Pidilite crosses market cap of Rs 1 lakh crore; What’s next?

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Shares of Pidilite Industries hit record highs on Monday, taking the Fevicol maker to beyond Rs 1 lakh crore, as investors continue to bet on the company post its robust Q4 results.

With a market capitalisation of Rs 1,02,646.98 crore, shares of the company traded 2.17% higher at Rs 2,020 in the early trade at around 9.50 am (IST). On the other hand, the benchmark BSE Sensex was up 142 points, or 0.28%, at 50,683 at around the same time.

The company on May 13 reported a 96.43% growth in consolidated net profit to Rs 307.44 crore for the fourth quarter ended March 2021. The leading manufacturer of adhesives, sealants and construction chemicals had posted a profit of Rs 156.51 crore in the January-March period a year ago.

Revenue from operations climbed 44.72% to Rs 2,235.52 crore during the quarter under review as against Rs 1,544.68 crore in the year-ago period. Shares of the company have jumped more than 5% since the announcement of its financial results.

Dividend and outlook The company said its board has recommended a dividend of Rs 8.50 per equity share of Re 1 each for the financial year ended March 31, 2021. On the outlook, Pidilite Industries managing director Bharat Puri said, “Gross margins continue to be impacted due to unprecedented inflation in input costs.”

Should you buy now?

Analysts retained their bullish view on Pidilite post Q4 results. Brokerage Geojit Financial Services has ‘Buy’ rating on Pidilite with a price target of Rs 2,131. “Long-term outlook looks promising. Given the brand value, company is well-positioned to pass on any inflationary pressures to the consumer. Also, synergy benefits from recent acquisition are expected to be reflected in upcoming quarters with improved market share.”

Edelweiss Securities also has ‘Buy’ call on Pidilite with a price target of Rs 2,160. “We remain optimistic on Pidilite’s prospects given continued demand momentum, but would keep tabs on vinyl acetate monomer (VAM) price trajectory,” the brokerage said.