rating matrix pidilite industries (pidind) |...

May 21, 2015

ICICI Securities Ltd | Retail Equity Research

Result Update

Strong margins drive bottomline… • Pidilite recorded muted sales growth (~5% YoY) led by lower-than-

expected growth in the consumer & bazaar segment (C&B) at ~8% YoY while the industrial segment recorded a decline in sales by ~2% YoY. On a standalone basis, volume growth remained muted at ~3% YoY driven by 5.5% YoY growth in C&B volumes while the volume of the industrial segment recorded de-growth during Q4

• Despite muted sales growth, EBITDA margin expanded ~240 bps YoY due to a fall in raw material cost by ~390 bps YoY. However, the margin expansion was restricted by higher other expenses (up ~210 bps YoY) led by advertisement cost (at 6.3% of sales)

• As an economic recovery is on the cards, we believe a revival in demand from the industrial and C&B segments will drive consolidated revenue at a CAGR of 19% in FY14-17E

Market leader in adhesive segment Pidilite Industries (Pidilite) is a dominant play in India’s growing adhesive and industrial chemical market with a market share of ~70% in its leading brand categories in the organised segment. The company’s two major segments, consumer & bazaar (C&B) and speciality industrial chemical have grown at a CAGR of ~20% and ~15% (standalone), respectively, in FY10-14. The consumer & bazaar segment contributes ~79% to Pidilite’s standalone revenue. This segment has grown mainly driven by the adhesive and sealants segments that contributed ~50% to the company’s C&B segment revenue (FY14). We believe since the segment growth is largely driven by construction, repair & maintenance, sales growth (standalone) in C&B may be 19% CAGR in FY14-17E on the back of an increase in penetration in smaller towns (population below 50,000). Revival in industrial activity to drive industrial chemical demand The specialty industrial segment contributes ~21% to standalone revenue. This segment grew at 20% CAGR (FY10-14) mainly driven by demand growth from packaging, cigarettes, stickers, labelling, footwear, etc. The specialty industrial segment has three major sub-segments: industrial adhesive, industrial resins and organic pigments & preparations. We have modelled industrial segment revenues growth at ~24% CAGR (FY14-17E) led by strong growth in industrial adhesives & resins. Strong brand: More of consumer pull model Pidilite Industries is one of the well known adhesive companies in India for the quality and reach towards end users. Fevicol, the legacy brand of the company, is a generic name in the adhesive category in India. In spite of the strong brand, the company has kept its marketing & selling expenses at ~4% of sales to gain market share. Fairly valued; recent rally captures near term positives We believe that while the Indian economy is on a revival mode, Pidilite, being a strong brand in the adhesive segment, is well positioned to capitalise on the growth momentum. We believe efficient deployment of cash for inorganic growth would be an added advantage. We estimate revenue and earnings CAGR of ~19% and ~20%, respectively, in FY14-17E supported by demand from tier II, tier III cities. We believe a recovery in margin coupled with strong return ratios would justify the company’s current valuation. We believe the recent rally in the stock captures near term positives. Thus, we have maintained our HOLD recommendation on the stock with a target price at | 560/share (valuing at 37x FY17E).

Pidilite Industries (PIDIND) | 570 Rating matrix

Rating : HoldTarget : | 560Target Period : 12 monthsPotential Upside : -7%

What’s changed?

Target UnchangedEPS FY16E Changed from | 12.9 to | 12.1EPS FY17E Changed from | 16 to | 15.1Rating Unchanged

Quarterly performance

Q4FY15 Q4FY14 YoY (%) Q3FY15 QoQ (%)Revenue 1,043.5 990.6 5.3 1,202.2 -13.2EBITDA 133.9 103.0 30.0 193.4 -30.8EBITDA (%) 12.8 10.4 243bps 16.1 -326bpsPAT 80.6 73.1 10.3 124.4 -35.2

Key financials

| Crore FY14 FY15E FY16E FY17ENet Sales 4,261 4,820 5,999 7,210 EBITDA 677.0 776.6 975.7 1,196.5 Net Profit 449.8 512.6 620.8 774.1 EPS (|) 8.9 10.0 12.1 15.1

Valuation summary

FY14 FY15E FY16E FY17EP/E 64.3 57.0 47.1 37.7 Target P/E 63.2 56.0 46.3 37.1 EV / EBITDA 43.0 37.6 29.9 24.3 P/BV 14.8 12.9 11.6 10.3 RoNW (%) 23.0 22.6 24.6 27.2 RoCE (%) 29.8 28.3 32.2 35.6

