Mehabe score: 5 G Factor: 4 Piotski Score: 5 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 5.
Description
Pidilite Industries Limited is a leading manufacturer of adhesives and sealants, construction chemicals, craftsmen products, DIY products and polymer emulsions in India. Most of the products have been developed through strong in-house R&D. Our brand name Fevicol has become synonymous with adhesives to millions in India and is ranked amongst the most trusted brands in the country. Some of our other major brands are M-Seal, Fevikwik, Fevistik, Roff, Dr. Fixit, Fevicryl, Motomax, Hobby Ideas, Araldite.
Main Points
Revenue Breakup
Company earns about 52.5% of its revenues from adhesives & sealants category, followed by Construction & paint chemicals (19%), art& craft materials (8%), industrial adhesives (6%), pigment & preparation (6.2%) & industrial resins & construction chemicals (6%). In total,
It has its business divided into 2 divisions, consumer & bazaar products which accounts for 80% of revenues, and B2B products segment which accounts for 19% of revenuesSite:PIDILITINDMain Symbol:PIDILITIND
Stock trades at 2244.0, above its 50dma 2103.64. It also trades above its 200dma 1833.25. The stock remains bullish on techicals
The 52 week high is at 2302.00 and the 52week low is at 1306.95
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 24.45%
– has been maintaining a healthy dividend payout of 35.25%
Weakness
– Stock is trading at 20.39 times its book value
-The company has delivered a poor sales growth of 6.35% over past five years.
Competition
– The industry trades at a mean P/E of 29.9x. Pidilite Inds. trades at the industry’s max P/E of 100.81x. PIDILITIND trades at a P/E of 101.0x
– Industry’s mean G-Factor is 3.7 while the mean Piotski score is 8.0. PIDILITIND has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is 6.5%. The max 1- month return was given by Navin Fluo.Intl.: a return of 15.81 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 2236.0 cr compared to Rs 1545.0 cr for period ended Mar 2020, a rise of 44.7%
Operating Profits reported at Rs 461.0 cr for period ended Mar 2021 vis-vis 301.0 for period ended Mar 2020 .
Operating Margins expanded 113.5 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 6.03 compared to Rs 8.69 for previous quarter ended Dec 2020 and Rs 3.1 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 7293.0 cr for period ended Mar 2021 vis-vis sales of Rs 7294.0 cr for the period ended Mar 2020, a fall of 0.0%. The 3 year sales cagr stood at 6.3%.
Operating margins expanded to 23.0% for period ended Mar 2021 vis-vis 22.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 1131.0 cr for period ended Mar 2021 vis-vis sales of Rs 1116.0 cr for the period ended Mar 2020, rising 1.3%.
Company recorded a Net Profit CAGR of 5.5% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 1392.0 cr for period ended Mar 2021 vis-vis Rs 1280.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 23.0% compared to 24.0% over the last 3 Years. – The stock has given a return of 62% on a 1 Year basis vis-vis a return of 28% over the last 3 Years. – The compounded sales growth on a TTM bassis is -0% vis-vis a compounded sales growth of 6% over the last 3 Years. – The compounded profit growth on a TTM basis is -2% vis-vis a compounded profit growth of 6% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 11.88% vis-vis 11.39% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 10.37% vis-vis 10.18% for Dec 2020
Conclusion
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 24.45%
– has been maintaining a healthy dividend payout of 35.25% – Stock is trading at 20.39 times its book value
-The company has delivered a poor sales growth of 6.35% over past five years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 2103.64 and is trading at 2244.0, thus bullish price action wise.
