Please refer to important disclosures at the end of this report
Pidilite Industries Ltd (PIL) is a dominant play in India’s adhesive market with a
market share of ~70% in its leading brand categories (Fevicol) in the organised
segment. Despite the near-term concern pertaining to the input prices, Pidilite
enjoys strong pricing power across all its flagship brands. The company’s two
major segments, consumer & bazaar (C&B) (product includes: Fevicol & M-seal)
and speciality industrial chemical recorded sales CAGR of ~19% and ~9%
(standalone), respectively, in FY11-17. The C&B segment growth came on the
back of demand from the construction, repair & maintenance activities. Higher
disposable income (due to Seventh Pay Commission) & implementation GST
would help to boost the volume of adhesives segments in terms of higher
expenditure towards house decor and reduction of tax arbitrage for the
unorganised segment. Going forward, the management focus is on developing
new products as per client needs and strengthening the product basket of
specialty chemical; and also to work with some of the best companies in the
world in the fields of plastic, ink, paint and other segments to provide big push to
overall sales across the segments According to the management, guidance for
the capex would be around `150Cr during the year. PIL has reported revenue
and bottom line growth of 12% & 22% respectively over FY2012-17 and also
operating margins has improved from 16.45% in 2012 to 23.89% in FY17.It is a
virtually a debt free company and also the cash flows has also improved from
`367.02cr in FY12 to `793.75cr in FY17. The company has a ROE of 21.25%
TTM earnings and has been maintaining a healthy dividend payout of 29.50%
since 2012.Hence BUY.
CMP `850
52 Week High / Low
Avg. Daily Volume
Speciality Chemical
Market Cap (` cr)
BSE Sensex
Face Value (`)
Reuters Code
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Pidilite Industries Ltd
Others | Specialty Chemicals
Nov 29, 2017
Pidilite Industries Ltd |Specialty Chemicals
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Pidilite Industries
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)