Stock data Particular AmountMarket Capitalization (| Crore) 29,220.5Total Debt (FY15) (| Crore) 58.4Cash and Investments (FY15) (| Crore) 84.4EV (| Crore) 29,194.552 week H/L 638 / 285Equity capital (| Crore) 51.3Face value (|) 1.0MF Holding (%) 3.5FII Holding (%) 15.9

Price performance

1M 3M 6M 12MPidilite Industries 10.7 39.7 58.4 102.7 Asian Paints (6.3) (6.7) 9.5 43.1 Kansai Nerolac (5.7) (10.1) 13.9 75.1

Research Analyst

Sanjay Manyal [email protected]

Hitesh Taunk [email protected]


Variance analysis Q4FY15 Q4FY15E Q4FY14 YoY (%) Q3FY15 QoQ (%) Comments

Revenue 1043.5 1136.7 990.6 5.3 1202.2 -13.2Muted growth in topline attributable to industrial segment as the segment recorded a dip in sales by ~2% YoY

Other Income 9.0 7.4 19.9 -54.9 6.1 46.3 Lower investment income led to a fall in other income

Raw Material Exp 537.8 577.4 598.5 -10.1 644.8 -16.6Benign commodity prices led to an overall reduction in raw material cost by

~390 bps YoY Employee Exp 113.7 136.0 114.7 -0.9 127.6 -10.8

Admin & Other exp 240.4 214.8 207.5 15.8 210.4 14.3Other expneses increased ~200 bps YoY mainly due to higher advertisement expenses

Purchase of Traded goods 55.3 66.1 52.1 6.2 55.5 -0.3

Total Expenditure 909.7 994.2 887.6 2.5 1008.8 -9.8

EBITDA 133.9 142.4 103.0 30.0 193.4 -30.8

EBITDA Margin (%) 12.8 12.5 10.4 243 bps 16.1 -326 bpsIncrease in EBITDA margins was on account saving in raw material cost and employee cost during the period

Depreciation 30.6 32.4 19.9 53.8 30.7 -0.5Higher depreciation due to adoption of the Company Act 2013. This resulted

in an increase in depreciation charges in the quarterInterest 4.6 5.6 2.7 70.0 5.6 -17.1 Lower interest outgo was due to repayment of debtExceptional items 4.7 0.0 3.9 1.4PBT 102.9 111.9 96.4 6.8 161.8 -36.4Total Tax 23.4 28.5 24.6 -4.7 37.7 -37.8 Tax rate declined ~270 bps YoY

PAT 80.6 84.0 73.1 10.3 124.4 -35.2In spite of a sharp growth in EBITDA margin, moderate growth in PAT can be

attributabed to lower other income and higher deprectiation charges

Key MetricsConsumer & Bazaar 841.8 911.4 781.9 7.7 1,000.9 -15.9 Consumer bazaar segment has seen muted volume growth of 5.5% YoY,

attributable to a slow pick-up in demand for established productsIndustrial 215.7 245.4 219.3 -1.6 203.9 5.8 Industrial segment recorded decline in volume growth due to sluggish

demand and price cutOthers 9.8 6.1 10.5 -6.8 12.3 -20.5

Source: Company, ICICIdirect.com Research Change in estimates

Comments

Old New % Change Old New % ChangeRevenue 6,188.0 6026.9 (2.6) 7,468.9 7243.5 (3.0) We have marginally tweaked our revenue estimate for FY16E & FY17E EBITDA 995.6 975.7 (2.0) 1,225.5 1196.5 (2.4)

EBITDA Margin % 16.1 16.2 10bps 16.4 16.5 11bps We expect the EBITDA margin for FY16E & FY17E to improve further considering benign raw material prices. This would largely be on account of a decline in crude prices, including VAM (contributes ~15-20% in total raw material cost)

PAT 650.8 620.8 (4.6) 811.0 774.1 (4.6) We have revised our PAT estimate downward by ~6% YoY for FY16E & FY17E due to higher depreciation charges and tax outgo

EPS (|) 12.8 12.1 (5.5) 16.0 15.1 (5.5)

FY16E(| Crore)

