Neutral Pidilite Industries; target of Rs 1500: Motilal Oswal

Motilal Oswal's research report on Pidilite Industries

Pidilite Industries (PIDI) reported consolidated revenue growth of 10% YoY (in line) in 2QFY26. Standalone revenue grew 10% YoY, with underlying volume growth (UVG) of 10% (est. 7%). Value/volume growth stood at 11%/10% YoY in the consumer business and 9%/10% in the B2B business. The company has not implemented any price hike during the quarter. The volume-value gap has now neutralized and is likely to remain stable through 2HFY26. Urban demand improved in 2Q; however, rural demand growth continued to outpace urban demand growth. In FY26E, we model 11% volume growth and 12% revenue growth.

Outlook

PIDI stands out for its market-leading position in the adhesives market, along with a strong brand and a solid balance sheet. However, we believe the current valuation limits the upside potential. As a result, we reiterate our Neutral rating on the stock with a TP of INR1,500 (premised on 50x Sep’27E EPS).