The brokerage wrote in its note that Pidilite
is focused on addressing white spaces and has two senior people at the CXO level apart from a dedicated team. The brokerage believes the recent appointments of Sudhanshu Vats as Managing Director (MD) and Kavinder Singh as Joint MD will bring strong leadership.
Key growth drivers include-
Core business: The ratio of Growth to Pioneer segments now stands at 52:48.Tile Adhesives: In India, there is a huge growth potential, as only 25% of tile installations currently use adhesives.
Waterproofing: Strong expansion opportunities exist, with 50% of demand coming from new construction, where penetration remains low at 15%.
Emerging Markets: Pidilite is strengthening its presence in Africa and scaling up in Saudi Arabia.
On the flip side, Citi has a ‘Sell’ recommendation on Pidilite, with a price target of ₹
2,800 per share.
Citi said the company, in its analyst meet, mentioned that near-term demand environment could have some instability but in the medium term, it would like to deliver double-digit UVG (Underlying Volume Growth).
The brokerage said that inorganic opportunities should be value accretive and drive synergies.
Other key highlights from Citi’s report include-
– Top management incentives are linked to UVG and margins.
– Fevicol, a flagship brand, has consistently delivered near double-digit UVG and is expected to sustain this trend.
– Premiumisation and innovation are key to drive overall growth.
The Pidilite Industries stock is trading at 57x and 50x the estimated earnings per share for FY26 and FY27, respectively.
Shares of Pidilite Industries Ltd. are currently trading 0.76% higher on Wednesday at ₹2,749.95. The stock is down 4% so far this year.
