Incorporated in 1959, Pidilite Industries Ltd. is a pioneer in consumer and speciality chemicals in India, with a diversified product portfolio including adhesives and sealants, construction chemicals, hobby colours and polymer emulsions, among others.
Valuation and view
With strong brand recall, superior pricing power and distribution reach, we believe Pidilite is a strong play in the recovery in discretionary spending. Further, subdued crude and VAM prices will be margin accretive going ahead. We expect revenue and PAT to grow at a CAGR of 11% and 30% over FY15-FY17E. We initiate coverage on the stock with a BUY rating with a target price of Rs. 646 (FY17E P/E of 38x), implies a potential upside of 13% for the coming 12 months.
Research Report Pidilite Industries Ltd
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