Pidilite: A Multibagger Stock

Introduction

Pidilite Industries Limited is a multinational chemical firm based in India. Founded by Balvant Parekh, Mr Madhukar Parekh is its current Chairman. It has been a leader in consumer and specialty chemicals in India since its establishment in 1959.

The headquarters of the business is in Mumbai, Maharashtra, India. The corporation operates five cutting-edge technological research and innovation facilities in Singapore, Thailand, Brazil, Dubai, and the United States in addition to three fully equipped internal R&D centres in India. The company employs more than 6,000 employees and has an annual revenue of 7300 crore rupees.

Up till now, four investments have been made by Pidilite Industries Limited. When Build Next raised $3.5M on July 7, 2022, they made their most recent investment. Pidilite Industries Limited has purchased three businesses. Huntsman Advanced Materials was their most recent purchase as of October 30, 2020. For 21 B, they bought Huntsman Advanced Materials.

Did you know that LIC holds around 3% shares of Pidilite?

Talking about its Top 7 shareholders, the list includes:

Holder Name Holding (%)

• Genesis Indian Investment Co Ltd 5.0
• Life Insurance Corporation Of India 3.0
• Axis Asset management Co Ltd 2.3

• Vanguard Group 0.9

• Blackrock Inc. 0.8

• Norges Bank 0.7

• UTI Asset Management Company 0.4

More than two-thirds of total sales come from its product range which primarily includes Adhesives and Sealants, Construction and Paint Chemicals, Automotive Chemicals, Art Materials, Industrial Adhesives, Industrial and Textile Resins and Organic Pigments and Preparations

Financials of Pidilite Industries Limited:

Around 15% of Pidilite Industries' total sales come from the industrial segment area, while the majority of those sales come from the consumer and retail market, which includes flagship products like Fevicol and M-Seal.

This only implies that these stock's major drivers continue to bring volume growth in the consumer and retail segments.

Over the years, Pidilite industries have proved to be a multibagger stock. Have a look at its story:

Growth of Pidilite Industries Ltd:

1. In the last quarter, solid demand conditions and staggered pricing actions drove robust double-digit revenue growth.
2. Consumer and Bazaar (C&B) and Business to Business (B2B) both had broad-based expansion, with metropolitan areas experiencing faster development than rural areas.
3. All categories and B2B growth were up, according to C&B, with continuous growth in industrial activity as well
4. The ongoing rise in input costs is having an effect on gross margins. Through pricing strategies, increasing volumes, and operational improvements, the business maintained EBITDA margins within its historical range. It has also continued to invest in its brands.
5. C&B's domestic affiliates reported solid revenue growth. Due to a rebound in real estate and construction-related activity, domestic subsidiaries' B2B performance has improved sequentially.

Impact on Stock Market:

The optimism among investors appears to be maintained by two sources. Pidilite holds a dominant position in the adhesives industry. Additionally, it is said that since the adoption of the goods and services tax, it has been gaining market share from unorganized businesses. Since there is intense competition, price hikes by paint manufacturers might harm short-term demand, particularly in the decorative market.

Conclusion

Further seeing given its strong brand, solid balance sheet position, and practically unrivaled supply chain network in the sector, the firm will be a forerunner in sales recovery and wealth compounding.