Bharat Puri, revealed that this uptick in ad spending is anticipated to return to standard levels in the subsequent quarters, Q3 and Q4.
Pidilite Industries, a manufacturer of adhesives, sealants, construction chemicals, and craftsmen products, has reported a substantial increase of 70-75% in its advertising expenses during the first quarter of the fiscal year 2024. The company's managing director, Bharat Puri, revealed that this uptick in ad spending is anticipated to return to standard levels in the subsequent quarters, Q3 and Q4.
Puri noted, "Recognized for our advertising and marketing efforts, we have notably escalated our advertising expenditure in the initial quarter. In fact, our advertising outlay has surged by 70-75%."
He further elaborated, "As we progress into the second, third, and fourth quarters, we plan to revert to our customary advertising rates, investing in the promotion of our brands."
Pidilite Industries houses a diverse array of brands, including well-known names such as Fevicol, M-Seal, Fevikwik, Fevistik, Roff, Dr Fixit, and Araldite. In a recent financial update, the company demonstrated a commendable 32.5% growth in its consolidated net profit, reaching Rs 473.69 crore, for the quarter ending in June. This surge was primarily fueled by robust volume expansion. Concurrently, the company's revenue from operations experienced a 5.61% upswing, reaching Rs 3,275.11 crore.
During a recent roundtable discussion, Puri offered insights into the company's market dynamics. He highlighted the noteworthy trend of rural growth outpacing urban demand, a shift attributed to favorable monsoon conditions. Puri suggested that this trend might endure for approximately the next six months.
Puri also expressed optimism about the stabilization of input prices, citing relief from the inflationary pressures that have been persistent for the past two years. This newfound pricing stability provides Pidilite with the confidence to reinvest in the market.
Increased construction activity appears to be a driving factor, contributing to heightened demand. Pidilite's recent venture into the paints market aligns with this trend, with expansion plans contingent on consumer response. Puri emphasized that this expansion is a gradual, organic process for the company.
While Puri acknowledged disruptions caused by heavy rains in certain regions during the current quarter (July-September), he noted that overall, there isn't a significant divergence between conditions in the first and second quarters. Puri believes that a clearer picture will emerge once natural circumstances stabilize.
Looking ahead, Puri anticipates that the trends observed in the first quarter will persist throughout the remainder of the year. He highlighted consumers' heightened interest in home investments, spanning new homes and renovations. Notably, Pidilite has observed rural growth surpassing urban growth, indicating positive prospects for the company.