By MJK Investments
PIDILITE
1357
285X in last 22 years
601
12X in last 10 years
114
5
1998
1999
2000
2001
2002
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
What makes Pidilite so special?
How it has evolved over the years?
Unique competitive advantages
What could be the next trigger for growth?
2016
2017
2018
2019
2020
Product Building Process
Entry into seemingly commoditized business
Establish strong connect with the influencers
Innovative branding to increase retail recall
Innovation in packaging to reach mass users
Pidilite - Business segments
Consumer and bazaar segment
8%
Adhesives & sealants
COSNUMER AND
BAZAAR SEGEMENT
80% of Total
Standalone Revenue
19%
Construction/paint
chemicals
53%
Art materials &
others
1. Adhesives & sealants
 Core portfolio of Pidilite, largely a B2C segment and with all the products with strong brand recall
 Some notable brands in this category are Fevicol, Fevikwik, Fevistik, M-seal etc.
 Main product, Fevicol has
become synonymous with
adhesives.
 Strong presence in the instant
adhesive segment.
 The brand has introduced
many innovative products
which have transformed
the way carpentry trade
operates in India.
 Fevikwik is available in a
variety of pack sizes including
a handy Rs.5 SKU and can be
bought at hardware
stores, kiranas, medical
shops, stationery outlets, and
other outlets.
 Currently, the focus is on
growing through
premiumisation of the
categories
 Market leader in glue sticks.
 India’s leading epoxy putty.
 There was a time when
adhesives were only available
in liquid form, Pidilite
addressed this issue 20 years
back through the launch of
Fevistik.
 M-seal is a multi-purpose
sealant with 4 main
applications –
sealing, joining, fixing and
building.
 M-Seal is a great asset to the
plumbing industry and is used
by plumbers, plumbing
contractors, auto mechanics
and households (DIY) for
repair and new construction
segments.
Adhesives & sealants
Market Share
70%
70%
60%
60%
*While the other players are largely focused
on the industrial adhesives segment, Astral is
competing with Pidilite in its relatively higher
margin Consumer & Bazaar segment
Fevicol
Fevistik
Fevikwik
M-seal
Adhesives & sealants as a % of total Revenue
54%
54%
56%
54%
55%
54%
51%
50%
49%
49%
51%
51%
53%
50%
55%
55%
56%
53%
50%
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Adhesives & Sealants
Particulars
4000
CAGR
18 yr CAGR
15%
10 yr CAGR
13%
5 yr CAGR
9%
25%
0.3
26%
23%
3500
3000
16%
13%
2000
8%
1500
1000
500
266
310
365
416
498
2199
18%
14%
2500
24%
20%
18%
3436
623
782
881
947
1160
1436
1699
14%
1939
13%
2507
14%
2676
3331
2945
0.2
17%
0.15
0.1
10%
7%
0.05
-3% 0
0
-0.05
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20




0.25
The core category has grown at a CAGR of 15% from 2002-20.
Although gradually the growth has tapered off the sales CAGR over last 5 years is just 9%.
There has been continuous innovation by launching new variants of Fevicol specific to the needs.
Although there are worries around increasing readymade furniture, but customized furniture are still prevalent and
cheaper as compared to readymade.
2. Construction chemicals
 Growth portfolio of Pidilite, both a B2C as well as B2B/B2I segment and the products with strong brand recall.
 Some notable brands in this category like Dr.Fixit which has also become synonymous to water-proofing.
 A market leader in Modern
Waterproofing to create Leak-free and
Damp-free India.
 Best-In-Class Waterproofing Solutions For
Building And Repairing Homes.
 Dr. Fixit products are created at modern
R&D centers in India, Middle East and
Singapore.
 The products are easily available in
cement, building materials, paints and
hardware stores.
 Leading water-proofing contractor in
Mumbai.
 Providing end to end solutions to
institutional clients rather than just
selling Raw materials.
