Sharekhan's research report on Pidilite Industries
Pidilite Industries Limited (PIL) reported a mixed performance in Q1FY2022 with revenue beating expectation at Rs. 1,936.8 crore, while OPM slightly missed estimates at 17.9%, affected by higher input inflation; PAT stood at Rs. 217.6 crore. Domestic organic volume growth stood at 103% (on low base of 59% volume decline in Q1FY2021); Araldite contributed Rs. 70 crore to the topline; international subsidiaries registered double-digit growth. Strong demand arising from recovery in construction and home improvement activities will drive double-digit revenue growth in the quarters ahead. Raw-material inflation is expected to sustain in Q2 but will cool-off from H2FY2022.
Outlook
PIL’s dominance in the construction chemical and adhesive space and strong balance sheet make it a better play in the building material space. We retain our Buy rating on the stock with a revised PT of Rs. 2,525.
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