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Pidilite shares in focus; CLSA retains 'sell', maintains estimates for FY23-24

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Pidilite shares in focus; CLSA retains 'sell', maintains estimates for FY23-24

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Pidilite shares: Shares of Indian adhesive manufacturing giant Pidilite Industries Ltd were trading flat during the opening on Friday after CLSA cut FY22 earnings for the stock by 5 percent and largely maintained estimates for FY23-24.

Pidilite shares in focus; CLSA retains 'sell', maintains estimates for FY23-24
Shares of Indian adhesive manufacturing giant Pidilite Industries Ltd were in focus on Friday after brokerage firm CLSA cut FY22 earnings for the stock by 5 percent and largely maintained estimates for FY23-24.
At 9:30 am, shares of Pidilite were trading 0.76 percent higher at Rs 2,480 on the BSE.
The brokerage retained a 'sell' call on Pidilite with a target price of Rs 2,115. The company's Q3 results were below expectations, and though its medium-term prospects look firm, its valuation is expensive, according to CLSA. The brokerage also noted that inflationary settings continue to impact margin.
Pidilite on Tuesday reported a 19.5 per cent decline in its consolidated net profit to Rs 359.24 crore for the third quarter ended December 2021. The company had posted a Rs 446.43-crore profit in the corresponding period a year ago, Pidilite Industries said in a regulatory filing.
Revenue stood at Rs 2,850.7 crore for the quarter ended December 31, 2021, an 8.54 percent increase quarter-on-quarter, the company said in its quarterly earnings report. The revenue also increased 24 percent year-on-year from Rs 2,299 crore at the end of Q3FY21.
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This was largely in line with estimates and came on the back of a strong showing in its consumer and bazaar (adhesives, art and craft materials, etc) and B2B (industrial products) segments.
Credit Suisse too cut FY22-24 EPS for the adhesive manufacturing stock by 2-5 percent and believes margin pressure on Pidilite persists. The brokerage also believes that Pidilite’s growth lacks significantly and will remain slower than that of Asian Paints.
 
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