Hold Pidilite Industries: target of Rs 3155: Sharekhan

Sharekhan's research report on Pidilite Industries

Pidilite Industries’ (Pidilite’s) Q3FY25 performance was good with domestic revenue rising 9.3% y-o-y driven by a 9.7% volume growth. Consolidated EBITDA margin stood flat y-o-y at 23.7%. Management expects demand to stay soft in the near term. It has maintained guidance of delivering profitable double-digit volume growth in the long term led by sustained focus on brand building, distribution expansion, enhanced supply chain network and innovation. VAM prices were benign at $884 per tonne in Q3 and are expected to remain stable in the short term. EBITDA margin guidance maintained at 20-24% for the long term.

Outlook

Stock trades at 71x/61x/55x FY25E/FY26E/FY27E EPS, respectively. With an unfavourable risk-reward ratio, we maintain our Hold rating on the stock with a revised PT of Rs. 3,155.