Pidilite: Sticking to core - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Pidilite: Sticking to core

Apr 1, 2002

Adhesives and sealants major, Pidilite Industries, continues on its growth path. For the December quarter ended 2001, the company logged in a 20% growth in net profits. The company's topline improved by 12% during the quarter.

(Rs m) 3QFY01 3QFY02 Change
Net Sales 1,157 1,297 12.1%
Other Income 14 13 -7.9%
Expenditure 912 1,022 12.1%
Operating Profit (EBDIT) 245 275 12.1%
Operating Profit Margin (%) 21.2% 21.2%  
Interest 17 9 -49.7%
Depreciation 41 52 26.8%
Profit before Tax 202 228 12.9%
Tax 56 52 -5.9%
Profit after Tax/(Loss) 146 176 20.1%
Net profit margin (%) 12.6% 13.5%  
No. of Shares 25.2 25.2  
Diluted Earnings per share* 23.2 27.8  
P/E Ratio   6.5  

Pidilite's flagship product ‘Fevicol’ is a generic name for adhesives in India and commands 60% market share. The company is backed by a strong R&D base and has pioneered almost 60% of the products it sells. Therefore, its products command a huge price premium over competing brands. The companies other major brands are 'M-seal', 'FeviKwik' and 'Ranipal'.

Though Pidilite's operating margins have remained stable at over 21% YoY, a lower interest and tax outgo has helped propel net margins. In the consolidated nine month period (April-December 2001) the company has clocked an 8% growth in topline and around 9% growth in net profit.

Cost break-up
(Rs m) 3QFY01 3QFY02 Change
Raw material 443 450 1.6%
Staff 83 93 12.1%
Packing material 128 129 1.1%
Others 258 350 35.6%
Total expenditure 912 1,022 12.1%

Though competition has come in branded adhesives and sealents with 'Parcol' as well the Kitply Group's 'Kitcol', Pidilite has managed its grip on the market through innovative products. The company is also a famed marketer of adhesives. Its ad-campaigns for Fevikwik and Fevicol are top award recipients. However, its entry into the branded fabric whitener through acquisition of 'Ranipal' in FY00 is viewed with skepticism.

At the current price of Rs 179 the company trades at a reasonable P/E of 8x annualised nine month FY02 earnings. In the longer term, it is the company's focus on its branded adhesives business that will stand investors in good stead.

Equitymaster requests your view! Post a comment on "Pidilite: Sticking to core". Click here!


More Views on News

PIDILITE INDUSTRIES Announces Quarterly Results (1QFY21); Net Profit Down 94.8% (Quarterly Result Update)

Aug 18, 2020 | Updated on Aug 18, 2020

For the quarter ended June 2020, PIDILITE INDUSTRIES has posted a net profit of Rs 154 m (down 94.8% YoY). Sales on the other hand came in at Rs 9 bn (down 56.5% YoY). Read on for a complete analysis of PIDILITE INDUSTRIES's quarterly results.

PIDILITE INDUSTRIES Announces Quarterly Results (4QFY20); Net Profit Down 33.6% (Quarterly Result Update)

Jun 19, 2020 | Updated on Jun 19, 2020

For the quarter ended March 2020, PIDILITE INDUSTRIES has posted a net profit of Rs 2 bn (down 33.6% YoY). Sales on the other hand came in at Rs 15 bn (down 5.8% YoY). Read on for a complete analysis of PIDILITE INDUSTRIES's quarterly results.

PIDILITE INDUSTRIES 2018-19 Annual Report Analysis (Annual Result Update)

Jul 12, 2019 | Updated on Jul 12, 2019

Here's an analysis of the annual report of PIDILITE INDUSTRIES for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of PIDILITE INDUSTRIES. Also includes updates on the valuation of PIDILITE INDUSTRIES.

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

Why am I Recommending Caution? (Fast Profits Daily)

Sep 9, 2020

This is why I have changed my short-term view on the market.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Sep 22, 2020 03:25 PM


  • Track your investment in PIDILITE INDUSTRIES with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks