Buy Pidilite Ind; target of Rs 261: Firstcall Research

Firstcall Research is bullish on Pidilite Industries and has recommended buy rating on the stock with a target of Rs 261 in its January 30, 2013 research report.
 
“Pidilite Industries, a well known name in adhesives market, was incorporated in 1969. The company has diversified in various segments such as adhesives and sealants, construction and paint chemicals, automotive chemicals, art materials, industrial adhesives, industrial and textile resins and organic pigments and preparations. It has created brands like Fevicol, Dr Fixit, Cyclo, hobby ideas, Roff and M-Seal. Pidilite Industries has established offices / subsidiaries in several countries including Singapore, USA, Brazil, UAE, Saudi Arabia, Indonesia, Egypt, Bangladesh, UK, Kenya, South Africa and Ghana. In India it has subsidiaries namely Bhimad Commercial Company and Madhumala Traders. Pidilite also established a state-of-the-art research centre in Singapore that is now a member of Singapore Chemical Industry Council (SCIC).”
 
“Pidilite Industries Ltd is diversified in various segments such as adhesives & sealants, construction & paint chemicals, automotive chemicals, industrial adhesives, textile resins, organic pigments., reported its financial results for the quarter ended 31st Dec, 2012. The third quarter witnesses a healthy increase in overall sales as well as profitability of the company. The company’s net profit jumps to Rs.1189.90 million against Rs.786.30 million in the corresponding quarter ending of previous year, an increase of 51.33%. Revenue for the quarter increase 20.22% to Rs.9317.90 million from Rs.7750.90 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.2.32 a share during the quarter, registering 49.53% increase over previous year period. Profit before interest, depreciation and tax is Rs.1683.20 millions as against Rs.1339.10 millions in the corresponding period of the previous year.”
 
“At the current market price of Rs.231.00, the stock P/E ratio is at 26.41 x FY13E and 21.92 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.8.75 and Rs.10.54 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 20% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 16.71 x for FY13E and 14.13 x for FY14E. Price to Book Value of the stock is expected to be at 7.37 x and 6.17 x respectively for FY13E and FY14E. We recommend ‘BUY’ in this particular scrip with a target price of Rs 261 for medium to long term investment,” says Firstcall Research report.

Institutional holding more than 40% in Indian cos

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