MOSL: PIDILITE INDUSTRIES (Downgrade to Neutral)-Improved margin outlook, but near-term headwinds exist
Pidilite Industries: Improved margin outlook, but near-term headwinds exist; Downgrade to Neutral
(PIDI IN, Mkt Cap USD8.4b, CMP INR1163, TP INR1135, 2% Downside, Downgrade to Neutral)
- Consolidated net sales grew 10.3% YoY to INR16.4b (v/s est. of INR17.6b). EBITDA inched up 1.8% YoY to INR2.8b (v/s our est. of INR3.1b), while Adj. PAT was flat at INR2.5b (v/s our est. of INR2.3b) mainly due to lower than expected tax.
- Standalone Consumer Bazaar (C&B) segment revenue was up 8.7% YoY to INR11b, with 4% YoY growth in sales volume & mix. Segment EBIT grew 9.2% YoY to INR2.9b, with margins flattish YoY at 26.5%. Consolidated C&B segment revenues were up 11.1% YoY to INR13.6b, with segmental EBIT growing 6.7% YoY to INR3b. Segmental EBIT margin contracted 90bp YoY to 22.1%.
- FY19 performance: Sales/EBITDA grew 16.5%/1.6% YoY, while adj. PAT declined 2.6% YoY. EBITDA margin contracted 280bp YoY to 19.2%.
- Concall highlights: (1) Company sees slower near-term market growth. (2) Current spot price of VAM is below USD950 v/s VAM consumption costs of over USD1,100 in 4QFY19 and USD1,300 in 3QFY19.
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.