Prabhudas Lilladher's research report on Pidilite Industries
PIDI has posted a resilient quarter amid otherwise tepid demand environment with 8% UVG and 17.5% PAT growth. B2B continued its growth momentum driven by Industrial & Project verticals whereas B2C faced setback owing to rains & mild slowdown in urban markets. IBD reported improved profitability due to exit from loss making Americas business. Growth outlook remains cautious given monsoon & food inflation. PIDI will continue to benefit from the tailwinds from both residential and commercial Real estate (70% repairs & 30% new construction in sales). PIDI is well placed given continuous innovations, tieups to bring technologically advanced products and 2-3x growth in pioneer and growth categories (45% of sales). Near term margin outlook is positive given benign input costs.
Outlook
We estimate 14.7% EPS CAGR over FY24-27 and assign DCF based target price of Rs3339 (Rs3454 earlier) which assumes a target valuation multiple of 62xFY27. Retain Accumulate.
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