Pidilite sticks to growth with digital and rural diversification

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Reporting consolidated net sales increase of 9% year-on-year to ₹3,357 crore for Q3FY25, the adhesive giant continues to leverage its dual focus on consumer and B2B markets.
Pidilite sticks to growth with digital and rural diversification
Pidilite has expanded its flagship retail initiative, ‘Pidilite Ki Duniya’ stores, to over 16,000 outlets Credits: Getty Images

Despite a soft demand environment across India’s consumption sectors, Pidilite Industries has maintained robust growth, driven by its diversified portfolio and strategic investments. Reporting consolidated net sales increase of 9% year-on-year to ₹3,357 crore for Q3FY25, the adhesive giant continues to leverage its dual focus on the consumer and the B2B markets.

Sudhanshu Vats, Pidilite’s managing director-designate, attributed this resilience to the company’s “philosophy of identifying sweet spots in underserved and premium segments” where they are accelerating demand. He emphasised the strength of Pidilite’s portfolio, which has evolved over the past decade to cater to diverse market needs. “We’ve built a portfolio that plays across segments—from premium products to mass-market solutions—and that balance is our competitive edge,” Vats said during a press briefing.

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The company’s approach hinges on four key pillars: brand investment, digital transformation, supply chain agility, and innovation. These factors not only contributed to a 9.7% underlying volume growth for the quarter but also strengthened Pidilite’s ability to navigate challenges in India’s economic landscape.

In the consumer segment, Pidilite has expanded its flagship retail initiative, ‘Pidilite Ki Duniya’ stores, to over 16,000 outlets, enhancing its rural reach. Concurrently, its digital platform, Pidilite Genie, now drives over 35% of its consumer and bazaar sales. This integration of digital and physical channels asserts the company’s long-term vision for an evolving Indian market.

“We’re continuously investing in building both the depth and width of our distribution network,” Vats said, highlighting the milestone of surpassing 600,000 outlets nationwide. Additionally, Pidilite inaugurated a 500,000 sq. ft warehouse in Ambala, North India’s largest, further enhancing its supply chain capabilities.

Navigating demand challenges

While rural consumption shows signs of recovery, urban demand remains sluggish, influenced by inflationary pressures on household budgets. Rising costs in food, education, and telecom services have constrained discretionary spending, particularly in urban markets. “Inflation has varied impacts, but it undeniably puts pressure on disposable incomes,” Vats said.

However, he remains optimistic about India’s medium- to long-term growth trajectory. “The next couple of decades belong to our country. While there are bumps in the road, we are confident in navigating them and driving double-digit profitable growth,” he said.

Pidilite’s performance stands out in a sector where many consumer goods companies have reported muted growth. Analysts credit this to the company’s strategic segmentation and ability to tap into premiumsation—a trend Vats described as secular. “India is an ‘and’ country. Success here depends on understanding diverse consumer tiers and creating offerings that cater to both premium and mass-market segments,” he elaborated.

Looking ahead

For the nine months ended December 2024, Pidilite reported net sales of ₹9,964 crore, a 7% growth year-on-year. Its EBITDA rose by 12% to ₹2,380 crore, and profit after tax surged 16% to ₹1,669 crore in the period. While raw material prices have eased, Vats confirmed that the company has reinvested the gains into brand building and innovation.

Pidilite is also experimenting with new avenues such as financing and localised paint solutions, positioning itself for future growth. Vats emphasised that these pilots align with the company’s goal of converting emerging categories into growth categories and converging them into core business segments eventually.

Looking ahead, the company remains hopeful about demand stimuli from the upcoming Union Budget, particularly measures to boost disposable incomes and infrastructure investments. “Fiscal steps that spur consumption and accelerate infrastructure projects could have a ripple effect across industries,” Vats said.

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