Accumulate Pidilite Industries; target of Rs 1600: Prabhudas Lilladher

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Pidilite Industries (PIDI) is expected to sustain growth driven by continuous innovation, strategic tie-ups, and expansion in pioneer and growth categories.
  • The company has seen a steady improvement in its volume growth trajectory, with demand momentum sustained in Q3, and another price hike likely by Q3-end.
  • PIDI's international business (IBD) has delivered strong growth, with Asia and Middle East & Africa segments showing significant improvement.
  • The company's focus on research and development, along with its ability to launch technologically advanced products, is expected to drive growth.

Thesis Validation Checklist

  • Investors should watch for sustained demand momentum, improvement in EBITDA margins, and successful execution of the company's growth strategy.
  • Key signals to monitor include UVG growth, EBITDA margin expansion, and the company's ability to maintain its market share.
  • The impact of raw material cost volatility and the ongoing Middle East crisis on the company's margins and growth should also be closely monitored.
  • A steady increase in the production of footwear and auto components, which are key end-use industries for PIDI's products, would be a positive signal.