DR FIXIT= “WATERPROOFING”
Construction/paint chemicals as a % of total Revenue
12%
13%
13%
14%
15%
16%
15%
17%
18%
19%
20%
20%
19%
20%
19%
19%
20%
20%
19%
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
ROFF
 To strengthen our construction chemicals business, the Company acquired the “Roff” brand in the year 2004.
 “Roff” has been a strong construction chemicals brand in India for over 18 years when it was acquired.
 With the combined strengths of its “Dr. Fixit” and “Roff” brands, Pidilite has become the market leader in the retail.
segment of the construction chemicals business.
Construction Chemicals
1400
Particulars
1200
CAGR
18 yr CAGR
18%
10 yr CAGR
13%
0.4
5 yr CAGR
7%
1194
36%
1071
30%
1000
26%
26%
14%
200
0
59
75
85
108
136
184
230
880
25%
299
16% 450
348
563
899
0.35
0.3
924
0.25
737
666
600
400
29%
25%
27%
800
1216
0.2
19%
18%
16%
0.15
12%
11%
2%
3%
0.1
0.05
2%
0
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20




This category has grown at a CAGR of 18% from 2002-20.
Although gradually the growth has tapered off the sales CAGR over last 5 years is just 7%
Company claims it would be the next drive the next leg of growth but this is not visible from the growth numbers
Although the company have robust brands in place like Dr Fixit and future growth products could be Nina percept, Roff
3. Art materials
 Core portfolio of Pidilite, a B2C segment and the products with strong brand recall
 Some notable brands in this category like Fevicryl, Hobby Ideas
 In 2010, Pidilite’s research and
development team found a huge demand
from the market for a glue which could
stick metals and beads on to fabrics.
 To create the right product, Pidilite’s
team worked with zardosi karigars in
places like Surat, Delhi and Mumbai.
Art materials & others as a % of Total Revenue
12%
10%
5%
5%
5%
5%
5%
2001-02
2002-03
2003-04
2004-05
2005-06
6%
6%
6%
2006-07
2007-08
2008-09
2009-10
9%
2010-11
12%
10%
11%
10%
8%
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
9%
8%
8%
2017-18
2018-19
2019-20
Art Materials & Others
Particulars
600
CAGR
18 yr CAGR
18%
10 yr CAGR
10%
5 yr CAGR
-1%
0.9
528
83%
520
487
465
500
482
512
513
0.7
333
400
53%
16%
14%
18%
193
18%
100
25
29
33
38
45
15%
69
0.5
92
0.4
40%
33%
200
0.6
48%
300
106
213
10%
0.8
0.3
225
0.2
13%
6%
-1%
6%
-1%
0.1
0% 0
-7%
0
-0.1
-0.2
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
 This category has grown at a CAGR of 18% from 2002-20.
 Although gradually the growth has tapered off the sales CAGR over last 5 years is -1%.
 The art materials category is definitely struggling and company also not made any claims on getting it back to growth
trajectory.
