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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, good day, and welcome to the Pidilite Industries Q3 FY '22 Earnings Call hosted by Prabhudas Lilladher Pvt Ltd. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Amnish Aggarwal of Prabhudas Lilladher. Please go ahead, sir.
Hi, everyone. Welcome to the conference call, and thanks to the management for letting us host the call. We have with us today Mr. Bharat Puri, who is the Managing Director of Pidilite; Mr. Sudhanshu Vats, who is the Deputy Manging Director; Mr. Sandeep Batra, Chief Financial Officer; and Mr. Sunil Burde, who is the Senior Vice President, Accounts. Without further ado, I hand over the call to the management for the opening remarks, followed by Q&A.
Good afternoon, everybody, and thank you for joining the Q3 earnings call. I will first begin with a summary of the performance, and then we'll open the floor for Q&A. I will cover consolidated sales first. So on a consolidated basis, net sales for the 9 months ended December '22 stood at INR 9,077 crores and registered a growth of 23%. This was led by a 24% growth in Consumer and Bazaar segment, and 19% growth in the B2B segment. Sales for the quarter was up by 5.1%, which on a 3-year CAGR is a growth of 15%.
Material cost as a percentage to net sales for the quarter was higher by 175 basis points over the same period last year, but was 88 basis points lower than the immediately preceding quarter. As we can see that input prices have moderated and gross margins have improved marginally, though, over the previous quarter, this is largely as a result of carrying a high-priced inventory, which will get liquidated over the next couple of months.
EBITDA margins are in line with the previous quarter, despite increased spend on A&SP. EBITDA for the 9-month period ended December '22 was up by 5.5% over the same period last year and largely as a result of higher input prices that have not been passed on.
Profit before tax and exceptional items for the 9 months at INR 1,331 crores was 5% higher than the same period last year. Profit before tax for the quarter, however, was INR 419 crores and lower than the immediate -- over the same period last year.
Quickly looking at the standalone financial performance. Net sales for 9 months ended December at INR 8,179 crores was higher by 23.3% led by strong growth in C&B segment, up 24.6% and B2B segment up 18.6%. However, for the quarter, net sales registered a growth of 4.8% largely as a result of a very high base.
Just for the information of all on the call, in the third quarter of last year, we had taken 2 price increases that would have led to some amount of inventory buildup in the channel. And if you would recall last year -- in the previous year third quarter, we had reported a revenue growth of 26%.
So coming off a high base and given the fact that there was price increases taken last year, the growth for the current quarter should be better looked at on a CAGR basis, where the numbers are very healthy at 15%.
If you look at how input costs have behaved, as I mentioned earlier, costs have moderated. VAM, which is our biggest raw material, the consumption rate in the third quarter was about 2,000 tons versus 2,500 tons in the second quarter. Current spot rates, of course, are much lower. We are around the $1,200 per ton range.
If I look at the performance of the subsidiaries, despite uncertain global economic conditions, currency devaluation and inflation, our international subsidiaries reported moderate sales growth, whilst EBITDA remained under pressure due to higher input costs and impact of currency depreciation. Our domestic Consumer and Bazaar subsidiaries continue to deliver industry-leading growth as well as profitability.
We are increasingly optimistic for the future because the significant input cost reductions as well as the increased construction activity, combined with government initiatives in CapEx and the rural sector, all bodes well for the future. And our focus continues to be to deliver broad-based profitable volume growth.
With this, we'll open the floor for Q&A.
[Operator Instructions] Our first question is from [indiscernible] of Kotak Securities.
This is [indiscernible] from Kotak Securities. Just wanted to check. So you -- last quarter, you had given a guidance that you reached 20% plus margins by fourth quarter. Would you change to that? And just a clarification, the 20% guidance, is that console or standalone EBITDA margins?
