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Motilal Oswal Report
Pidilite Industries Ltd.'s sales in Q4 FY22 were in line. Its revenue performance was commendable, given the Covid-19 led disruptions in January 2022 and a high base of 44.7% in Q4 FY21.
Two/three-year compound annual growth rate was also healthy at 27.5%/15.2%.
Higher than expected raw material prices eroded gross margin, resulting in a significant miss on Ebitda in Q4 FY22.
While some price hikes were taken in May 2022, Pidilite's management expects vinyl acetate monomer prices to remain elevated over the next three-to-four months before softening in H2 FY23.
The rich multiple of 57 times FY24E earnings per share adequately captures the stock's fair value.
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