FY17E

Source: Company, ICICIdirect.com Research Assumptions

CommentsFY14 FY15 FY16E FY17E FY16E FY17E

Consumer & Bazaar (%) 16.3 14.5 23.2 20.1 24.2 20.7

We believe the consumer & bazaar segment and industrial segment will record ~19% and 24% sales CAGR in FY14-17E, respectively, driven by easing in concern on economic recovery coupled with improving consumer sentiments

Industrial Growth (%) 0.7 21.9 31.3 20.4 30.9 20.9 Others Growth (%) 71.2 32.9 -3.7 20.4 8.0 20.9

EarlierCurrent

Source: Company, ICICIdirect.com Research


Company Analysis Market leader in adhesive segment

Pidilite Industries (Pidilite) is a dominant play in India’s growing adhesive and industrial chemical market with a market share of ~70% in its leading brand categories in the organised segment. The company’s two major segments, consumer & bazaar (C&B) and speciality industrial chemical have grown at a CAGR of ~18% and ~15% (standalone), respectively, in FY09-14. The C&B segment contributes ~79% of Pidilite’s standalone revenue. This segment has grown mainly driven by the adhesive and sealants segments, which contributed ~50% to the company’s C&B segment revenue (FY14). Among other sub-segments, construction & paint chemicals and art material contributes ~19% and ~12%, respectively, to the topline. The C&B segment sales growth is largely driven by the company’s pricing power in the branded product category (Fevicol, M-Seal, Dr Fixit), which resulted in margin expansion. We believe that since the segment growth is largely driven by construction, repair and maintenance works (Fevicol, M-seal, Dr Fixit are promoted in such a way), sales growth in the consumer and bazaar will take place at ~19% CAGR in FY14-17E on the back of an increase in penetration in smaller towns (population below 50,000).

Exhibit 1: C&B segment revenue contribution

Art Materials & Others10%

Construction /Paint

Chemicals25%

Adhesive & Sealants

65%


Exhibit 2: Standalone C&B segment may see ~19% revenue CAGR in FY14-17E

14821813

22272674

31093577

4389

5283

0

1000

2000

3000

4000

5000

6000FY

10

FY11

FY12

FY13

FY14

FY15

E

FY16

E

FY17

E

(| c

rore

)

20.4% CAGR

~19% CAGR


Revival in industrial activities to drive speciality chemical demand

The specialty industrial segment contributes ~21% of Pidilite’s standalone revenue. This segment has grown at ~20% CAGR during FY10-14 mainly driven by growth in demand from packaging, cigarettes, stickers, labelling, footwear, etc. The specialty industrial segment has major three sub-segments: industrial adhesive, industrial resins and organic pigments & preparations. The company’s specialty industrial chemical export revenue (contributes ~8% to topline) recorded ~21% CAGR over the last five years. This segment caters to various industries (e.g. textiles, leather, footwear, ink, packaging, etc). We have modelled industrial segment revenues will grow at a CAGR of ~24% for FY14-17E led by strong growth in industrial adhesives & resins.

During Q4FY15, the C&B segment recorded muted revenue

growth of ~8% YoY largely driven by ~5.5% YoY growth in

volume

During Q4FY15, the industrial segment recorded de-growth

in revenue by ~2%, largely due to sluggish demand. The

company has taken a price cut on some of the industrial

products to pass on the benefit to customers. The demand

for industrial products remained subdued during the

quarter. However, we believe the segment would record

revenue CAGR of 24% in FY14-17E on account of a pick-up

in industrial activity


Exhibit 3: Export revenues record ~21% CAGR in FY10-14

050

100150200250300350400450

FY10 FY11 FY12 FY13 FY14

(| c

rore

)


Exhibit 4: Growth in revenue of specialty industrial chemicals segment

467.

0

580.

9

635.

5

708.

2

713.

2 869.

2 1140

.8 1373

.1

0200400600800

1000120014001600

FY10

FY11

FY12

FY13

FY14

FY15

E

FY16

E

FY17

E

(| c

rore

)

CAGR 11%

CAGR 24%


Strong brand: More of consumer pull model Pidilite Industries is one of the well-known adhesive companies in India for the quality and reach to end-users. Fevicol, the legacy brand of the company, is a generic name in the adhesive category in India. Currently, the flagship brands of the company like Fevicol and M-Seal have a market share of ~70% each in the domestic market. Pidilite’s relentless focus on building a strong consumer brand through various ad campaigns differentiates it from its peers. This has helped the company to extend its presence into more consumer centric segments such as automotive and art materials to build a strong relationship with the end user. The company has introduced a direct marketing strategy to reach and educate carpenters about the use of a quality product in their work. Alongside, Pidilite’s simple and creative TV ad campaigns (like “Fevicol ka mazboot jod hai tutega nahi”) attracted many viewers and, thus, reached the masses. Despite the strong brand, the company has kept its marketing and selling expenses at 4.5% of sales to gain market share.