So just to clarify, one, we as a company don't give any guidance, so I think maybe the comment would have been misunderstood. All we had said was that given the trajectory that is there on input costs, and assuming that there is no black swan kind of an event and no major disruption in the economy, we are on track to achieve our EBITDA margins, in line with the corridor that we like to operate, which is in the 20% to 24% range. We have not given any definitive comment on when we are likely to reach that number.
[Operator Instructions] Our next question is from Ankush Agrawal of Surge Capital.
So my question was around the group coating segment [indiscernible] that is done by [indiscernible] So this business has scaled up pretty well in the last couple of years, so I wanted your thoughts to understand like what is leading to growth in this side of the business and how big of this opportunity is there. Like could it become INR 1,000, INR 2,000 crores business opportunity?
Yes. Thank you for that question. As far as ICA Pidilite is concerned, it operates at the premium end of the wood finishes market, therefore, makes what I would call not even mass premium, but pure -- super premium wood finishes. These are equivalent to the best available anywhere in the world. In fact, our Italian collaborator, which is ICA, has only 2 plants, 1 in Italy and 1 in India.
As you can see, over the last 4 years, we've registered very healthy growth rates. Largely, this is because of a lot of conversion from lesser premium, mass premium wood finishes to premium wood finishes and the increased prosperity across. Now without going into numbers, are the growth prospects of ICA Pidilite good? I would say, absolutely, yes. The past is a great indicator of its future performance.
And can you help me with the 9 months revenue numbers for it?
We don't share the subsidiary-wise numbers.
[Operator Instructions] The next question is from [indiscernible].
My name is [indiscernible]. Please refer to Slide #15 of the analyst presentation. I would like to know the revenue reflect -- the revenue from others and revenue from GCP alliance and why is it not really benefiting the company?
Araldite as a company has been merged with Pidilite, so the numbers are subsumed in what we show for Pidilite. They are not shown separately. And what was the second question that you asked?
How much revenue are you generating out of GCP alliance? And what percentage of revenue in the current quarter is related to GCP?
GCP? Can you kindly repeat your -- I'm not able to understand the alliance that you are talking about.
Yes. There is license agreement with GCP USA where you took constructions in the [indiscernible]. Where do you reflect that in the past numbers [indiscernible]?
No, I cannot -- I don't -- I'm not able to relate to the name of the company that you are saying. Maybe if you don't mind, you could connect with me separately outside the call and I will verify that for you. Okay?
[Operator Instructions] We have a question from Kaustubh Pawaskar of Sharekhan, BNP Paribas.
So my question is on the VAM prices. In your initial comments, you mentioned that the current spot prices are at around $1,200 crores, and the procurement price for us in quarter 3 was around $2,000. So should we -- considering the fact that the inventory of high-cost raw material is receding, should we expect the -- our consumption price to reduce substantially in quarter 1, considering the prices remain stable at the current level?
Actually, just to clarify, the current buying price is $1,200, and it was much below $2,000 also in the third quarter. The $2,000 that I referred to was our consumption price, so which is a mix of the higher price inventory and lower price inventory. So certainly, we will see benefit of the lower VAM prices starting from the fourth quarter itself. We will not have to wait until first quarter of next year.
Okay, okay. And my second question is on the demand, per se. Like the Tier 2, Tier 3 towns are really under the pressure. Tier 1 towns are a little resilient to what the current [ stood-out ] in the market is. But what is your expectation in the medium terms? Where do you see demand shaping up in the medium term?
See, Kaustubh, let me first just do a correction. Actually, we're seeing fairly decent demand across Tier 1, 2 and 3 towns. It's actually Tier 4 and 5 that have been under pressure, which is really the rural and the semi-urban markets.
We expect rural and semi-urban markets also to start hopefully turning around from January itself. As the money from the new crop starts coming in, the government puts in more spend in this sector. We're expecting a turnaround and better demand in this sector.
And again, just to give you a perspective, unlike the conventional consumption mass FMCGs, our business, even in rural and semi-urban India, is not declining or constant. It is still growing. The only thing is normally our expectation is that it grows 1.5x urban. It has come at times to the same level as urban or even a little below urban. And therefore, our hope that, across the next 6 months, this will see a major improvement.
