Buy Pidilite Industries; target of Rs 160: Bonanza

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Buy Pidilite Industries; target of Rs 160: Bonanza

Bonanza is bullish on Pidilite Industries and has recommended buy rating on the stock with a target of Rs 160 in its September 9, 2010 research report.

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Bonanza is bullish on Pidilite Industries and has recommended buy rating on the stock with a target of Rs 160 in its September 9, 2010 research report.

"Pidilite Industries (PIL) reported strong Q1FY11 results improving its margins significantly on q-o-q basis. The overseas subsidiaries are in their initial period of business and have incurred small losses. Going forward once its Dahej project gets operational it can add to PIL's revenue & profits. During Q1FY11 PIL has a cash profit of Rs 117 crore which recorded a 22% growth from Q1FY10. In FY10 PIL has given total dividend of Rs 1.50 per share including a special dividend of Rs 0.50 per share."

"PIL reported impressive results in Q1FY11 by registering a 26% y-o-y growth in net profit, while on q-o-q it posted a 93% growth. Top line of PIL grew by 22% y-o-y in Q1FY11 to Rs 626 crore. We have revised our estimates on the basis of its Q1FY11 results and expect better margins for FY11E. At CMP Rs 145 the company is trading at a forward earning multiple of 21.2xof FY11E. Long term investor can buy at this counter for a target of Rs 160 in medium term," says Bonanza research report.

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To read the full report click on the attachment