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Pidilite Industries - Company Analysis

Pidilite Industries

Over the years, the Company has made progressive advancements across all three dimensions of sustainability. On the economic front, through an appropriate product mix and a good understanding of customer requirements, the Company has been consistently growing its market presence, revenues, and profitability. On the environment front, initiatives are focused on resource optimization, reduction of waste, energy, and emissions across operations.

The Company has 33 subsidiaries, both direct and indirect, as of 31st March 2020. 13 of these subsidiaries are in India and 20 of them are located abroad.

Markets served by the Company – The Company’s products have a pan India presence and the products are also marketed in several countries like UAE, USA, Nigeria, Bangladesh, Sri Lanka, Nepal, Singapore, China, Indonesia, Thailand, Egypt, Brazil, Bahrain, Qatar, Oman, Myanmar, Ethiopia, Kenya, France, Germany, Italy, Saudi Arabia, Tanzania, Hongkong, UK, Kuwait, Australia, etc. 

Has 6,064 employees as of 31 March 2020


Financial Analysis 

Pidilite Industries operates the business under two major segments

1) Branded Consumer & Bazaar

2) Business to Business

1) Branded Consumer & Bazaar

Under this segment company produces products for  such as Adhesives, Sealants, Art & Craft Materials and Others, Construction and Paint Chemicals segments.

These products are widely used by carpenters, painters, plumbers, mechanics, households, students, offices, etc. 

2) Business to Business (B2B)

This segment covers products, such as Industrial Adhesives, Industrial Resins, Construction Chemicals (Projects), Organic Pigments, Pigment Preparations, etc. and caters to various industries like packaging, joineries, textiles, paints, printing inks, paper, leather, etc.


Pidilite Industries’ major international subsidiaries are in Bangladesh, Sri Lanka, USA, Brazil, Thailand, Egypt, and Dubai. Various initiatives are being taken to increase sales and market share in

Bangladesh and Sri Lanka. The US subsidiary plans to maintain its focus on Retail and E-Commerce. The Brazil subsidiary is taking initiatives for continued growth in sales and margins. The business environment in these countries remains subdued as they all face the ongoing impact of the pandemic and consequent lockdown.

Pidilite Industries sees a large opportunity in the Indian Economy for the company to market its products.

40th Biggest Company in India having Market Capitalisation 75267.05 Cr. (As per 17 October 2020)

Return On Equity

10 Years:27%
5 Years:28%
3 Years:26%
Last Year:27%

Average return 27%

Pidilite has Presence in 71+ Countries

8+ Manufacturing Units

Company Financials

Quarterly Results

Annual Results


  • On seeing the Annual Results of Pidilite Industries of past 10 years we see that the company has never seen a drop (Excluding: TTM [Trailing twelve months]). 
  • The company's revenue grew from ₹1986cr. in March 2009 to ₹7294 in March 2020. 
  • The company's revenue is compounding at an average rate of 13% from the last 10 years. 
  • Debt To Equity is negligible (0.6). For FY 20 Company has a positive cash flow of ₹533 Cr. The company generated ₹134.6 for every ₹100 invested in the company. 
  • The company's Profit grew from ₹112 Cr. in March 2009 to ₹1,116 Cr. 
  • The company's profit saw a compounded growth of 16% for the last 10 years. 
  • Margin 15.3% FY 19 Margin 13 % FY 20

Valuation Analysis


The company's stock is trading at a P/E of 85.2. Usually company's like Pidilite Industries, Avenue Supermarkets(D-Mart), Piramal Enterprises, Mahindra & Mahindra, etc trade at high P/E as they always gain investor's attention.
The company has investments worth ₹1,160.89 cr.
The company has a track record of paying dividends to its investors. The company mostly pays dividends to its investors almost every year. The dividend yield is 0.47% at the current price.
The company is currently trading at a high P/E and it is possible that it can still trade at a high P/E. So, Every Drop in Pidilite Industries can be a Buy opportunity.
 

Business And Industry


Adhesives And Sealants Market in india can grow with a CAGR of 7% from 2020 to 2025.
Pidilite Industry has products in such a segment where an amazing growth has already been seen and there is more scope of growth in this segment.
As Construction demand in India is going to boost it's sales. As it is predicted that India can become third largest construction market by 2025. Construction Market is growing at an average of 7% each year.
Rather than construction Adhesives And Sealants Market can also see growth in other segments as adhesives are also used by common people and increasing population can also support it's demand.
Pidilite Ind. being the market leader in India it sees amazing opportunity in India. It constantly releases new products which can be made available almost at all the places in India as it has a strong network or supply chain india.
Pidilite Ind.'s Fevicol has a strong brand name which always seems to help Pidilite Ind.
Market Share is Fevicol 70%.

Management Analysis


Chairman Pidilite Industries Madhukar Balvantray Parekh (M.B. Parekh), under his leadership Pidilite converted an ‘unexciting’ product into one of the country’s top brands – 'Fevicol', ‘Fevikwik’, ‘Dr. Fixit’ and ‘M-seal’ are market leaders with high shares in their respective segments.
He has been in the company since four decades (40 years). 

Following Are the Management


        Shri. M. B. Parekh 
        Executive Chairman

        Shri. Bharat Puri 
        Managing Director 

        Shri. N. K. Parekh 
        Vice Chairman 

        Shri. Bansi S. Mehta 
        Independent Director 

        Shri. Sanjeev Aga 
        Independent Director 

        Shri. Uday Chander Khanna 
        Independent Director 

        Smt. Meera Shankar 
        Independent Director 

        Shri. A. B. Parekh 
        Whole - Time Director 

        Shri. Vinod Kumar Dasari 
        Independent Director 

        Shri. A. N. Parekh 
        Whole - Time Director 

        Shri. Debabrata Gupta 
        Whole - Time Director 

        Shri. Piyush Pandey 
        Independent Director 

        Shri. Rajeev Vasudeva 
        Independent Director

      • I see no negative thing about the management till now.
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