Exhibit 5: Keeps marketing & selling expenses at ~4-5% of sales

4.5

3.3 3.64.4 4.7

9.5

8.1 8.2 8.6 8.49

8

3.2

4.73.6

3.94.2

4.0 3.53.9

3.9

0123456789

10

FY08 FY09 FY10 FY11 FY12 FY13 FY14

(%)

Pidilite Industries Asian Paints Kansai Nerlac


Pidilite has consistently invested in brand building through

advertising campaigns (~4.5% of sales over the last three

years). The company has maintained its advertisement

expenses during FY15 at 4.5% of sales


Domestic business to drive consolidated topline On a consolidated basis, we have modelled revenue, earnings CAGR of ~19% for FY14-17E. We expect the domestic business to continue to witness strong volumes growth supported by sustained demand from tier II & tier III cities and its foreign subsidiaries to break even by FY16E. Standalone revenue and earnings are expected to grow at a CAGR of 19% and 17%, respectively. This can be largely attributed to the C&B and industrial division, which is expected to grow at ~19% CAGR in FY14-17E. We have tweaked our earnings estimates mainly due to a decline in other income and higher depreciation charges for FY15E and FY16E.

Exhibit 6: Revenue growth driven by introduction of new products

2194

.1

2643

.9

3109

.7

3657

.9

4260

.6

4820

.4 5998

.8 7209

.6

0

1000

2000

3000

4000

5000

6000

7000

8000

FY10 FY11 FY12 FY13 FY14 FY15E FY16E FY17E

(| c

rore

)


Price hike at regular interval to help contain drop in margin During FY15, there was marginal growth in EBITDA margin of ~20 bps YoY as the maximum benefit of benign raw material prices flowed in during Q4FY15. The benefit was largely on account of ~40% increase in VAM prices in H2F14. At the same time, the lag impact of rupee depreciation was also an overhang. VAM prices (accounting for ~15% of total raw material cost) declined from US$1500/tonne to US$1100/tonne. We believe the full benefit of benign raw material prices would flow in the coming quarters (from Q4FY15E onwards). We have modelled the consolidated EBITDA margin will improve from 15.8% in FY14 to 16.5% in FY17E.

Exhibit 7: EBITDA margin to inch up, going forward

398.

7

468.

7

483.

7 600.

5

677.

0

776.

6 975.

7 1,19

6.5

0

200

400

600

800

1000

1200

1400


(| c

rore

)

14151516161717181819

(%)

EBITDA EBITDA Margin


The EBITDA margin increased ~240 bps YoY largely on

account of saving in raw material cost during Q4FY15. In

addition, the company has guided that VAM prices are

stabilising with the decline in crude prices. We believe the

EBITDA margin will improve, going forward, with

stabilising VAM prices


Net profit likely to grow at ~20% CAGR in FY14-17E In-spite of higher depreciation charges coupled with higher tax outgo (due to end of the tax holidays of some plants) we believe there will be a PAT CAGR of 20% led by an expansion in EBITDA margin and interest cost at lower level (as the company has maintained its cash surplus status). Exhibit 8: Growth in EBITDA margin to aid PAT growth

309.

3 424.

0

449.

8

277.

0 324.

3

512.

6 620.

8

774.

1

0

100

200

300

400

500

600

700

800

900


(| c

rore

) CAGR ~13%

CAGR 20%


We believe the bottomline of the company will grow at

~20% CAGR in FY14-17E


Outlook and valuation We believe the company has witnessed sustainable revenue and earnings growth at a CAGR of 16.5% and 32.1%, respectively, in FY09-14 on the back of product demand in the fields of art and craft along with interior decoration trends in domestic households. We believe the margin will improve, going forward, supported by benign raw material prices with a favourable currency movement. The company’s ability to pass on the rise in input cost would help margins to remain intact for FY14-17E. Further, Pidilite’s recent redemption of outstanding FCCB (US$20.5 million) would translate into interest cost saving, which will help drive its bottomline. We expect revenues and earnings to grow at a CAGR of ~19% and ~20% in FY14-17E, respectively. In addition, cash deployment in inorganic growth would further aid margin growth. At the CMP, the stock is trading at 47x FY16E and 38x FY17E earnings. We believe the recent rally of the stock captures near term positives. We believe the recent rally in the stock captures near term positives. Thus, we have maintained our HOLD recommendation on the stock with a target price of | 560/share (valuing at 37x FY17E).

