Pidilite Ltd Complete Fundamental Analysis and Future Outlook
Pidilite is the largest adhesive manufacturing company in India. The company started its operations in the year 1959, with its most popular adhesive brand named Fevicol and since then it has established its presence in 80+ countries across the world.
- The company’s shares have 52 weeks high of INR 1709 and have a total market capitalization of INR 644 billion which makes it a Large-Cap company.
- The company now manufactures adhesives, sealants, pigments, Industrial resins, construction and Paint chemicals etc. It currently has a portfolio of 500+ products.
- Pidilite Industries have a total of 23+ manufacturing plants in India and a solid market presence of over 6 decades. The company has expanded into 18 international and 9 domestic subsidiaries and has established 8 R&D centres.
- The company owns some well know brands like Fevicol, M-seal, Dr Fixit, WD 40 etc which has a strong awareness in both consumer and industrial segments. The focus of the company is on-brand premiumization and Innovation.
- Some of their brands like M-seal has 70% market share in the plumbing segment and Dr Fixit has achieved 98% top of the mind awareness among consumers.
- Pidilite’s market dominance is also near-monopolistic in Fevicol and M seal brands which contribute to a major portion of the revenue
I have evaluated the company on 10 fundamental categories and each has been given a rating out of 5 stars. From this, I have arrived at a combined stock rating for the company.
This is the summary of the analysis. For details check the source link.
Source: Pidilite Shares Fundamental Analysis and Future Outlook
Some insights for the coming years from management discussion & analysis (MD&A) and con calls are as follows.
- The COVID-19 outbreak will have a negative impact on sales across the countries. Exports will also see a significant decline. The demand for industrial adhesives will recover only after manufacturing companies start operating at their full capacity.
- Pidilite will also benefit from the fall in the crude oil price as it constitutes a major portion of raw material cost. The actual impact will only be seen after the factories start operating.
- Pidilite acquired a stake of $30 million in HomeLane due to evolving market dynamics and innovation. The company has an interest in interior design space and wants to be part of the changing landscape due to technology.
- Tile adhesives are doing good with the category sales growing at a fast rate. The product is witnessing higher market acceptance with consumers increasingly switching from cement to tile adhesives.
The company shows promising growth opportunities once the temporary disruption due to COVID-19 clears.
Therefore Pidilite seems to be a fundamentally good stock for investment over a long term horizon.
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