there was good growth in the quarter. 

Q: The DIY has shown major improvement in this Quarter. Was it the lockdown effect?

A: In the case when you are sitting at the home, then the family members say that something has broken then connect it. Similarly, if the children are sitting then you engage them in the craft and arts projects, several people have started painting to get rid of the stress. So, there are certain things that impact the demand, so this is a was positive demand of the lockdown. 

Q: Give us some insights on trends on the industrial segment mainly the B2B demand? Do you think that the situation is challenging on the front?

A: As far as B2B is concerned, there are certain segments that have come back more strongly, like the segment that deals with hygiene, toiletry, FMCG, home textile and home furnishing. When it comes to leather and footwear then those industries are still to come back. So, B2B is improving but at a much slower pace than consumer and bazaar. Overall, in the quarter, we are still about 90% of the last year. In many segments, it has returned and many segments are still challenged. I think, if the pandemic doesn’t deteriorate or if the second wave doesn’t come, then I think that the B2B segment will also come back in the second half. 

Q: You have completed the acquisition of Huntsman Group's Indian subsidiary for Rs 2,100 crore. Please tell us its prospects and what kind of effect it will have on your books and by when it will be seen? Also, tell us the revenue that you are expecting from there?

A: Pidilite is a well-known and trusted brand and this was the only segment, Epoxy Chemistry, where Pidilite was not a leader. It is used in heavy objects like marble, granite, stone and kitchen countertops. With this acquisition, now, our portfolio in the entire adhesive sealant space has been completed. When we buy a brand then we buy it for the brand’s strength or for its root to the market. In this case, the brand is strong and our root to the market is strong so I feel that when two will be added with two then it will result in five.

Q: Tell us the kind of strategy and growth plans that you have lined up? Because you are seeing a promising demand in your business and good growth, so what kind of CapEx have you lined up for the next few years?

A: As far as our CapEx is concerned then we have a regular CapEx programme and every year, we invest around 4-5% our entire sales on the CapEx. We are coming up with 9 new factories in India. So, we are continuously investing for the future and if we find good inorganic opportunities, we will obviously look at those. So as far as Pidilite is concerned, we are clear that going forward we want to be an emerging markets Indian multinational and we are moving ahead with the same motto. 

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