Pidilite Industries Limited (PIDILITIND) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 and FY '25 Earnings Conference Call of Pidilite Industries Limited, hosted by ICICI Securities. [Operator Instructions] I now hand the conference over to Mr. Arun Baid from ICICI Securities. Thank you, and over to you, sir. We don't have the line for Arun, sir. We'll just connect him back. Mr. Arun sir, you are connected, you may proceed.

Good afternoon, ladies and gentlemen. On behalf of ICICI Securities, I welcome you all to the Q4 FY '25 and FY '25 Results Conference Call of Pidilite Industries. From the management side, we have Mr. Sudhanshu Vats, Managing Director; Mr. Kavinder Singh, Joint Managing Director; Mr. Sandeep Batra, ED and CFO; and Mr. Dharmendra Lodha, Senior Vice President. Now I hand over the call to Mr. Batra for his opening remarks, then we'll have to forum open for question and answers. Over to you, Mr. Batra.

Thank you. Thank you, and good evening, and welcome, everybody, to our fourth quarter full year earnings call. I'll quickly give you the highlights of the performance and the financial results which were approved by our Board yesterday. I'll quickly cover the fourth quarter performance and start with a stand-alone performance. So the quarter's stand-alone revenue growth was 10.2%. We've reached double-digit revenue growth despite having had very strong UVG in the earlier quarters. This 10.2% top line was underpinned by an underlying volume growth of 9.8% across categories and geographies. The Consumer and Bazaar underlying volume growth was 8%, which improved sequentially, and the B2B segment continued to report strong UVG and in the quarter clocked 16.4%. Our gross margins improved both sequentially as well as Y-o-Y, primarily driven by soft input prices. VAM consumption in the quarter was at around $880 a tonne vis-a-vis $925 a tonne in Q4 last year. And just for reference, in Q3 it was $884 a tonne. As we had mentioned earlier, we stepped up our advertising and sales promotion spends to drive demand generation. And in Q4, they were at 5.4% to sales versus 4.7% in Q4 last year. Our EBITDA margin remained in line with the fourth quarter at 20.6%. Profit before tax and exceptional items grew by 30.8% over same period last year. Some of that is also led by dividends from our subsidiaries. And therefore, when I comment on the consolidated results, you will probably get a more representative picture. If you would recall, last year, in the fourth quarter, in the stand-alone results, there was an exceptional gain of INR 7 crores due to a share buyback of our Pidilite USA subsidiary. And there was, of course, a divestment of our subsidiary in Brazil. This year, however, there is an exceptional loss of INR 20 crores, largely on account of impairment of loan to an associate entity. The Board also had its meeting yesterday recommended a dividend of INR 20 per share, subject, of course, to approval by the shareholders at the forthcoming AGM. Our domestic subsidiaries reported double-digit sales growth in the quarter. EBITDA growth was also double digits. Sales, however, of our international subsidiaries was kind of flat relative to Q4 last year, largely on account of festive holidays, in March, largely on account of Eid festival. So many of our subsidiaries had a lot of holidays in the month of March, which would have, to some extent, impacted revenue growth. Quickly commenting on the consolidated performance. Revenue for the quarter was INR 3,130 crores. And on a comparable basis, that is excluding the revenues of the Brazilian subsidiary, which was in the base last year. The growth is 9.5% over Q4 last year, and EBITDA before nonoperating income grew by 9.7% and profit before tax and before exceptional items grew by 20.7% at consolidated level. Profit after tax shows a growth of 40.5%, largely because last year, there was an exceptional loss of INR 72 crores on account of divestment of the business in Brazil. In the current year, the exceptional loss is INR 25 crores, as mentioned earlier, mainly on account of impairment of loan and investment in an associate company. Quickly looking at the performance for the full year, the -- at a stand-alone level, revenues at INR 12,023 crores are higher by 8.1%, underpinned by a UVG of 9.3%, with Consumer and Bazaar growing for the full year at 7.2% and B2B at 19.2%. Gross margins expanded by 254 bps and EBITDA margins expanded by 70 basis points. Our domestic subsidiaries and international subsidiaries all reported growth and improvement in profitability. As a result, the consolidated revenue for the year was INR 13,094 crores, higher by 7.6%. Again, after adjusting the business of the business in Brazil, which had been divested in March last year. EBITDA for the full year were INR 3,013 crores, higher by 11.3%. PBT higher by 16.2% and PAT for the year at INR 2,096 crores was up by 20% over last year. So with this, I'll hand over the call for any questions that the participants may have.

