Motilal Oswal's research report on Pidilite Industries
Pidilite Industries (PIDI) hosted an analyst day to highlight its business moats and growth across categories. Company is market leader in adhesives and sealants with ~70% share in Fevicol and M-Seal and has structured its portfolio into Core, Growth, and Pioneer segments to drive strategic expansion. The Core segment (1-2x GDP growth) focuses on premiumization and innovation, while the Growth segment (2-4x GDP growth) scales highpotential categories such as Dr. Fixit and Roff. The Pioneer segment, featuring brands like Unofin and Haisha, aims for INR1b revenue within three years of launch. A decade ago, 80% of PIDI’s revenue came from core categories like adhesives. Now, core categories contribute 52%, with growth categories contribution at 48%. The company aims to sustain a balanced 50:50 mix, ensuring diversified growth and a future-ready business model.
Outlook
We model a revenue and EBITDA CAGR of 13% and 14%, respectively, over FY25-27E. On rich valuation, we reiterate our Neutral rating on the stock with a TP of INR2950, premised on 55x Mar’27E EPS.
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