Exhibit 9: One year forward Mcap/sales (x)

0

5000

10000

15000

20000

Apr-1

0

Aug-

10

Dec-

10

Apr-1

1

Aug-

11

Dec-

11

Apr-1

2

Aug-

12

Dec-

12

Apr-1

3

Aug-

13

Dec-

13

Apr-1

4

3.53x

2.5x

2x


Exhibit 10: One year forward P/E(x)

050

100150200250300350400

Apr-1

0

Aug-

10

Dec-

10

Apr-1

1

Aug-

11

Dec-

11

Apr-1

2

Aug-

12

Dec-

12

Apr-1

3

Aug-

13

Dec-

13

Apr-1

4

15x

20x

25x

30x


Exhibit 11: Valuation

Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE (| cr) (%) (|) (%) (x) (x) (%) (%)

FY14 4260.6 8.9 64.3 43.0 23.0 29.8FY15E 4820.4 13.1 10.0 12.8 57.0 37.6 22.6 28.3FY16E 5998.8 24.4 12.1 21.1 47.1 29.9 24.6 32.2FY17E 7209.6 20.2 15.1 24.7 37.7 24.3 27.2 35.6



Company snapshot

0

100

200

300

400

500

600

700

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

Jan-

11

Apr-1

1

Jul-1

1

Oct-1

1

Jan-

12

Apr-1

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13

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4

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15

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5

Oct-1

5

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16

Apr-1

6

Target | 560

Source: Bloomberg, Company, ICICIdirect.com Research Key events Date EventJul-08 Company records a sharp decline in EBITDA margin by ~550 bps YoY owing to subdued performance of industrial segment and higher input cost

Apr-09 Repurchase of FCCBs of US$40 million issued in December, 2007

Jan-10 Announcement of bonus issue 1:1

Feb-11 Company records strong earnings growth of 25% YoY in Q3FY11

May-12 Strong Q4FY12 performance, standalone net profit increased 143% YoY led by saving in interest cost

Jul-12 Forms JV agreement with hybrid coatings for manufacture of construction chemicals and to establish a JV company in India for this purpose

Dec-12 Company redeems outstanding FCCB of US$28.57 million with the premium of 39.4%

Jan-13 Strong Q3FY13 performance wherein overseas subsidiaries saw a sharp 15% YoY growth in terms of constant currency and saving in interest cost

Aug-13 Acquisition of adhesive business of Suparshva Adhesives

Oct-13 Company records overall volume growth of ~17% YoY in Q2FY14 led by sharp volume rise in industrial segments by ~22% YoY

Dec-13 Redeems outstanding 600 NCDs aggregating to | 60 crore on maturity date

Sep-14 Acquisition of adhesive business of Bluecoat Private Ltd

Source: Company, ICICIdirect.com Research Top 10 Shareholders Shareholding Pattern Rank Name Latest Filing Date % O/S Position (m) n Change (m)1 Parekh (Madhukar Balvantray) 31-Mar-15 11.08 56.8 -0.22 Parekh (Narendrakumar Kalyanji) 31-Mar-15 10.50 53.8 0.03 Parekh (Ajay Balvantray) 31-Mar-15 9.56 49.0 -0.24 Parekh (Sushil Kumar Kalyanji) 31-Mar-15 8.26 42.4 -0.35 Genesis Investment Management, LLP 31-Mar-15 7.70 39.5 -0.46 Devkalyan Sales Pvt. Ltd. 31-Mar-15 5.12 26.2 0.27 Ishijas Chemical Pvt. Ltd. 31-Mar-15 4.80 24.6 0.08 Harton Pvt. Ltd. 31-Mar-15 2.41 12.4 0.29 Parekh (Mala Madhukar) 31-Mar-15 2.37 12.2 -0.110 Vaccum Forming Company Pvt. Ltd. 31-Mar-15 2.24 11.5 0.0

