INSUBCONTINENT EXCLUSIVE:
Citi has a neutral view on Pidilite Industries with a target price of Rs 1,216.
The current market price of Pidilite Industries is Rs
1,104.75.
Time period given by the brokerage is one year when Pidilite Industries price can reach the defined target.
Citi's view on the
1QFY19 consolidated PAT at Rs2.39bn grew 5 per cent YoY and was 6 per cent below Citi estimate of Rs2.54bn due to higher tax outgo (tax rate
On a comparable basis, (ex-sales of Cyclo-division of Pidilite USA which was sold in June 2017), sales grew 23 per cent YoY
Consolidated EBITDA at Rs3.8bn grew 19 per cent YoY and was 5 per cent ahead of Citi at Rs3.6bn
segment had 20 per cent growth in volume on a low base (due to GST related disruption in 1QFY18)
environment has been improving, albeit gradually; widening distribution reach has been the other key driver aiding Pidilite's volume
GST implementation has led to some market share gain for organized players; although the network rationalization benefits have been
1QFY19 due to input cost headwinds
VAM prices averaged $1200/ton during 1QFY19; spot prices have inched up to $1320/ton
Besides VAM, prices of other raw materials such as rubber base have also increased; consequently, there are downside risks to gross margins
Pidilite has taken price hikes in the range of 3-5 per cent in certain categories in both segments, (including after 1Q end)
AP spends were high in the quarter at about 4.7 per cent; management clarified that it does not view AP spend reduction as an EBITDA margin
