Pidilite Industries Ltd Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Abneesh Roy - Nuvama Asset Management Ltd - Analyst : Congrats on a good set of numbers. My first question is on the Kerala market. One of the paint companies said that they and all the paint players saw very muted demand, in fact, dip in volume in Kerala, a significant slow demand. Would you have also seen a slow demand in Kerala or any of the states in Q1 because your overall volume growth is quite healthy. I wanted to check, if there is any issue in Kerala or any of the markets?

Question: Abneesh Roy - Nuvama Asset Management Ltd - Analyst : And any logic you are able to put there because the paint company you're saying they don't have any specific reason for this because why I'm asking this, this could go to other markets also. Because generally, in India, we don't see a slowdown being there for a long time in any of the markets. So any reasons you are able to pick up?

Question: Abneesh Roy - Nuvama Asset Management Ltd - Analyst : Sir, my second question is on your CNBC interview. So you mentioned that your Experior, a new product, is being launched, which is somewhere in the bridge between pain and cement. Could you talk more about it because this clearly is a very differentiated product with very long shelf life or durability for the customer. Also, it does the pricing, et cetera. What is the addressable market you can have from this over a longer timeframe. Of course, this will take time. I understand that. But a longer timeframe, how big can this market be at taking cue from developed markets?

Question: Abneesh Roy - Nuvama Asset Management Ltd - Analyst : Sure. My second question is on your CNBC interview. So you mentioned that your exterior new product is being launched, which is somewhere in the bridge between paints and cement. Could you talk more about it because this clearly is a very differentiated product with very long shelf-life durability for the customer also. So in terms of pricing, et cetera, what is the addressable market you can have from this over a longer time frame. Of course, this will take time. I understand that. But longer time frame, how big can this market be taking cue from developed markets?

Question: Sonali Salgaonkar - Jefferies LLC - Analyst : Thank you for the opportunity and congratulations on double-digit UVG yet again, third consecutive quarter, I guess. So my first question is regarding the price rollbacks. We saw around mid-single-digit price rollbacks in FY24. Have we taken any pricing action in Q1? Or are we -- do we anticipate it to take any further? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 10:30AM, PIDI.NS - Q1 2025 Pidilite Industries Ltd Earnings Call

Question: Sonali Salgaonkar - Jefferies LLC - Analyst : Understood. Very clear. Sir, if I may just ask what is the VAM price currently? Sandeep sir did talk about the average of the quarter, but currently, what is the VAM price?

Question: Sonali Salgaonkar - Jefferies LLC - Analyst : Understood. Sir, and my second question will be any update on our NBFC business?

Question: Sonali Salgaonkar - Jefferies LLC - Analyst : And my last question will be rural versus urban. Now yes, we have termed rural as Emerging India, and the growth in Emerging India has outpaced urban yet again. So could we understand exactly which of the spots in rural or probably, whether it is Consumer and Bazaar or B2B that are growing well? Any color on rural growth would be really helpful.

Question: Latika Chopra - JPMorgan - Analyst : My first question was, if you keep the pricing where it is right now, how soon we expect overall pricing growth to become sluggish or should it impact (inaudible)?

Question: Latika Chopra - JPMorgan - Analyst : All right. The second one was any color that you can share with us on your paints foray. Anything more that you can talk about on many more months [of television] launch?

Question: Latika Chopra - JPMorgan - Analyst : Saw a flattish revenue growth. If you talk about some of the we think about what's happened in Q1? And what do you anticipate in coming quarters?

Question: Latika Chopra - JPMorgan - Analyst : The domestic industry -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 10:30AM, PIDI.NS - Q1 2025 Pidilite Industries Ltd Earnings Call

Question: Percy Panthaki - IIFL - Analyst : Sir, so we have always held that we will keep a margin band of about 20% to 24%. Now this quarter, we are at the top end of that band almost. How do you see it for the rest of the year? If basically, you're saying the input costs are quite stable. And in that case, your pricing will also remain stable. Should we interpret that the Q1 margin will more or less continue for the remainder of the year?

Question: Percy Panthaki - IIFL - Analyst : Okay. But is there is there any particular seasonality this quarter which causes the margin to sort of be on the higher side. The reason why I ask is that sequentially that is versus March quarter, your EBITDA margin has shot up quite a lot.

Question: Percy Panthaki - IIFL - Analyst : Got it. Got it. My second question is on the core pioneer and growth categories. So could you give me a rough sense of what the percentage contribution to the overall revenue, each of these three categories has today? And how it has changed versus, let's say, five years ago? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 10:30AM, PIDI.NS - Q1 2025 Pidilite Industries Ltd Earnings Call

Question: Percy Panthaki - IIFL - Analyst : Okay. Okay. And this is over how many years?

Question: Percy Panthaki - IIFL - Analyst : Okay. And again, within the core and pioneer, would I be right in assuming that pioneer would be -- I mean, growth in pioneer, the pioneer would be significantly smaller than the growth categories?

Question: Jaykumar Doshi - Kotak Securities - Analyst : Could you explain us a little bit about your B2B portfolio, and typically, what is the visibility you have in this business? For us, a lot of that is kind of black box, our ability to predict forecast is limited. And how should we think from a two- to three-year perspective, will the growth rate be broadly similar to see Consumer and Bazaar, or do you expect it to grow faster? Or you think overall medium term, the growth rates can be probably lower than Consumer and Bazaar?

Question: Jaykumar Doshi - Kotak Securities - Analyst : Understood. That's helpful. Could you also give some color on your international exports. What are the opportunities? How do you think from the medium-term perspective, especially Africa as the market?

Question: Jaykumar Doshi - Kotak Securities - Analyst : Understood. Lastly, on the core demand environment in India, you remain as confident as you were maybe six months or a year ago? Has anything changed in terms of the way it used to change things in the market?

Question: Keyur Pandya - ICICI Prudential Life Insurance Company Ltd - Analyst : Congratulations to the team for good results. two questions. First, on the core category. So of course, we have maintained growth in the range of 1x to 2x GDP growth. But just as a proxy to say, real estate-linked demand, have you seen any acceleration in the growth of core category, even within this range? Or I mean, any color on whether we are seeing this real estate-led demand in core category or even in the growth category per se? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 10:30AM, PIDI.NS - Q1 2025 Pidilite Industries Ltd Earnings Call

Question: Keyur Pandya - ICICI Prudential Life Insurance Company Ltd - Analyst : Understood. So basically, the current growth rate is without those benefits and probably it would accelerate from here?

Question: Keyur Pandya - ICICI Prudential Life Insurance Company Ltd - Analyst : Yes, yes, yes. Okay. Second, on this B2B side, so I heard -- I mean, we are doing some, say, category of products addition to cater to, say, electronic or electronic vehicle-related demand. If you can just throw some more light, this or anything other than that, are we adding to our portfolio in this B2B category?

Question: Keyur Pandya - ICICI Prudential Life Insurance Company Ltd - Analyst : Okay. Okay. And just last question. I probably may look repetitive, but I think before -- at the end of the Q4, in the con call, you mentioned about double-digit volume growth for the full year with some deceleration in Q1. Now with Q1 having some challenges like heatwaves and election, if the volume growth is 8%, are we confident of the overall double-digit volume growth for the full year?

Question: Bharat Sheth - Quest Investments Ltd - Analyst : Congratulate on good set of number. Sir, second for our previous participant question, as you say that core category real growth will start from real estate boom end of, say, end of third year end of second year. So does that mean that what we are talking of core category growth double of GDP, that will start reflecting from next year onwards? Is that understanding correct?