[Operator Instructions] The first question is from the line of Abneesh Kumar Roy from Nuvama.

My first question is on the demand side. So in the Q4 call, almost all the FMCG companies and even Asian Paints yesterday, FY '26 outlook in terms of the volume growth, overall demand side, they have said that FY '26 will be better than FY '25. In your case, in Q3 call, you had said that in Gujarat and some pockets of Andhra, Hyderabad, et cetera, real estate, there was some tightness in the demand side. So if I take that and given you've already done quite well in FY '25, it's a reasonably high base. In your case, you think these robust numbers of high single-digit kind of volume growth or say, double-digit kind of sales growth. Is that looking possible in FY '26 when I combine all this?

Abneesh, first of all, I think, good to hear from you and always consistent in keeping your record on being #1 on the block. So thank you. It's indeed our pleasure sort of to hear from you. So I think like the others have commented. See the demand scenario -- so let me look at it like this. So the consumer demand in a pristine sense in a normal environment is continuing to look good. So we completely echo what you have been hearing from others. In our case, we are also seeing that the trust of the government on government spending, we believe, will be stronger in FY '26 because the elections are behind us. Last year, there was that national election and some others. So therefore, that effect will flow through in my -- in our opinion. And also, I think second consecutive good monsoon which is what has been predicted will further add to this. So from a consumer demand point of view, we remain quite consistent. We have always said Abneesh that we will deliver double-digit profitable underlying volume growth. And so therefore, that is something we will continue on. We are on this treadmill. So we have, therefore, the base has got no major effect on it. I think we've delivered a good FY '25, but that does not mean that FY '26 should not be or will not be equally good. In all of this, as I'm speaking to you, we are in some kind of slightly -- we are in a very unprecedented macro environment, both from a geopolitical sense and also from a global economic sense. Now the big question for FY '26 is what is the longevity of this uncertainty and unpredictability. If this is short-lived about 30 days, 40 days, maybe even -- maybe a month or 2 max, then I think the year would perhaps play out to the fundamental consumer demand. If this is extended, then the impact of this is something which we've not factored in and will be very different in our opinion.

Sure. The geopolitical risk applies to everyone, that's the point well taken. One follow-up on this, on the weakness in Gujarat and Hyderabad markets in real estate, which you had pointed last time, is there any reversal? And are there more pockets in the country where this issue seems to be coming up?

So these specific places, it's eased out a little bit. That is fair. And it's also reflected in our overall numbers for the quarter, quarter 4, if you look at it, which we have reported. Our urban growths have been much better than what they were in the past. Although like we have maintained, our rural growths are still ahead of urban growth. So that piece remains consistent with our urban growth, especially for quarter 4 are much better. So this is, again, from a data point of view, also quite consistent to the observation you had made earlier.

My second question is on the slightly different thing I'm seeing in terms of your cost item. For example, in Q4, again, most consumer companies staff cost is almost stagnant on Y-o-Y basis. And if I see BSE 500 also, Q4 and earlier quarter also, there is just 5% inflation in terms of the staff cost. In your case, is there any one-off, 21% up Y-o-Y, 5% up quarter-on-quarter. Is there any one-off in staff cost?

Yes, Abneesh, there is some -- about INR 17-odd crores is kind of year-end adjustment that has happened that has kind of flowed into the fourth quarter. That's not going to get repeated.

Is it ESOP adjustment or what the adjustment it is?

A lot of it is there. Some of it is ESOP, some of it is actuarial valuation of our retiral benefit, some of it is true-up of whatever is the performance-linked compensation that we pay off. We have to true it up in March, right? The previous year -- previous quarter is all estimated. All of it gets trued up in March. And this year, we've got a onetime kind of a charge of about INR 17 crores. So if you adjust that, the manpower cost will be same as third quarter.

