Buy Pidilite Industries on dips, says Parag Thakkar

Parag Thakkar of HDFC Securities told CNBC-TV18, "In fast moving consumer goods (FMCG) pack, Pidilite Industries is our best idea because the real estate slowdown is causing volume concerns but the margins are on the upswing because of lower commodity prices and as a company they are taking many steps and they are an innovative company. They are taking innovative steps to increase their penetration across the products. Right now the largest segment is real estate and export, both are going through little bit of slowdown. So this is a good time to buy it on dips.""However, going on to goods and services tax (GST) theme, something like shoes, plywood and tiles will be major beneficiaries. Tiles has got another big benefit in the form of falling gas prices. Gas is a major raw material for them and if RasGas deal works out at lower price then the tiles companies will get gas at a lower price. Also the GST benefit in the form of unbranded competition going away. Of course we do not have coverage on this space but theoretically it looks good on GST side," he added."Our target price is around Rs 330 on Oberoi Realty and that is net asset value (NAV) based target and 1/3rd of that NAV based target comes from valuation of rental business. So they will have around Rs 250 crore rental assets within one year from now. It's a debt free company and they are more fair and transparent in way of doing business and also they have clean balance sheet and net debt to equity is nothing. The recent launches in Borivli and Mulund, they have sold around 16 lakh square feet at an average of around Rs 13,000-14,000, so Rs 2,000 crore worth of sales.""So FY'18 onwards the numbers will look good on the EBITDA front also and these are very high EBITDA margin business, 50-60 percent and of course I would not rule out that due to concerns around real estate prices, the stock might underperform for one or two quarters but if you look at from two year perspective, it will offer great upside."