Bharat Puri, the company’s managing director, pointed out that 30% of the country’s ₹70,000-crore paints business is in small towns and rural markets. “We want to get a 10-15% market share of this business,” he said. “When we get our model right, we want to be among the top three players in these (non-urban) markets.”
The shift in strategy coincides with a looming leadership change at the company. Puri, the first professional manager to lead Pidilite, will step down from his role on 31 March after nearly a decade at the top. He will pass the reins to Sudhanshu Vats, who joined the company in 2021 and has been serving as managing director designate since March 2024.
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There may be bigger plans on the anvil, too. Pidilite is said to be one of the contenders to buy Akzo Nobel’s paint business in India, estimated to be worth at least $2 billion. If it fructifies, it could become the company’s biggest buyout deal. Puri, who spent 18 years in Asian Paints in an earlier stint, declined to comment specifically on Akzo Nobel.
However, he said there are two senior executives who are constantly scouting the world for new deals, more for technology than for products. But he affirms that they won’t shy away from making an acquisition if there is a good business fit. “Everyone said that our acquisition of Araldite for $300 million was expensive, but by growing its sales 10x, we have been proved right,” he said.
Facing up to competition
To be sure, Pidilite, which dominates most of its big product categories comprising glue brands like Fevicol, M-seal, tile adhesive Roff and multipurpose cleaning spray WD-40, is likely to face the uncommon prospect of competitive pressure in decorative paints.
In this business, Pidilite will be pitched against market leader Asian Paints and deep-pocketed new entrants like Aditya Birla Group’s Grasim and Sajjan Jindal’s JSW Paints, which have launched their paints business in the past few years. For perspective, Grasim has committed ₹10,000 crore to the paints business, twice as much as Pidilite has spent across all its businesses in capital expenditure in the past three years.
Analysts were surprised at Pidilite’s plan for decorative paints, especially as competitors like Grasim and Jindal Paints have already built factories and rolled out their products.
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“At first glance, it was a bit surprising,” said Abneesh Roy, head of institutional equities firm Nuvama. “But when someone joins the dots, it seems a well-thought-out strategy. Along with its exterior paint products, it will now have a complete range of paints for the semi-urban and rural markets.”
“We started talking about adjacencies 10 years ago when it was not a fashionable word,”: said Puri. “Then analysts started using the phrase total addressable market (TAM). But if you look at our growth, we have always grown by creating new categories or adjacencies.”
Pidilite’s strategy
Pidilite will play to its strengths in growing its new business. Puri says he has lost count of the number of apps his firm runs for its dealers and customers.
Pidilite’s dealer app, Genie, currently accounts for 30% of the company’s overall sales. Pidilite also offers several additional apps that target various customer categories and product segments. These apps enable customers to seek technical support and place orders for products. He says that a third of all sales are registered through the apps. “We compare well with an FMCG player like Hindustan Unilever, which has disclosed a 20% number,” says Puri.
And by looking at semi-urban and rural markets, Pidilite feels its strategy is differentiated from the competition.
To start with, Haisha (a decorative paint brand) has been launched in some markets in Tamil Nadu and will be expanded in more southern states. “The large urban players don’t reach there at all. That’s a large enough market and profit pool to satisfy me. So even if I don’t go to urban India, I think this is a good enough battle, and the others don’t have the scale, and, you know, the patience to fight this battle. So that’s why we went there and that’s where we will remain.”
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Pidilite is betting on its 3,000 clubs for various lines of business across the country, comprising 350,000 users, including plumbers, carpenters, and contractors.
Though it is not a fair comparison, Pidilite’s market capitalisation of ₹1.43 trillion is a little more than half of Asian Paints’ ₹2.23 trillion. That’s despite the fact that Pidilite’s revenue is just a third of the latter. Pidilite’s market valuation was a mere ₹30,805 crore when Puri first walked into the corner office.