Sir, last quick question. So essentially coming back to the tariffs, Pidilite has always been ahead of the curve in terms of new demand generation. Now U.S. itself is saying that most of the Apple phones will be manufactured in India eventually. So would your optimism on opportunity from adhesives in phone manufacturing, would that get bolstered versus, say, 6 months back because of the developments? We don't know the tariff eventually where it will pan out. But based on the current understanding and comment for U.S. itself, would you say that the opportunity longer-term, becomes stronger here? I'm not talking about this quarter or this year. I know these are things which takes time, but is it looking better?

Yes, Abneesh, I think we've talked about this in the past also. We recognize the electronics, EV and maybe moving forward Semicon opportunity in India. We've recognized that in the past. We are very -- we are very confident of being able to sort of make good of that opportunity, and we are working towards that. I think on the very specific question on how tariffs will play out and how much of that will shift, I think we -- I would still wait and watch a little bit because I think we've got to see this. So therefore, the way I would respond is that we were bullish on this opportunity. We had recognized this opportunity already. If this opportunity becomes even better opportunity, we will be better placed to exploit that. I think that's what I'm saying.

The next question is from the line of Nitin Shakdher from Green Capital Single Family Office.

Management for another steady set of good results. My question is more forward-looking. So please answer it in the present to the best possible that you can. Now we've seen many large industrial players entering cements, paints and wires, wires and cables and things specifically that hits the margins of the larger dominant companies, now whether it's Asian Paints or Havells, who already had a lot of market share. Now is there any future risk mitigation plan that the company is working on which sort of tells them that what should we do in case a larger industrial house were to enter the adhesives? And just wanted to get a management sense on how we're working in the future because it might happen in the future, we don't know when, but it might. So I just wanted to get a sense of that. This is more as an investor rather than an analyst.

Yes, Nitin, I think thanks for raising this question. And I think this question has been asked of us earlier as well and especially in some one-on-one conversations. So I think the way to look at Pidilite and I'll answer it in 2 stages. One, explain a little bit of how we think you should be or others should look at Pidilite, which is a little different. And 2 is to your specific question on what more are we doing to sort of strengthen our position and make this eventuality, less likely, if at all, it should happen. So now the question is, first of all, Pidilite, unlike many of the players, sometimes we get compared to is far more diversified even today. So when we talk of Pidilite, we obviously and very rightly talk of us as an adhesive company and as Fevicol, which is our flagship brand. And we are indeed very proud of both our presence in the segment and, of course, Fevicol as a brand. But I think our portfolio is now far more diversified. So this piece is less than 1/3 of our portfolio. Our portfolio has a very strong construction chemical coming in and growing very rapidly, as we speak to you. Our portfolio has expansion in the area of projects and services where we've demonstrated very good growth in the past 7 odd quarters. Our portfolio also has progressively renewed industrial products trust. And we were -- Abneesh's previous question on electronic adhesive was also pointed in that direction. So our portfolio is far more diversified compared to any of the others you've spoken about. Also, as we -- and also the sheer size of the business, even if you were to take a part of our portfolio, which is adhesives is not as big or arguably from a -- especially from a size point of view as attractive as it can be for some other sectors. And thirdly, I think we strongly believe that our brands are far, far stronger than some of the branded names that I talked about, maybe with the exception of 1 or 2. Fevicol, as we have said repeatedly, is a consumer brand, and it's only India is perhaps the only country where Fevicol gets mentioned in the top 10 consumer brand across categories. It's a part of the cultural lingo. So the strength of the brand per se is in our judgment disproportionate to the comparisons that get meet. Having said all of this, I think what we, as a company, are going to steadfastly do, which is up to us, and we are going to work -- continue to work on that, is to continue to further diversify our portfolio, strengthen our portfolio, both from the point of view of product category diversification, but also as we go forward in the form of geographical diversification and growth of international business. So as the company grows, the richness of our portfolio and the diversity of our portfolio in some ways is going to always be a strong indemnity or a strong insurance, if I can use the word to any likely such move.

Okay. So my follow-up question on that is -- it's extremely clear that you've already anticipated the risk and probably the management is working on the strategy or revision that if a risk like that were to happen, you will be able to counter it. My follow-up question is, is there any feedback on the ground from, let's say, the larger distributors, the business-to-business business or the business-to-consumer business. And what can the company do in terms of innovations that it's probably not done before. I mean, it's very tough to change products overnight, but strategy at the management can look into working with innovative ways of trying to control a larger market share. So if that risk what will happen, you probably lose a lot lesser?

