Pidilite Industries expects its margins to improve in the first quarter of FY24 as raw material prices have cooled off from its highs. Also, demand has also started to witness a revival in semi-urban and rural areas.
“If you look at even the fourth quarter and you look at our gross margins, you can start seeing the improvement in the gross margins,” Bharat Puri, managing director at Pidilite Industries said.
He added, “The normal EBITDA margin for us is in the range of 20 to 24 per cent. Given that (raw material) prices haven't come back, we will be back to the 20 to 24 per cent range,” Puri said.
The maker of Fevicol also has seen demand improve during the quarter due to an upward movement in the real estate and construction sector and due to the company seeing first signs of a return of rural and semi urban demand.
“In the quarter, we've seen rural and semi-urban demand actually be better than urban demand and therefore, at an overall level, we'd are cautiously optimistic as long as good monsoon conditions remain for the next six months and rising demand should continue to be good,” Puri said.
During the quarter, Pidilite’s volume growth stood at 7 per cent.
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On increasing competition, Puri said that the company has seen waves of multinational, local, and national competitors enter the market and added that it does not take any competitor for granted.
“Our job is to keep expanding the category. Our job is to increase the size of the pie rather than worry about share,” he explained and added “Via growing categories, we obviously like to protect our position and make sure we keep delighting our customers and if you look at our year’s growth, we brought volumes in the consumer businesses in double digit. Clearly the market is not growing. Despite all this competition, you can see we are gaining market share, we're not losing any market.”
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