Demand conditions in Tier 2 and 3 towns are fairly reasonable, and we're seeing an increased demand of construction activity. We're seeing an increased demand of commercial activity, both of which really helps the home improvement sector.
And should we expect any pricing action if raw materials are just continuing to stabilize in the current quarters, so that would further help you to [indiscernible]? Rather, the focus would be [indiscernible] sales volume and then focusing on growing the margins, et cetera?
We have always said that our focus is profitable volume growth. So volume growth is our priority. Thank you. Again, I don't want to make any predictions because any predictions for the last 3 years have not been good. But we expect raw material prices to remain largely stable, at least, across the next 3, 4 months, unless there are some events, new Russia-Ukraine or a situation like that.
The depreciating rupee also, we, therefore, have accounted in that. If you recall, we took pricing only at 75% of inflation. We don't see the need now for any further price increases.
[Operator Instructions] Amnish, would you like to ask the questions that you have?
Yes. So I have a few questions on the, you can say, scenario. First being that if you look at the past few quarters, the demand -- people were hopeful that the demand will come up. But post the festival season, also, I think the demand has not yet stabilized.
So do you believe that, say, not [indiscernible] in the one quarter that Pidilite will be back to double-digit kind of a growth, say, in another couple of quarters? And given the fact that now raw material prices are softer, so it will be largely a double-digit volume growth kind of a scenario. Is that possible?
See, without again going into predictions, Amnish, we have actually, post the festival season, not seen any drop in the urban demands of Tier 1, 2, 3 towns. We are seeing reasonable demand. It is actually rural and semi-urban that remains under strain.
Having said that, we expect this to continue, as we've always maintained our planned stroke objective is we divide our business into 3 categories: core, growth and pioneer. We try and grow core categories at 1 to 2x GDP, normally 1 to 1.5x GDP. Growth categories is 2 to 4x GDP, and we hope that pioneer categories become growth categories in 3 years.
If we look at, vis-a-vis -- if, therefore, the market improves, GDP improves, we will see our volume growths also improve. But without making any predictions, we are not seeing any -- actually, we see an improvement in November and December over October. Actually, it was October with the extended monsoon and the long Diwali holiday that actually impacted demand.
Okay. And sir, if you look at some of the companies we just say on the -- your wire side, which is also used in the, you can say, construction on the residential as well as nonresidential, so they have posted fairly encouraging set of numbers. So do you think that it is going to -- because you can see overall activity is there, so that will have a [ positive ] effect.
See, while I am -- by no means, am I an expert on the wire industry, so I won't mind making comparisons. But remember, overall, our business, 2/3 of our business comes from repair and renovation, and about 1/3 comes from new construction. I suspect for things like wires, et cetera, it's probably the other way around or even greater.
We are seeing that construction activity, both organized construction and real estate, in the big cities and individual houses in Tier 2 and Tier 3 are fairly robust. And as you know, as houses get completed, that's where the home improvement comes in. So we see that demand lasting for some period of time.
Okay. And sir, in terms of the demand, are you witnessing any, you can say, sort of a breakup that whether you're, say, Adhesive segment is doing better, your waterproofing segment is doing some of the new initiatives? So which one is the bigger driver to that?
See, as we've said, the growth categories, like waterproofing, is a growth category, so it is doing better at an overall level. Adhesive is -- a large part of Adhesive is core. They are growing -- both are growing. As we've indicated, when we look at our 9-month growth, we are growing at about 23%, 24%.
All our businesses have to grow, if we have to grow at 23%, 24%. Our CAGR in a volume sense are about 14%. So actually, we are seeing fairly broad-based growth, both across categories and geographies. Obviously, the growth categories, which is waterproofing, tile adhesives, these areas are growing faster than the regular core categories.