Yes. So this is one thing, Nitin, which we, as a company, Pidilite one of our strength is actually listening feedback continuously from the market, from stakeholders. And when I say market, I mean our dealers, our users, which is applicators and all, consumers where it is relevant and so on and so forth. So -- and all partners. So it's a very consistent and continuous stream. We continuously keep listening to this. We continuously keep working on that. And I think -- so therefore, that is something which we've been doing all along. And if you look at -- to just give you 1 or 2 examples. I think the way we look at -- keep looking at innovation and premiumization. So if you look at our Fevicol flagship brand, I think our premium most portfolio -- the most premium offering now, which is called Fevicol Hiper, Hiper Star is doing very well. Indeed, these things come out of that. Also from a substrate point of view, we have something called a multi-strate, substrate, Fevicol called Fevicol Nail Free Ultra, which is actually a different chemistry, by the way. And also, but it's applicable to multiple substrates. So that's doing exceedingly well. It's growing very well as I speak to you. We've also introduced something called Fevicol Relam, which is basically, if you can -- India, lamination is a very, very prevalent habit on -- and that -- so your ability to now sort of laminate over a laminate kind of stuff, so product helping you with that. So just a few examples I give you to give a tangible feel. But we keep looking at a lot of these things, again, within the context of adhesives and wood working, the entire movement from on-site to off-site, we've been cognizant of that. We have built a very strong off-site team called joinery team, our shares are strong there. Our profitability is good there. So we are very cognizant of a lot of these things which are happening. And these remain vigilant, attentive and proactive in many of these areas.

Great. So I mean Sudhanshu, my one follow-up is that if the company is proactive and innovative. Now I understand that cybersecurity is not a core business of the company, but you have multiple plants running logistics. Is the company working to tackle concerns about cybersecurity if tomorrow, we are living in an information world and if tomorrow, we think that some other risk might come in. Any thoughts on the management, any discussions on that? Any -- I know it's not connected to the main business, but I always worry about companies that are not looking at cybersecurity for their operations?

So, Nitin, you're absolutely right. This is not our main business, but I have always maintained all companies are technology companies and so as Pidilite. And I think cybersecurity has been top of our agenda from a risk management point of view now, not for this year, but for arguably 2 or 3 years. We have a dedicated small team cell. We have a very competent person looking after this, and we have partnerships with the best in the country in order to make sure that we are ahead of the game on cybersecurity as well.

[Operator Instructions] The next question is from the line of Jaykumar Doshi from Kotak Securities.

Crude price has come up quite a bit in the last 1 month so the price in your raw material basket. And what percentage of your raw material basket do you think will have a deflationary tailwind?

Jay. So a large proportion of our products are indeed derivatives from crude, but all of them don't have a linear price in the short-term with crude. So I think it is something that one has to wait and watch as to how the overall demand supply, inflation, currency, how all these variables play out. But certainly, the fact that crude prices have cooled off is a very positive sign for us. We haven't seen immediate transmission of it. VAM remains at the levels that we consumed in fourth quarter. So I think it's wait and watch, but certainly, the signs are, I would say, positive.

Understood. And do you think this year could be a year where pricing perspective, it could be a deflationary year. But at this point of time, it's too early to sort of...

There are too many moving parts, very difficult to hazard any guess at this stage. We'll take it as it comes.

Understood. Second question is B2B segment has done consistently well for a few quarters now. So on the high base, do you still think that this is a business where low to mid-teens kind of growth is sustainable for maybe 2, 3 years?

Yes, yes. The short answer is yes. But I also have Kavinder now who directly look after this and we've sort of formed a division called Pidilite Professional Solutions, which is going to specifically be targeting at this opportunity. So we remain very confident, but I would request Kavinder to also elaborate on this to give you a little bit more context and favor on how we are progressing.

