Prabhudas Lilladher's research report on Pidilite Industries
PIDI has posted a resilient quarter with 9.6% UVG and 20.5% PAT growth enabled by 180bps margin expansion. Growth was broadbased across B2C and B2B segments in standalone and domestic subs. IBD reported improved profitability due to exit from loss making Americas business. Growth outlook remains strong given double-digit growth in rural India, expected uptick in demand in festival season post normal monsoons and strong tailwinds from both residential and commercial Real estate. We believe margins have limited scope to increase given that GM is already above 53%. PIDI remains a potent play on real estate cycle and new construction aids given deep distribution and sustained innovations.
Outlook
We estimate 18.5% EPS CAGR over FY24-26 and assign DCF based target price of Rs3383 (Rs3141 earlier) which assumes a target valuation multiple of 64x SeptFY26. Retain Accumulate for LT gains post 30% returns in past 3 quarters.
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