Okay. Understood. And sir, if you look at this quarter's margin, the margins, particularly on the domestic subsidiaries, then in the domestic subsidiaries, in the Consumer and Bazaar, actually, we have reported a loss. So is there any one-off over there? Or can you throw some light on this?
No, no. There is no loss. I think those numbers are not reported separately. So I think if you are only subtracting from the consolidated numbers, that may not give you the correct number.
None of our subsidiaries have -- in domestic subsidiaries have been reported a loss. In fact, they have reported significantly improved performance over the same period last year. But separately, Amnish, maybe after the call, I can connect and clarify to you. But just to confirm, none of our domestic subsidiaries have reported a loss.
Okay. I was just stressing to, I think, one of the tables, which is given -- so -- okay. So it was on Slide #12, yes, #12 right-hand side, the -- we. yes, B2B, there is minus 4.9%.
[indiscernible], Amnish.
[Operator Instructions] Our next question is from Amit Purohit of Elara.
First, just 2 points -- questions on my side. One, you highlighted the growth pioneer and core categories. So would you be able to share some salience of each? Is it possible to share that?
And second, I mean, just wanted to understand what are the new channels are you exploring in terms of -- from a distribution perspective? What are you seeing some industry trends, which are looking at new channels?
What I mean is that you've been seeing this dealer [ stroke ] distribution channel, and now they are in large retail formats, which are coming in, which are kind of becoming a one-stop shop. So how do you see that shaping up, plus the online channel? So just wanted to have your thoughts. How do you see 3, 4 years down the line things changing? And how are we phasing ourselves?
See, on the first question, just -- when you talk about the salience of core growth pioneer, are you asking really as to what are the -- what constitutes core growth pioneer?
No. I'm saying in terms of percentage-wise, like I understand prescription chemical, there has been a growth in that sense that pioneers are the right new innovation, right, and the core part remains the critical. But broadly, when I look at -- is that the way to look at when you share in your PPT pie chart, which talks about 50% [indiscernible]. But within the [indiscernible], probably, there would be some pioneer categories...
Absolutely, yes. So you can't go category-wise because there are -- because some parts of the category may be in growth in pioneer and some maybe in core. But broadly speaking, how do we look at core growth and pioneer?
In core, we have already created the category. So whether it's a heavy call, it's a heavy quick, it's an MC, this is where we've created the category. And our job is to grow the category because we have a market domination position as far as the category is concerned.
In growth categories, we have to create the category. We are normally a lot of times competing against nonconsumption. So for example, if you take waterproofing, even now, 6 out of 10 homes in India don't do any proper waterproofing. So the job is to make this 6, make it -- reduce it to 3. And then automatically, the market becomes far, far larger.
Therefore, this is about creating categories. So whether it is like tile adhesives where people normally just use sand and cement, they don't use an adhesive, these are all growth categories. You could also have growth geographies like Bangladesh. You can have growth channels like e-commerce. And in fact, that segues well into your second question.
See, as an organization, obviously, we're dynamic, and we're always experimenting, both with new channels and new initiatives. Just to give you a perspective. We have an initiative called Pidilite Ki Duniya, which is small rural stores in villages with a population of below 10,000. We now have close to 7,000 Pidilite Ki Duniya. In these villages, there will be practically no other home improvement company that reaches directly. We will be the only one in most cases. There may be some getting it from wholesale. Now that's a channel for, obviously, e-commerce.
3 years back, what we were selling in a year, now we sell the same in every 20 days. If you go to Amazon, the #1 drain declogger, #1 rust remover, the #1 clay kit, all are Pidilite products. So we're obviously looking at a whole lot of action there, where the modern trade, the emerging channels, we keep experimenting, we keep carrying along.
But remember, it's difficult, Amit, to make a prediction of what will happen in 3 to 4 years. In India, things move slowly, but they move surely. Our job is to make sure that we are in each of the emerging channels without trying to disturb the balance across channels.