Thanks, Sudhanshu. Just to build on your question, I think we are seeing a fairly large opportunity in the construction sector. And as you know, we are already present through multiple brands, whether it's Dr. Fixit, then we have a floor coating brand Dr Cipy and we have tile-adhesive solutions through Roff. What we are realizing is that there is an opportunity to tap into this larger sector by going in an integrated way to the architects and structural consultants and that is what -- when Sudhanshu talked about Pidilite Professional Solutions, this is what it is all about. We want to make a big move in this area so that we are able to get ourselves specified in various segments, whether it is residential, whether it is commercial, within commercial, hotels, hospitals, education institutions, as well as the EPC contractors -- the big EPC contractors through which we will be participating or rather already participating in the government and infra projects. We believe that the professional solutions, which are more in the nature of systems -- construction system solutions, which are needed by various players have to be addressed in an integrated manner rather than selling products through multiple verticals, which we continue to do. So this is going to be a bit of a, let's say, as we speak, we are moving in this direction. And eventually, our idea is to also tap these segments in a manner in which even the go-to-market strategy is sort of around the segments. So we believe that the opportunity is tremendous. And we are confident that as long as the cycle of construction of swing, which is on right now, almost in all the segments, and you can track that through the growth in even cement consumption, the number of hotels that are getting constructed, the number of new hospitals that are coming up. So there seems to be an opportunity to be leveraged by Pidilite's strength that we have with regards to our R&D and our solutioning approach that we are taking. If you have any follow-up question, I can take it up. Otherwise, I'm handing it back to Sudhanshu.

Yes, I do have a follow-up. Look, you gave a very good overview of your business at the Investor Day earlier this year. But what -- I'm not too sure about this from a classification perspective, INR 3,000 crores top line for B2B business in FY '25? What are the big areas? How do you break up that INR 3,000 crores into sort of -- because earlier, there used to be pigment business, there is industrial adhesives, there must be something else. So if you could give us some color.

Yes. So our B2B has basically -- you could divide that into 3 subgroups. One is your business of waterproofing that we sell to projects...

That's Nina Percept.

It has Nina Percept, which is an application company. But then we also have product supplies that go to these projects. Nina does apply supply. And then we have a business which is into pigment and pigment preparations, and then we have an industrial adhesives business, which also makes industrial intermediates. So we don't specifically share the revenues of each of the segments. But there are these 3 categories, the projects business, which Kavinder spoke about is largely India led and is riding on the back of an upswing in construction activity. The pigment business has large exports out of India and that has done well. The big customers of that business will be paint and ink companies. And then you have industrial adhesives, which supply to a wide variety of end-use industries.

[Operator Instructions] The next question is from the line of Avi from Acquire.

I just wanted to get in -- if you could share any update on the paints and lending business. You had indicated you might kind of think about sharing that towards March end. So would love to hear any update over there, sir?

Yes, yes. So I'll give you -- I would like to call the intermediate updates, if I can, but I will give you a context and flavor on both. So let me first start with the lending piece, the Pargro. I think this question keeps coming up. So I think 2, 3 things and we've said this earlier as well, but just want to make it very clear, Avi, that's the question to ask is what business are we in? So the business we are in here and while it is classified as lending business, that's correct. But the business we are in is to actually strengthen our applicators or our dealers with ability of finance in order to ensure that they are optimally able to grow. So therefore, our focus will continue to remain our ecosystem defined as our large contractors, contractors or dealers. So therefore, that's the first key part. In -- and I just want to reiterate that because that's very important. We are not doing the classic lending, lending business. We've said this earlier. I'm just repeating it. It will -- so -- and in Bangalore where we've done this project, we are making good progress. We've actually -- so on all parameters, we are making good progress. But like many pilots, and in a classic Pidilite way, while the progress is good, we still feel that we need to stay there. We feel that we need to fine tune it. We feel that we need to therefore continue to cross the T's and dot the I's on the playbook, develop modules and then look forward. So making progress, focused on our own stakeholders, our own ecosystem, more specifically our dealers and contractors and so on and so forth. We have very good understanding of these guys. We have deep relationships. We broadly understand their financial capability as well. So I think that's the piece on Bangalore, progressing well, and therefore, this piece is progressing reasonably well. I think on the paints part again, as you are aware, we are in the 5 states of -- largely in the South. We normally call that [ TAOTK ]. I'm taking the liberty of sharing the acronyms with you, which is basically this is your Telangana, Andhra Pradesh, Orissa and TK being Tamil Nadu and Karnataka. So we've been there in TAOTK. We are making good steady progress. So we are growing quarter-on-quarter. We are indeed growing month-on-month. We are very keen to continue to evaluate at a micro level like-for-like growth. Our fundamental -- we want to develop a very confident understanding on how we're doing with dealers, big dealers, dealers where we have printing machines, contractors and so on and so forth. So that work is happening. Here again, like I said you for the earlier piece, we think that we need to do more work to develop our moat, our fundamental hypothesis of doing things in a very Pidilite way and demand generation piece. So that work is again happening. We believe while we made good progress. And most of the company would say that this is good sales progress [Foreign Language] but Pidilite is going to sort of -- we are going to, again, continue to fine-tune our playbook. We want to be sure that we've got our demand generation -- particularly our demand generation playbook, right, and very, very critically important for Pidilite, as you know, for most of the other things. So we are working on that piece as well. And once we have that, we will look at further extension, and we'll come back to you. But we are making very good progress, even on Haisha, and we are going sort of -- we have been basically going -- in these places, we are delivering strong progress sequentially as well.

