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INVESTMENT INSIGHTS

Check Before You Invest : Pidilite Industries Ltd

BSE: 500331 NSE: PIDILITIND ISIN: INE318A01026
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Chemicals

Snapshot

Q.1 Which industry/sub-sector does Pidilite Industries Ltd belong to?
Pidilite Industries Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Chemicals segment.
Q.2 Is Pidilite Industries Ltd a good quality company?
Pidilite Industries Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Pidilite Industries Ltd undervalued or overvalued?
Pidilite Industries Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 61.14 89.23
Price to Book 13.82 16.94
Price to Sales 10.25 11.39
EV to EBITDA 39.5 52.37
Q.4 Is Pidilite Industries Ltd a good buy now?
Pidilite Industries Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Pidilite Industries Ltd?
Pidilite Industries Ltd revenue growth is 6.1% for FY-2025, which is below its 5-year CAGR of 12.49%, indicating slower growth.

Q.2 Gross Profit margin of Pidilite Industries Ltd?
Pidilite Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 24.4% for FY-2025, which is above its 5-year median of 22.6%, indicating increasing margins.

Q.3 Operating Profit Margin of Pidilite Industries Ltd?
Pidilite Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 23% for FY-2025, which is in line with its 5-year median of 21.96% indicating stable margins.

Q.4 Net Profit Margin of Pidilite Industries Ltd?
Pidilite Industries Ltd Net Profit Margin is 15.95% for FY-2025, is above its 5-year median of 14.11%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 24.4 22.6
Operating Profit Margin (%) 23 21.96
Net Profit Margin (%) 15.95 14.11

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Pidilite Industries Ltd?
Pidilite Industries Ltd Return on Asset is 16.09%, which is above its 5-year historical median of 14.69%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Pidilite Industries Ltd?
Pidilite Industries Ltd Return on capital employed is 31.16% for FY-2025, which is in line with its 5-year historical median of 29.86%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Pidilite Industries Ltd?
Pidilite Industries Ltd Return on equity is 23.21% for FY-2025, which is in line with its 5-year historical median of 22.45%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Pidilite Industries Ltd?
Pidilite Industries Ltd Cash conversion cycle is 45 days, below its 5-year historical median of 58 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.01 1.08
ROE (%) 23.21 22.45
ROCE (%) 31.16 29.86
Cash Conversion Cycle 45 days 58 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Pidilite Industries Ltd?
Pidilite Industries Ltd Debt-to-Equity ratio is 0.02, which is lower the industry average of 0.13, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Pidilite Industries Ltd?
Pidilite Industries Ltd Debt to cash flow from operations is 0.06, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Pidilite Industries Ltd?

Q.1 Promoter shareholding and pledge status of Pidilite Industries Ltd?
Promoters hold 69.32% of the Pidilite Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Pidilite Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Pidilite Industries Ltd vs industry peers?
Pidilite Industries Ltd revenue CAGR is 12.49%, compared to the industry median CAGR of 18.32%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 6.1 18.3
Gross Profit Growth (%) 14.8 22.9
Operating Profit Growth (%) 11.3 23.5
Net Profit Growth (%) 20 21.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.01 1.17
ROE (%) 23.21 25.44
ROCE (%) 31.16 31.86
Cash Conversion Cycle (days) 44.7 55

Valuation & price assessment

Q.1 Stock return of Pidilite Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 16.2% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 16.2% 8.3% 5.1% -1.8%
Q.2 Valuation ratios of Pidilite Industries Ltd vs historical?
The current P/E ratio of 61.14 is lower than its historical median of 89.23, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 61.14 89.23 28.17
Price to Book 13.82 16.94 2.22
Price to Sales 10.25 11.39 1.93
EV to EBITDA 39.5 52.37 14.20

Check more companies

1. Asian Paints
2. Solar Industries
3. Pidilite Inds.

Check trending companies

1. Granules India Ltd.
2. Nestle India Ltd.
3. National Aluminium Company Ltd.
4. Muthoot Finance Ltd.
5. Motilal Oswal Financial Services Ltd.
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