Pidilite Industries Ltd. share price target

Consolidated revenue grew by 4.1% y-o-y to Rs. 1,880.3 crore (driven by a sales and volume mix of 3.6%), ahead of our expectation of Rs. 1,842.9 crore. The consumer bazaar business registered volume and mix growth of 7.2%, while B2B (largely industrial products) business declined by 8.4% in Q2FY2021 (but recovered from 53% decline in Q1). Improved growth in the consumer business is attributable to double-digit growth in the rural markets and tier-IV towns. Globally, the American region registered a strong growth of ~52% in revenues and EBIDTA margins improved to 26% (excluding one-time tax gain of Rs. 9.5 crore). Benign input prices (largely those of VAM) aided in gross margins to remain high by 256 bps to 55.9%....

The company targets ~INR1b revenue or higher for the Pioneer categories over the next The Core business (Fevicol and sub-brands Fevikwik, M-Seal, and Fevicryl) is likely to grow at 12x GDP. This means that and Bazaar (C&B;) and B2B products over the next three to four years, by the end of which the Growth and Pioneer categories are likely to comprise around half of sales. The companys clutter-breaking marketing is also Compared with the erstwhile approach of focusing on a multitude of geographies, including the US and Brazil, in recent years, the company has decided to focus on certain emerging markets with high growth potential and where an India-like All the Pioneer category brands are in the nascent categories; thus, the company is trying to grow the categories using innovation and technology and by leveraging on R&D; is gaining increasing importance, with a nearly 2.5x increase seen in R&D; spends over the past five years.

Sharp decline in Q1 revenue amid lockdown Consolidated revenue fell ~56% YoY to ~| 878 crore in Q1FY21 due to sales loss for almost 40 days in domestic operations amid lockdown. The standalone revenue fell ~57% YoY led by ~58% decline in volume mix. Overseas subsidiaries recorded revenue de-growth of ~36% YoY led by revenue decline of ~49%, ~30% and ~25% YoY in Asia, Middle East and America regions, respectively. Further, domestic subsidiaries also recorded a sharp revenue fall of 82% YoY led by sharp fall in volume. Post relaxation...

While the structural investment case remains intact, the recent earnings track record, lower ROCEs (in the mid-20 levels) v/s consumer peers, and valuations of 54x FY22 do not leave much room for us to turn constructive from a one- Overall gross margins expanded 210bp YoY to 53.5%. Revenue from domestic subsidiaries declined 82.2% YoY to INR295m in 1QFY21; EBITDA stood at INR308m v/s INR176m in 1QFY20. The management expects this to continue in the near term, with the caveat that these low levels are unlikely to sustain as the demand Improvement in the demand scenario is likely to lead to positive topline and FY2022 is likely to be muted. While the structural investment case remains intact, the recent earnings track record, lower ROCEs (in the mid-20 levels) v/s consumer peers, and valuations of 54x FY22 do not leave much room for us to turn constructive from a one-year with TP of INR1,335 (50x Jun22 EPS).

like 1) waterproofing 2) construction chemicals and aids 3) Wood coatings and 4) Floor coatings etc. we believe investment in Papperfry and Tenex India Stone Products will open further growth opportunities in its core categories. We would watch out for trends in Gross margins in FY22/23 as Pidilite had retained 500bps gross margin expansion during previous low raw material cycle. We estimate 1.2% decline in FY21 EPS and 19.1% PAT CAGR over FY21-23. We value the stock at Rs1415 based on SOTP (45x Sep-22 to...

Revenue loss of | 150 crore due to lockdown Consolidated revenue declined 6% YoY to | 1547 crore mainly due lockdown in March 2020. Pidilite lost revenue of ~| 150 crore due to lockdown. Standalone revenue posted growth of 9.6% YoY till March 21, 2020. However, the lockdown situation eroded growth, which led to 4% YoY de-growth in revenue for Q4FY20. Post relaxation of lockdown, suburban and rural India saw a faster recovery in demand but volume offtake is still...

Pidilite Industries' (PIDI) consolidated Q4FY20 revenue declined 6% YoY as volumes slipped 3% in the domestic consumer & bazaar (CBP) segment.

Our interaction with managements and dealers indicates significant prebuying activity of consumer goods during January-February 2020 on fears of supply related issues from China. While companies have secured supplies to avoid any disturbance in sales in Q4FY20, demand was negatively impacted in March 2020 owing to holiday and post that lockdown across countries. We also believe a late recovery in demand for consumer goods will also impact Q1FY21 performance due to 1) shortage of workers (due to heavy migration), 2) shift in focus on essential goods compared to discretionary products and 3) streamlining of supply chain....

Input costs ease; Demand still remains weak Pidilite is a leading manufacturer of adhesives in India. It owns the flagship Fevicol brand. In FY19, Pidilite derived ~84% & ~16% of its turnover from...