Okay, sir. And sir, any size targets, anything you would want to kind of share for the forum or not too early?

No, I think that is something which has been shared earlier as well. So I think, frankly, I think it may be a little bit premature to share the size, but I'll tell you the philosophy. The philosophy is simple. Philosophy is that we will be focused at least to begin with and for a considerable period of time on what is called rurban and small town India, which is basically your small -- rural and small town India. And we want to be an important player in rurban and small town India. So that is the measure we are keeping ourselves. So are we getting there? Are we in the consideration set of the dealers, are we getting the recall from the consumers? Are we getting demand in these places? So this is the work which we are working. Once we get a little bit more this thing, we will work on numbers. Again, for Pidilite numbers follow. So I think once we get this thing right, hopefully, numbers will follow, and we'll be in a position, Avi, to even share some more with you.

That's very clear. Sir, my second -- just a clarification, and please correct me if my understanding is right. The key risk in assuming that 4Q is a reasonable guide on what we can see panning out in FY '26 for -- which is the cautious -- caution for you is the longer period of geopolitical linked uncertainty? Is that the right understanding? And otherwise, you would -- we've seen 2 quarters of good growth. So I'm just trying to better appreciate why should we not at least build in 4Q as a reasonable expectation on growth going forward on sales?

That's a good point, Avi. Let's see again, I think this came up in some of my early morning discussions also. I think this -- when we say cautiously optimistic, let me sort of break it up into 2. We remain optimistic on fundamental consumer demand, which I think has been strengthening in the earlier piece when the demand was a little sluggish, we managed to deliver a double-digit growth -- underlying volume growth. So we remain confident that we will and can deliver double-digit underlying volume growth in the pristine consumer demand sense. But as we enter FY '26, as I was saying, and I think the first question which was asked, these are unprecedented times, the geopolitical situation and also the global economic situation is very uncertain and very unpredictable in that sense. So therefore, the cautiousness is coming around largely from there this time. I hope that answers your question.

No, that answers the question. So -- sorry, sorry, sir, you're saying...

No, no, absolutely. That's what I'm saying. I hope that answers your question.

[Operator Instructions] Th next question is from the line of Saurabh Kundan from Goldman Sachs.

My question is how much cover do we generally carry on our raw material? Just trying to see, what is the lag with which you start seeing benefits of crude correction? And related to that is when RM cost does go down for you, let's say, at some point, can you take a gross margin expansion from here? Or the gross margin you think is at a good level now?

Sorry, overall -- let me answer your question. Overall, we would have about 60 to 75 days cover in terms of raw materials, that will become slightly higher when you also add the finished goods inventory that we keep. And in terms of the action, if input costs do soften, it's something that we would -- we don't react on a day-to-day basis to movements in cost. We will look at what is the longer-term or a medium-term outlook on input costs and accordingly take a call. I mean if you would recall from October '23 from the time where input costs actually started to go down, we would have taken price adjustments, which is why you would have seen that our revenue growth would have lagged underlying volume growth, and there has been EBITDA margin expansion. So I think when input costs correct, it all depends on the magnitude and the duration and we will take a very judicious call at that time because we are very careful that we don't want to pocket all the gains and suddenly make our category very attractive for competition to enter via the back door.