Sure, sure. And I mean, broadly, on the first question, which I was -- what I was trying to understand is that over a period of time, the salience of growth categories, which have gone up and probably the core categories, if I am not wrong, I mean, should we assume that it should be down or could be less than 30% of the total sales or the Consumer and Bazaar [indiscernible] Is that the way to think? Or...
It was 75% core and 25% growth in 5 years. It's now about 2/3 and 1/3. In the next 3 years, we will make it 50-50.
Okay, okay. More in favor of growth. Okay, that's helpful. And lastly, on that second part, just a follow up on that. I wanted to understand, is that are you sharing some -- I mean, broader salience, I mean, do you think could this one-stop shop is a kind of -- could scale up very significantly and could be, let's say, double digit?
Or -- I mean I don't know what is the salience in the industry makes, so pardon me for my limited understanding. I just wanted your -- what would be the mix like just to get them off this -- how this -- I mean, distribution is shaping up?
And when you say one-stop shop, you refer to?
I mean, it could be -- so I mean, there are stores which are coming up like [indiscernible].
We are participating there, yes.
Correct, correct. So -- and then you are -- there are standalone. I mean, there are many players who are actually looking at this as an option in terms of building a format. So I actually -- I know this -- it will be very small. Maybe say, if you could share what is the e-commerce right now. Like you indicated, the growth trends, but what would the salience would be, whether 2%, 3% of our total or 5% of what would it be?
E-commerce is concerned. It's best to look at it as a percentage of the consumer products. There's a lot of great businesses. E-commerce is much, much smaller. And we are slowly reaching the same FMCG averages. As long as these one-stop shops are concerned, it's too early to say. We participate in a lot of them. We actually hold hands with a lot of them. But from a consumer perspective, I don't see any of them, which has been a runaway success.
[Operator Instructions] The next question is from Akshay of [indiscernible].
So one question is that if I recollect -- so VAM is just 25% of your raw material basket. So where you did talk that it has corrected from 2022? But sir, directionally, if you can give a sense on the balance, 75% of the raw material, I know there would be many. But just a broad sense if you can give -- like do you see some cooling off there also? How do you see them?
Yes. I think we have seen softening in most of our input costs. VAM, since it is the largest, by far, we specifically call out the cost trends of VAM. But in the others, also there is cooling off. Just keep in mind that the other raw material basket have not increased at the same pace as VAM.
VAM, just for your reference, kind of more than doubled in a very short period of time. So there, the correction also has been equally steep. But in other raw materials, also, there has been a softening in prices.
[Operator Instructions] The next question is from Keyur of ICICI Prudential Life Insurance.
Sir, the question is, in general, when most of the consumer [indiscernible] some kind of demand slowdown, any specific -- some new specific factors, which gives us [indiscernible] demand for our category?
Our category is, what we are seeing, Keyur, is there is a tailwind. Ever since the reduction stroke coming down off COVID, consumers seem to have evaluated their relationship with their own homes. And therefore, we've seen a lot of consumer attention to both renovating and expanding stroke, therefore, looking at new homes, which is why one of the reasons we are seeing real estate come back so strongly.
Now that obviously serves as a multiplier for us. Also as you see things like hospitality, malls, shopping, as all of -- as the consumer goes outdoors, it is something -- a hotel has not been used for 2 years, so on and so forth. We need a certain amount of renovation.
So both from a commercial activity as well as from a household activity, both in new construction and repair and renovation, we are seeing certain tailwind, and that's probably why the home improvement sector is still fairly sanguine about demand conditions. And let's see how that turns out in the next 6 months.
Okay, okay. And just 2 subsidiaries, Nina and Percept, they used to be a separate subsidiary, so we saw some slowdown as well as we chose the -- it's achieving some of our business to be more conservative. So are we seeing a pickup there also in terms of B2B application business of waterproofing?
Actually, the B2B business of waterproofing is picked up -- has come back very strongly because, here, there is a lot of investment happening both in corporate, whether it is offices, manufacturing, factories and, of course, government infrastructure. So actually, the Nina Percept business is -- the whole actually large user business is coming back very strongly in the waterproofing segment.
