Motilal Oswal’s analysis report on Pidilite Industries
Pidilite (PIDI) delivered wholesome 10% quantity progress and in-line EBITDA in 3QFY24. The Client and B2B segments clocked strong double-digit quantity progress. Rural and small-town markets outpaced city markets. Worth progress (4%) was impacted by value cuts. n GM expanded 1,100bp YoY/150bps QoQ to 53% owing to benign uncooked materials costs. VAM continued to say no to ~USD900/t from USD2,000/t in 3QFY23. n PIDI stays dedicated to stepping up investments in model and buyer engagement. EBITDA margin expanded by 700bp YoY/150bp QoQ to 23.7% (est. 23.2%). We mannequin 23% EBITDA margin for FY25/FY26. n The lending enterprise pilot is underway and can be launched in a southern Indian metropolis in Feb’24. A devoted group is established to work on this system at arm’s size. The INR1b dedication over two years stays unchanged, relying on the pilot’s success.
PIDI stands out for its market-leading place within the adhesives market with a robust model and a strong stability sheet. Nonetheless, we consider the present valuation limits the upside potential. We reiterate our Impartial ranking on the inventory with a TP of INR2,650 (premised on 55x Dec’25 EPS).
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Pidilite Industries – 2612024 – moti