[Operator Instructions] The next question is from the line of Nitin Jain from Fairview Investment.

So I have 2 questions. Given that the government is giving a lot of priority to electronics manufacturing in the country. So can you share the opportunity side that we can see in adhesives used in electronic assembly? And my next question is, if you can elaborate more on the CollTech partnership and how Pidilite stands to benefit. Those are my 2 questions.

Yes, Nitin, I think the 2 are related questions. And I think let me just tell you. So therefore, I think in terms of market size estimation for electronic adhesives. I think if I was to give you a broad number, and I'm trying to give you a broad number of the market size for electronic adhesives moving forward because I'll tell you this electronics manufacturing also needs to be contextualized. A lot of the time when we say electronics manufacturing, many times, it is just assembly. And if it is assembly, so then the use of adhesives is much less. As we keep getting into more and more manufacturing including the motherboard, the other pieces and so on and so forth electronic adhesives really kicks in. So I think it will progressively build. Our understanding is that this business could be a $1 billion market by 2030 to give you a ballpark number, and I'm talking about electric -- electronic adhesives opportunity. Now having said that, this is also a very complex business because there are multiple parts in each component, and then there are multiple products and then there's, of course, EV and then there is in future some semicons and all that stuff. So they've got on mobile itself, different models and in iPad, laptops, all of that. And there are multiple moving parts in this. So what happens is that there are fewer companies that are specialized in individual areas. There are each company specialized in individual areas. There aren't many companies or any company, if I could use the word, definitely not many companies which will perhaps have the full spectrum, point #1. Point #2 is that even when you have this classically for any vendor client partnership or relationship, there will be multiple people who will be there. So therefore, in that context, that naturally flows to my second question, which is that we've now partnered with CollTech. As we speak to you, we are their official -- exclusive distributors for this part of the world for India as a territory. And I think that is progressing well. And in this business, you have to start with specifications, then that period goes for some time, then you have to bunch your specified some more sampling and trials and then you get into commercial. As I speak to you, we managed to get a few commercial orders, so that has started. We -- as I speak to you, we are in constant touch with all the important contract manufacturers and EMS, Electronic Manufacturing Services companies as they are called. They are the ones who put all of this together in some form or the other for various brands. So we are making good progress. It's a pioneering business. It's going to take time. We have full intent to play in it, and we are building it block by block.

That's very helpful. Just if I can add a follow-up to that. So most of the applications would be within mobile phones or like it is spread across mobile phones, televisions, et cetera?

No, no, it's spread all across. Mobile phones is larger as what tends to be, but it depends on, again, our product portfolio, and that's -- I'm not going to talk about that at the moment, but it's not only product profile is spread, not only mobile phones, it's hearables, it's wearables. So you are thinking only electronics in one direction, but you have all your hearables which come in, which are actually by the way India may be a larger market because of presence of Boat and all that in that. And there are, of course, wearables again. So India is, again, a pretty large market for a certain set of wearable products. So it's a pretty large get. It's quite -- it's very interesting, but it's reasonably complicated. It's what I want to tell you.

[Operator Instructions] The next question is from the line of Latika Chopra from JPMorgan.

My first question was regarding some color on the underlying volume growth for some of your new forays or relatively new forays. One is [indiscernible] and the is wood -- wood finishes. And also, if you can give some flavor on how waterproofing volume growth trends have behaved versus 7%, 8% volume growth that we have blocked for Consumers and Bazaar for FY '25. And if you could also share some color on how do you expect these growth rates to trend going forward?

Yes. So let me answer the question, and we'll give you some indication. I have not followed the first thing was I've understood waterproofing, which you said later, what is the other one you wanted about Roff waterproofing.

Tile adhesives, Roff, basically that's being...

