Pidilite Industries Ltd., India's largest manufacturer of adhesives is betting on its domestic markets to aid the company's growth going forward.
In an interaction with CNBC-TV18, the company's Managing Director Bharat Puri said that he is expecting domestic markets to drive growth going forward.
"The trend really is domestic markets demand remains quite good, internationally businesses that are focused on the US and Europe and actually also our neighbouring countries be it Nepal, be it Bangladesh, be it Sri Lanka are seeing some challenges from a demand perspective. But it is really in the domestic business motoring along well, some challenges on the international front," Puri said.
Pidilite reported an operationally strong performance for the June quarter where revenue for the quarter grew by nearly 6 percent, while net profit grew by 32.5 percent. Operating profit or EBITDA was up by 33.5 percent, while margin expanded by over 400 basis points.
Pidilite's international subsidiaries, excluding Pidilite USA Inc. sales were flat compared to last year, largely due to uncertain economic conditions, currency devaluation challenges in some countries and local inflation pressures with a flat operating performance.
Puri also attributed the subdued international performance due to some weakness in demand. On the other hand, domestic subsidiaries continued to deliver robust sales growth driven by the Consumer & Bazaar business with improved margins.
Pidilite's EBITDA margin was back above the 20 percent mark with expansion seen in both consumer and industrial businesses. The company's gross margin also expanded to 49 percent in the June quarter, compared to 41.7 percent last year and 46.8 percent in the March quarter.
Managing Director Puri said that he is expecting gross margins to improve further and that the margin is back to the 20-24 percent band.
Shares of Pidilite are trading 0.8 percent higher at Rs 2,541.40.
First Published: Aug 11, 2023 12:41 PM IST
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