Okay. And sir, lastly, in terms of -- I mean, without naming, but will they have both of our categories has -- as well as waterproofing, where over the last years are entering or have entered in last 2 years. When -- now raw material market is in our favor. Any upside care beyond which we would not like to go in terms of EBITDA or gross margin and would like to go for growth? So any cap or any, say, broad guidance on the profitability?
See, we've always maintained that we would like to focus on profitable volume growth. We've always indicated that we are comfortable with margins in a certain range, which is the 20% to 24% range, and because that we believe reflects the right price equity for our brands. That's where we intend to remain.
As far as competition is concerned, obviously, we are no strangers to competition. With the kind of market share we have, we will have new competitors pretty much every quarter, and that has been happening now for at least the last 10 years.
[Operator Instructions] Our next question is from Rajesh Gajra of Informist.
Mr. Puri, I just wanted to ask you that your B2B sales and profit, they were down year-on-year in the December quarter. So just wanted to ask how is it going in the current quarter so far in the first 25 days of this quarter as compared to the December quarter.
See, as far as B2B sales is concerned, just let me give you a background, Rajesh. Basically, there are 2 aspects to the business. Wherever there is strong domestic business, like, for example, waterproofing, their demand conditions are strong, and the business is doing very well.
Where the business is suffering is really wherever we have exports, especially to the Western Hemisphere. And where our customers have exports, whether it be leather, whether it be textiles, the largest impacted of this is pigments, where our pigment exports have been substantially hit.
And if you look at all the other pigment companies, you will see the extent of the problem. Frankly, in the first 15 days or 20 days of January are no different from December, at least for the international export-oriented businesses. The rest of the domestic businesses are normal.
[Operator Instructions] Our next question is from Sheela Rathi of Morgan Stanley.
Mr. Puri, sir, you talked about the market share trends, and you said that competition has always been there in this space, and you are the leader there. But just one question I had here was that have you seen a resurgence of smaller and regional players in the last one quarter?
Because inflation has eased and all the supply chain-related issues are behind us. So is there a higher competitive intensity, which has picked up? And not in general for your sector, but, in general, across the space, do you see that as the scene playing out?
Thank you, Sheela. Always a pleasure to hear from you. I think your observation is an astute one. We haven't seen that in the third quarter, but we are seeing signs of that beginning because, obviously, a lot of the small regional players who had suffered greatly because of this raw material inflation situation now are finding the situation a lot more to their liking. The way I would answer that is in the next 3 to 6 months, we definitely expect a lot more increased competition from them. And obviously, we are prepared for it.
And then how should we think of margins going ahead? Because things are in favor. But at the same time, we will see competition.
See, that's why, a lot of times, a lot of analysts keep asking us the question as to why don't we take our -- we've had quarters where our margin is -- when raw materials have been benign, has gone up to 27%, 28%. And we've always said that we prioritize volume growth and market share over a greater margin.
We believe this margin range allows us the right price to equity relationship for our -- and it also keeps competition at bay. So that's where we will remain.
But sir, would you like to give any sense on how the margins could play out by the end of the year?
Very difficult to see. As we consume all of the higher-priced inventory, the margins will steadily go up. I would suggest that the best margins will be the exit March margin, and quarter 1 will follow. So I mean, I think we'll be at fairly abnormal range during that time. I know, Sandeep, you want to add some more.
No, no. I think, absolutely. I think we will see, as I said earlier, margins improving throughout the first quarter, and we would certainly look to hit the range by the time we exit March.
Understood. Just one more question. I joined the call a little late. I'm not sure whether this was addressed. But sir, you had talked about the CapEx plans last year. If you could give us some update in terms of where we are and also on the distribution side in terms of how much distribution we have added in the last 3 months.
