Accumulate Pidilite Industries; target of Rs 1175: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Pidilite Industries

We are increasing FY19 and FY20 standalone EPS estimates by 6.2-10% following improved demand outlook and 22-25% margin band guidance (21-23% earlier). PIDI is well placed to capitalise on the growth opportunity in adhesive and sealants given strong brand like Fevicol under its belt. Long term outlook looks robust as emerging businesses like Nina, Percept (waterproofing services), ICA (wood coatings), Dr Fixit (waterproofing), Roff (tiling solutions) and CIPY JV's (floor coatings) will emerge as key growth drivers in coming years. Rising VAM, packaging and depreciating rupee is near term concern, however strong pricing power will enable the company sustain margins.

Outlook

We estimate 14.6% sales and 16.3% PAT CAGR over FY18-20 on flattish EBIDTA margins. We value the stock at 43xSept20 EPS and arrive at 18 month SOTP based target price of Rs1175 (Rs957 earlier). Retain Accumulate.

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