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Research
Pidilite Industries - Q2FY21 Result Update - ICICI Direct
Posted On : 2020-11-17 13:49:03( TIMEZONE : IST )
Pidilite's healthy Q2FY21 performance was led by a strong recovery in the domestic business and sharp expansion in EBITDA margin. Standalone revenue increased ~4% YoY to Rs. 1630 crore led by same amount of volume growth. Growth was largely driven by a strong recovery in its consumer & bazaar (C&B) segment wherein volume & mix were up ~7.4% YoY (in line with value growth) in Q2FY21. Besides, B2B segment recovery was slightly delayed with revenue touching 91% of its pre-Covid level in Q2FY20. A sharp expansion in EBITDA margin by ~688 bps YoY to 27.3% was a function of benign raw material prices and saving through various cost optimisation measures, leading to PBT growth of 35% YoY to Rs. 478 crore. The slower PAT growth at 10% was due to benefit of tax reversals in the base period. According to the management, pick up in renovation works due to opening up of metro, tier 1 towns along with synergies through acquisition of market leader Huntsman Advanced Materials Solutions Pvt Ltd (HAMSPL) in the epoxy adhesive segment would further help drive revenue growth, going forward. We revise our revenue, earing estimates upwards for FY21E to 8% and 27%, respectively, and introduce FY23E estimates with revenue, earning CAGR of ~10%, ~13%, respectively FY20-23E.
Valuation & Outlook
We roll over our valuation on FY23 and maintain BUY rating on the stock with a revised target price of Rs. 1850/share, factoring in strong business recovery (revenue, earning CAGR of 10%, 13%, respectively, in FY20-23) and strong balance sheet.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_PidiliteInd_Q2FY21.pdf
Shares of PIDILITE INDUSTRIES LTD. was last trading in BSE at Rs.1581 as compared to the previous close of Rs. 1564.85. The total number of shares traded during the day was 13283 in over 1621 trades.
The stock hit an intraday high of Rs. 1588.5 and intraday low of 1566.2. The net turnover during the day was Rs. 21004223.