(in %) Mar-14 Jun-14 Sep-14 Dec-14 Mar-15Promoter 70.1 70.1 70.0 69.8 69.7FII 15.5 15.7 15.9 15.5 15.4DII 3.8 3.5 3.5 4.1 4.3Others 10.8 10.7 10.6 10.6 10.5

Source: Reuters, ICICIdirect.com Research Recent Activity

Investor name Value Shares Investor name Value SharesThe Vanguard Group, Inc. 21.96m 2.28m Parekh (Sanket Sushilkumar) -6.58m -1.12m Carnegie Fonder AB 7.32m 0.76m First State Investment Management (UK) Limited -6.05m -0.68m Franklin Advisers, Inc. 6.65m 0.73m UTI Asset Management Co. Ltd. -5.97m -0.62m LGM Investments Limited 6.64m 0.69m Genesis Investment Management, LLP -3.94m -0.41m Lloyd George Investment Management (Hong Kong) Ltd. 6.01m 0.62m Goldman Sachs Asset Management International -2.12m -0.39m

Buys Sells

Source: Reuters, ICICIdirect.com Research


.

Financial summary Profit and loss statement | Crore (Year-end March) FY14 FY15E FY16E FY17ETotal Operating Income 4283.2 4844.1 6026.9 7243.5Growth (%) 16.5 13.1 24.4 20.2

Raw Material Expenses 2361.2 2681.4 3432.0 4123.4Employee Expenses 442.0 497.3 597.1 696.1Marketing Expenses 152.0 177.8 203.0 243.7Other Expenses 650.9 711.1 819.0 983.9Total Operating Expenditure 3606.2 4067.5 5051.2 6047.0EBITDA 677.0 776.6 975.7 1196.5Growth (%) 12.7 14.7 25.6 22.6

Other Income 44.9 45.5 57.0 62.0Interest 16.3 15.6 38.0 38.0Depreciation 81.2 117.8 143.2 158.9PBDT 705.5 806.4 994.8 1220.6PBT 612.3 677.9 851.6 1061.6Total Tax 165.3 169.4 229.8 286.5PAT before MI 447.1 508.5 621.8 775.1Minority Interest 0.3 1.0 1.0 1.0PAT 449.8 512.6 620.8 774.1Growth (%) 6.1 13.9 21.1 24.7EPS (|) 9.0 10.2 12.1 15.1


Cash flow statement | Crore (Year-end March) FY14 FY15E FY16E FY17EProfit after Tax 449.8 512.6 620.8 774.1Depreciation 81.2 117.8 143.2 158.9Others 21.4 16.3 15.6 38.0CF bef working cap chan 547 646 802 971Net Inc in Current Assets -198.5 -85.1 -339.1 -434.4Net Inc in Current Liab. 50.0 52.1 136.1 72.6

Net CF from Op activities 398.8 613.0 598.9 609.2(Purchase)/Sale of FA -170.7 -371.8 -150.0 -200.0Increase/decrease in other investmen -193.0 58.8 -100.5 -100.0Others 3.5 7.1 5.0 1.0

Net CF from Inv Activities -201.2 -506.5 -142.8 -99.0Inc / (Dec) in Equity Capital 0.0 0.0 0.0 0.0Inc / (Dec) in Loan Funds -5.1 12.5 0.0 0.0Inc / (Dec) in Loan Funds 0.0 0.0 0.0 0.0Total Outflow of dividend -161.9 -173.9 -389.8 -449.8

Net CF from Fin. Activities -170.9 -199.3 -405.6 -487.8Net Cash flow 26.7 -92.8 50.5 22.4Cash and Cash Equi beg. 150.6 177.2 84.4 134.9Cash 177.2 84.4 134.9 157.3


Balance sheet | Crore (Year-end March) FY14 FY15E FY16E FY17EEquity Capital 51.3 51.3 51.3 51.3Reserve and Surplus 1900.5 2216.9 2470.0 2794.3Total Shareholders funds 1951.7 2268.2 2521.3 2845.6Total Debt 45.9 58.4 58.4 58.4Deferred Tax Liability 53.7 57.7 57.7 57.7Minority Interest 4.2 5.1 6.1 7.1

Total Liabilities 2055.6 2389.5 2643.6 2968.9

AssetsTotal Gross Block 1421.2 1793.5 1943.5 2143.5Less acc depreciation 715.0 832.8 976.0 1134.9Net Block 706.2 960.7 967.5 1008.6Total Fixed Assets 1164.2 1418.2 1425.0 1466.1