So Latika, as you very well know, the way we define our growth categories, and there's a broad this thing we say 2x to 4x of the real GDP number. And I'm happy to share with you that tile adhesives a little bit more than Dr. Fixit construction chemicals. But both of these growth brands and categories are delivering to that range. So therefore, and therefore -- so we are happy with that. And when we say here, as Kavinder was explaining to you earlier, especially in the case of Dr. Fixit, but arguably for both brands, we take the full spectrum. So we are talking about what you would call retail or bazaar for our business projects and so on and so forth. So it's a full spectrum of these product categories in -- for Pidilite. So they are both delivering in that zone. Roff, a little ahead of Dr. Fixit, as you would expect in terms of growth. Our understanding is that this trajectory will continue. We are quite confident of that. Kavinder spoke to that on how we are looking at this piece and therefore, more enablers, more go-to-market -- more specific go-to-market structural interventions, which we are doing, which should help us deliver that. So therefore, momentum on both of these should continue moving forward as well in our opinion.

Sure. The second question was on your rural retail expansion strategy. If you could give us some color on what kind of number you landed in FY '25 with on PKD? And what kind of growth plans you have there?

Yes. So PKD, we have continuously been expanding. And I think even in this quarter, we further expanded. So we've actually -- we closed the year, if I could use that, and we share that number, so I'm happy to share that again, is there are about 16,500 PKDs now, basically, which about close to just under 1,000 added even in this quarter. So we continuously keep making that. But I think the way to look at expansion or distribution, Latika, is I think 3 areas. I think 1 is that PKD momentum will continue. But I think the other area where because of our thrust on construction chemicals, you will also see us looking at what we call the DFCs or Dr. Fixit Centers. We'll do a lot more work in that space as well. That will continue. And I think thirdly, both for the DFCs and PKD, the terms which we have used, which all of you are familiar with, we will also look at qualitatively how do we take them to the next level. So it's not just numbers, but it is what are we doing with these. And therefore, as the village, where it is there tends to mature or become bigger or as the demand continues to grow, how do we make these better? And maybe we use terms like Super PKD, and all that. So therefore, that is the stuff which will continue. So from our -- our expansion journey continues both quantitatively from a numbers point of view, but equally and more importantly, qualitatively from what we do there, how do we use that real estate more and more effectively for us.

Understood. So basically mean throughput per outlet, also...

Range, throughput, but -- and Latika also the demand generation activities and multiple things.

Is there a way you -- one could measure what's the salience of the revenue we generate from these stores? Is it a very meaningful number?

So we don't share that. I think, of course, we do measure all the productivity measures which are needed for this and how it should be effective.

The next question is from the line of Tejash Shah from Avendus Spark.

Two questions pertaining to Haisha. So just wanted to understand our go-to-market strategy, especially when the incumbents are complaining that the shelves -- the cost of shelf has actually gone up to because of the competitive intensity. So how are we kind of going about it? Second, at what scale or repeat purchase trigger or readiness -- channel readiness would you be confident to take Haisha Pan-India? What is the key trigger that we are monitoring for that rollout?

It's a very good question, Tejash. But I must also tell you if I disclose all of this, I think this is -- in the current environment, we are not going to be able to talk about any of this. I think the question broadly and maybe at the risk of not repeating myself, and I talked about it in some detail. See, we are looking at how to progress this in a different way. First of all, when you come at it from the competitive intensity in urban India, we don't approach this from that point of view as of now. So I think we look at it from growing demand in rural and small town India. Is there are a little bit of interplay because of the competitive intensity in this sector at this moment, the answer is yes. There is a little bit of interplay. You don't live in isolation. But I think that's the reason that we want to continue to fine-tune this as we go forward. But I think we are approaching it, Tejash, very differently from the conventional piece. We are approaching it more from how would we be -- so we have to keep asking the question on what is our license to play and right to win. Our license to play is broadly there because from the point of view of our portfolio, our availability deep down, and we've spoken about that the way we reach out to some of these places. Our right to win needs to be sharpened and we need to be very clear on that, and we're continuously working on that piece. And as I said and maybe just a quick repetition. From the point of view of numbers, I think we are making good satisfactory progress. Our numbers are growing quarter-on-quarter, month-on-month. So we are making progress. So therefore, that is the good news. But from the point of view of whether when are we ready to scale it up to the full level, I don't think we are ready at this moment. We need more work to be done, and that's what I spoke about earlier as well.

Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Thank you very much. I would like to thank each of them who joined the call for their continued interest in Pidilite. Thank you very much. Have a good evening.

On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.