MOSL: PIDILITE INDUSTRIES (Buy)-GST implementation presents immense growth opportunity
Pidilite Industries: GST implementation presents immense growth opportunity, Maintain Buy
(PIDI IN, Mkt Cap USD6.0b, CMP INR1139, TP INR1330, 17% Upside, Buy)
- PIDI’s 4QFY18 reported net sales grew 14.7% YoY to INR14.9b (est. of INR14.1b). Reported consumer bazaar segment revenues were up 6% YoY to INR12.3b, with segmental EBIT growing 10.5% YoY to INR2.8b. Segmental EBIT margin expanded 80bp YoY to 23.0%. Reported industrial segment grew by 7.3% YoY to INR2.7b, with segment margin expanding 100bp YoY to 17.2%.
- Gross margin shrank 110bp YoY to 52.1%. Lower staff costs (-80bp YoY to 11.7%) were offset by higher other expenses (+120bp YoY to 21.9%). This, along with a weak gross margin, led to EBITDA margin contraction of 150bp YoY to 18.4% (est. of 19.6%).
- EBITDA grew 6.2% YoY to INR2.7b (est. of INR2.8b). Adj. PAT grew 59.3% YoY to INR2.5b (est. of INR1.9b).
- FY18 highlights: Sales rose 8.2% to INR60.8b. EBITDA increased 6.5% to INR13.4b. EBITDA margin shrunk 40bp to 22.1%. Adj. PAT rose 12.1% to INR9.7b.
- Concall highlights: 1) Demand conditions gradually improving. 2) Have taken some price increases in a few products in both 4QFY18 and 1QFY19.
Pidilite Industries is engaged in the manufacturing and selling of consumer and bazaar products and speciality industrial chemical. Co.'s business is divided into three major segments: consumer & bazaar products, industrial products and other segments. Consumer & bazaar products consist of mainly adhesives, sealants, art materials and construction chemicals. Industrial products consists of organic pigments, industrial resins and industrial adhesives. Other segments consist of VAM manufacturing unit of Vinyl Chemicals (India) Ltd.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.