Other Investments 259.3 359.8 459.8 359.8

Inventory 599.7 641.0 797.6 1046.9Debtors 524.4 586.1 729.4 888.9Loans and Advances 93.7 82.3 120.0 144.2Other Current Assets 12.5 6.1 7.6 9.1Cash 177.2 84.4 134.9 157.3Total Current Assets 1407.5 1399.8 1789.5 2246.3

Total Current Liabilities 871.9 924.0 1060.2 1132.8Net Current Assets 535.6 475.8 729.3 1113.5Total Assets 2055.5 2389.4 2643.5 2968.8


Key ratios (Year-end March) FY14 FY15E FY16E FY17EPer Share DataEPS 8.9 10.0 12.1 15.1Cash EPS 10.5 12.3 14.9 18.2BV 38.4 44.2 49.2 55.5DPS 2.7 2.9 6.5 7.5Operating RatiosEBITDA Margin 15.8 16.0 16.2 16.5PAT Margin 10.5 10.6 10.3 10.7Return RatiosRoE 23.0 22.6 24.6 27.2RoCE 29.8 28.3 32.2 35.6RoIC 42.0 35.7 40.6 44.1Valuation RatiosEV / EBITDA 43.0 37.6 29.9 24.3P/E 64.3 57.0 47.1 37.7EV / Net Sales 6.8 6.1 4.9 4.0Sales / Equity 2.2 2.1 2.4 2.5Market Cap / Sales 6.9 6.1 4.9 4.1Price to Book Value 14.8 12.9 11.6 10.3Turnover RatiosAsset turnover 2.2 2.2 2.4 2.6Debtors Turnover Ratio 8.1 8.2 8.2 8.1Creditors Turnover Ratio 12.3 14.5 14.5 15.9Solvency RatiosDebt / Equity 0.0 0.0 0.0 0.0Current Ratio 1.6 1.5 1.7 2.0Quick Ratio 0.9 0.8 0.9 1.1



ICICIdirect.com coverage universe (Consumer Discretionary) CMP M Cap(|) TP(|) Rating (| Cr) FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E

Asian Paints (ASIPAI) 777 729 Hold 74,530 14.5 17.5 20.6 53.4 44.4 37.7 33.1 27.8 23.9 44.9 47.2 48.9 32.5 34.3 35.5Bajaj Electricals (BAJELE) 246 264 Buy 2,454 -5.3 11.8 15.0 0.0 20.8 16.4 61.6 10.6 9.0 1.5 19.5 20.8 -8.3 16.2 17.6Havells India (HAVIND) 271 259 Hold 16,908 6.2 8.8 10.9 43.9 30.8 25.0 22.8 17.7 14.6 27.5 33.3 35.0 21.2 26.1 27.0Kansai Nerolac (GOONER) 218 253 Buy 11,856 5.0 6.5 7.9 43.9 34.0 27.8 25.6 20.3 16.8 23.4 25.8 26.5 16.7 18.4 19.0Pidilite Industries (PIDIND) 597 560 Hold 30,307 10.0 12.8 16.0 60.1 46.6 37.4 38.6 30.4 24.6 30.7 35.0 38.1 23.7 27.2 29.4Essel Propack (ESSPAC) 134 142 Buy 2,010 9.0 10.6 13.2 14.3 12.1 9.7 6.8 5.9 5.1 16.8 17.8 19.2 18.0 18.6 20.1Symphony Ltd (SYMCOM) 2,240 3,101 Buy 7,597 40.6 52.8 73.8 53.4 41.1 29.4 40.9 31.2 22.4 52.2 55.0 58.0 41.2 43.2 45.7V-Guard Ind (VGUARD) 940 876 Hold 2,883 23.7 28.2 37.4 40.8 34.3 25.8 25.1 20.9 16.3 22.8 24.4 27.5 18.7 19.2 21.4Voltas Ltd (VOLTAS) 294 348 Buy 9,724 11.4 11.0 13.8 25.9 26.8 21.3 22.6 18.7 14.3 15.3 16.7 19.5 17.9 15.5 17.4

Sector / CompanyRoE (%)EPS (|) P/E (x) EV/EBITDA (x) RoCE (%)



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Pankaj Pandey Head – Research [email protected]

ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093

[email protected]


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rating matrix pidilite industries (pidind) |...

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