Neutral on Pidilite Industries, target price Rs 1635: Motilal Oswal

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Neutral on Pidilite Industries, target price Rs 1635:  Motilal Oswal


Motilal Oswal has neutral call on with a target price of Rs 1635. The current market price of Pidilite Industries Ltd. is Rs 1742.05.

Pidilite Industries Ltd., incorporated in the year 1969, is a Large Cap company (having a market cap of Rs 88264.66 Crore) operating in Diversified sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 2299.02 Crore, up 22.27 % from last quarter Sales of Rs 1880.33 Crore and up 19.33 % from last year same quarter Sales of Rs 1926.59 Crore Company reported net profit after tax of Rs 444.85 Crore in latest quarter.

Investment Rationale
While the structural investment case remains intact, the brokerage is unable to turn constructive from a one-year perspective on account of (a) the company’s recent earnings track record, (b) lower RoCEs (in the mid-20 levels) v/s consumer peers, and (c) valuations of 65.4x FY22E and 56.2x FY23 EPS.

Promoter/FII Holdings
Promoters held 70.2 per cent stake in the company as of Dec 30, 2020, while FIIs held 11.4 per cent, DIIs 8.2 per cent and public and other 10.2 per cent.





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