Recent Financial Performance (Q4 FY25)
·
Revenue Growth: 10.2% YoY to
₹3,141 Cr, driven by robust Underlying Volume Growth (UVG) of 9.8%.
·
Segment Performance:
·
Consumer & Bazaar
(C&B): UVG of 8.0% (sequential improvement).
·
Business-to-Business (B2B): UVG of 16.4% (7th
consecutive quarter of mid-teens growth).
·
Margins:
·
Gross margins improved 154 bps YoY (benign input costs).
·
EBITDA margins stable at 20.6%, within guided 20–24% band.
·
Profitability: PAT surged 41%
YoY to ₹427 Cr, aided by lower exceptional losses.
Strategic
Growth Pillars
1.
Portfolio Segmentation:
·
Core (Fevicol, Fevikwik): Targets 1–2x GDP
growth via innovation (200+ SKUs; 2–3 new products/year).
·
Growth (Dr. Fixit, Roff): Targets 2–4x GDP
growth; waterproofing segment underpenetrated.
·
Pioneer (Haisha Paints,
Araldite): Aims for ₹1,000 Cr sales within 3 years of launch.
·
Goal: 50:50 revenue
split between Core and Growth categories (vs. 80:20 a decade ago).
2.
Market Expansion:
·
B2B (17% of revenue): Industrial
adhesives, resins, and construction chemicals; expected mid-teens growth.
·
Geographical Reach: "Pidilite Ki
Duniya" stores (16,000+ outlets), SAARC, SEA, Middle East, Africa.
·
Digital: "Pidilite
Genie" drives 35% of C&B sales; e-commerce up 21x in 5 years.
3.
Sustainability &
Innovation:
·
R&D Focus: Eco-friendly
products (₹140 Cr invested in FY23).
·
2030 Targets: 30% carbon
footprint reduction, 80% renewable energy mix, zero waste to landfill.
Investment Thesis
Bull Case
·
Growth Visibility: Double-digit UVG
sustainable via rural recovery, urban infrastructure push, and B2B demand.
·
Margin Resilience: Raw material
tailwinds and operational efficiency protect 20–24% EBITDA band.
·
Dividend Growth: FY25 dividend
increased to ₹20/share (from ₹16 in FY24).
·
Analyst Targets: Nuvama sees 33%
upside (target: ₹3,660) .
Key
Risks
·
Valuation: P/E of 74.1 (TTM) vs. sector avg. ~55; high premium limits
near-term upside.
·
Competition: Entry of global
players in adhesives/waterproofing.
·
Demand Volatility: Rural consumption
slowdown and global economic uncertainty.
Recommendation
·
Rating: HOLD (for
existing investors) / BUY on Dips (below
₹2,800 for new investors).
·
Catalysts to Watch:
·
H2 FY26 demand pickup (government infra projects, monsoon).
·
Margin expansion from input cost stability.
·
Successful scaling of Haisha Paints.
·
Portfolio Allocation:
·
Aggressive Investors: 3–5% of
portfolio.
·
Conservative Investors: Await correction
to ₹2,700–2,800 for entry.
|
Metric |
Current Status |
Investment Implication |
|
Revenue Growth |
10.2% (Q4 FY25) |
Strong volume-led expansion |
|
Margins |
20.6% EBITDA |
Resilient within guided band |
|
Valuation |
P/E 74.1, P/B 15.75 |
Premium priced; wait for correction |
|
Dividend |
₹20/share (FY25) |
Consistent shareholder returns |
|
Growth Catalysts |
B2B, Haisha Paints, digital |
Long-term structural upside |
Final View:
Pidilite is a high-quality play on India’s consumption and construction growth,
but current valuations demand patience. Accumulate on dips (10–15% correction)
for 2–3 year horizon. Monitor Q1 FY26 results (July 2025) for UVG/margin
trends.