Okay. So as far as the CapEx is concerned, as we've always been maintained at Pidilite, we are prepared for the next phase of growth. In the course of the last 24 months, we've expanded and completed expansion of 7 of our brownfield factories, and we've completed 5 new greenfield factories. There are another 6 brownfield expansions currently going on, and there are new greenfield factories in progress. All of these will be complete in the next financial year. So that's as far as CapEx is concerned.
As far as sales and distribution is concerned, at Pidilite, we've always been clear that sales and distribution is a very strong driver of growth. In the first 9 months of this year, we've actually added 2,000 -- a little over 2,100 towns, which actually are villages with a population of between 5,000 and 10,000 to our direct distribution reach. We actually now cover about 32,000 town stroke villages directly.
So that process is an ongoing process. We now have 7,000 Pidilite Ki Duniya, which are the small retail stores in villages between 5,000 and 10,000. Our dealer app, which is the Pidilite Genie app, now pretty much gets 10% of -- which 10% of our sales is coming via the app. It doesn't need a salesman or a distributor to call. It's directly via the app.
So we've got a whole set of initiatives, which is around sales and distribution expansion, both quality and width and depth. We've got a set of initiatives around resilient supply chain in terms of both factories and warehouses. We've got a whole initiative around digitization, which includes whether it is e-com, whether it is analytics and whether it's our internal digital programs. And obviously, we've got a whole program around innovation.
We've introduced a whole range of new products across all of our major divisions, we call as the new premium variant called [ HyperStar ]. In the waterproofing business, we've introduced a new economy waterproofing solution for exteriors called Raincoat [indiscernible]. We're doing very well in the roof actually coating segment with a brand called Roofseal. In our consumer maintenance businesses, we launched a business -- we've launched this product called Homefix, which we're testing in Kerala, which is a substitute for nails. You don't need nails.
Like this, I mean, we can take you through a whole round of innovation where, pretty much, every quarter, you will see 1 major and 2 minor innovations from our divisions in Pidilite for the next 12 to 18 months.
[Operator Instructions] Next question is from Shashank Krishnakumar of Macquarie Capital.
So you called out that you saw an improvement in November and December over October. So can you just comment on how the demand trends in the Consumer and Bazaar segment are doing in these few weeks of January?
They've continued on the growth. I mean, we've seen the same trend continue, Shashank, in January.
Okay, okay. And the second question on innovation. Can you just talk about the contribution from new products in the first 9 months?
See, we have a very simple objective at Pidilite that 1/3 of our growth should come out of innovation. Plus/minus, 10% we keep focusing there.
[Operator Instructions] Our next question is a follow-up for [indiscernible]
Referring to Slide #15, this is related to [indiscernible]. Sir, where do you reflect [indiscernible] in this industry segment composition? That is my first question.
And second question is, when you acquired [indiscernible] brand, we have not recorded the projected revenue. So when we look at the first 3 quarters performance of [indiscernible], are we on track with reference to assume the revenue that we expected out of [indiscernible] acquisition?
So I'll let Sandeep to answer the question -- the first part of the question. On the second part, Purushottam, we are absolutely -- in fact, we are beating our acquisition case on Araldite from a revenue and a profitability base.
I mean if you -- when it was reported as a standalone business, you can look at the kind of growth rates that we had. I mean, Huntsman's grow is an average of 6% to 8%. Obviously, we've grown it at a much better rate.
And -- yes, and your question on how we report Araldite, we report it as part of the Consumer and Bazaar segment. Because the company has got merged with Pidilite from April 1, 2022, so we are showing Araldite sales and EBITDA as part of the Consumer and Bazaar segment. And also the comparisons to make the previous year data comparable of whatever the Araldite sales were in the same period last year have also been added, so that the numbers are comparable.
[Operator Instructions] It would appear that we have no further questions. I would like to hand the call back to management for some closing comments.
No closing comments. Just thank you to all of you for your continued interest in Pidilite, and all of you have a great evening. Thank you.
Thank you, everybody.
Ladies and gentlemen, on behalf of Pidilite Industries Limited, this concludes this conference. Thank you for joining us, and you may now disconnect your lines.