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Dolat Capital Report
Pidilite Industries Ltd.'s Q4 FY24 revenue was in-line our estimates. Revenues grew by 7.9% representing a four-year compound annual growthr ate of 17.1%. Consumer and bazaar segment posted 6.4% growth, while B2B segment grew by 11.7%. Domestic business reported 8.7% YoY growth with 15.2% underlying volume growth.
As Vinyl Acetate Monomer prices moderated, gross margin improved 660 bps YoY. We believe that with current VAM prices, margins would remain in the range of 20-24%.
We have downward revised our FY25 EPS estimates by 4.8% at Rs 40.3 to factor in Q4 performance and near-term challenges, however maintained FY26E EPS at Rs 46.3.
In the long run, the company's strong brand portfolio and wide distribution reach would help accelerate growth. With high growth potential and leadership, Pidilite deserves high valuations. Target price upgraded at 3,006 (65 times FY26E EPS). Accumulate. Buy on dips.
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