Consumer & Bazaar Products
Particulars
Sales CAGR
18 yr CAGR
16%
10 yr CAGR
12%
5 yr CAGR
7%
5,274
5,419
5,574
5,132
2016-17
2017-18
2018-19
2019-20
4,525
4,023
3,515
3,020
2,536
404
478
556
2001-02
2002-03
2003-04
652
799
2004-05
2005-06
1,069
2006-07
1,614
1,743
2008-09
2009-10
1,395
2007-08
2,104
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
Consumer & bazaar products (Growth YoY)
34%
31%
23%
18%
16%
21%
17%
21%
19%
16%
16%
14%
12%
13%
8%
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
3%
3%
3%
2017-18
2018-19
2019-20
Consumer & Bazaar Products
Particulars
EBIT CAGR
18 yr CAGR
17%
10 yr CAGR
15%
5 yr CAGR
15%
EBIT
1,170
90
112
117
134
154
170
232
231
371
447
489
608
699
1,256
1,372
1,387
1,547
767
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Consumer & bazaar products EBIT%
22%
23%
26%
21%
21%
19%
21%
16%
17%
21%
19%
20%
20%
24%
26%
26%
28%
19%
14%
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Consumer & Bazaar Products
78%
80%
81%
81%
81%
83%
84%
83%
72%
78%
75%
75%
77%
79%
82%
84%
87%
90%
91%
90%
89%
89%
90%
87%
85%
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
77%
73%
78%
2017-18
2018-19
2019-20
70%
71%
72%
71%
74%
75%
71%
85%
87%
86%
87%
83%
81%
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
Consumer & bazaar products EBIT Contribution
Consumer & bazaar products Revenue Contribution
Consumer & bazaar products ROCE
123%
112%
119%
111%
104%
94%
91%
2002-03
68%
66%
65%
60%
2003-04
2004-05
2005-06
2006-07
68%
64%
2007-08
2008-09
75%
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
85%
2016-17
INDUSTRIAL PRODUCTS SEGMENT
INDUSTRIAL
CHEMICALS
19% of Total
Standalone Revenue
6%
6%
Organic pigments &
preparations
Industrial resins
Industrial adhesives
6%
Industrial Products
Speciality Industry Chemicals
386
155
52
62
72
92
107
123
189
225
233
197
200
169
2011-12
39
54
44
46
52
57
65
52
85
62
91
63
115
69
123
92
141
106
155
116
189
166
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
Organic pigments & preparations
8%
11%
8%
9%
8%
10%
8%
11%
8%
10%
8%
10%
7%
7%
8%
Industrial resins
8%
8%
8%
8%
8%
8%
264
233
284
243
214
262
268
299
405
271
264
237
243
200
233
264
284
243
321
341
393
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
Industrial adhesives
7%
6%
6%
6%
6%
5%
4%
4%
7%
6%
7%
6%
5%
5%
5%
5%
6%
9%
10%
8%
8%
7%
6%
6%
6%
6%
7%
6%
6%
6%
6%
6%
5%
6%
6%
6%
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
Organic pigments & preparations
Industrial resins
Industrial adhesives
Industrial Products
1,730
Particulars
Sales CAGR
18 yr CAGR
14%
10 yr CAGR
15%
1,797
5 yr CAGR
16%
169
199
221
261
281
2001-02
2002-03
2003-04
2004-05
2005-06
347
402
453
460
2006-07
2007-08
2008-09
2009-10
816
869
872
2013-14
2014-15
2015-16
708
581
636
2010-11
2011-12
2012-13
963
995
2016-17
2017-18
2018-19
2019-20
Industrial products (Growth YoY)
74%
11%
2002-03
2003-04
26%
24%
18%
18%
16%
7%
2004-05
2005-06
13%
10%
11%
15%
7%
2%
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
10%
2015-16
4%
3%
0%
2016-17
2017-18
2018-19
2019-20
Industrial Products
Particulars
EBIT CAGR
18 yr CAGR
16%
10 yr CAGR
11%
5 yr CAGR
23%
EBIT
271
216
153
91
17
17
18
19
31
41
50
100
53
82
81
80
166
158
97
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Industrial products EBIT %
20%
10%
8%
8%
11%
7%
12%
13%
12%
18%
17%
13%
11%
10%
11%
17%
16%
12%
15%
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Industrial Products
16%
13%
14%
13%
17%
19%
29%
29%
2001-02
29%
28%
2002-03
2003-04
26%
2004-05
25%
2005-06
2006-07
14%
15%
24%
24%
2018-19
2019-20
19%
20%
18%
17%
15%
12%
10%
11%
12%
12%
10%
21%
20%
21%
22%
20%
19%
19%
18%
16%
16%
16%
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
Industrial products Revenue Contribution
Industrial products EBIT Contribution
Industrial products ROCE
67%
69%
63%
66%
52%
46%
35%
37%
36%
2006-07
2007-08
2008-09
38%
28%
17%
18%
18%
2002-03
2003-04
2004-05
2005-06
2009-10
2010-11
2011-12
2012-13
33%
2013-14
46%
39%
2014-15
2015-16
2016-17
2017-18
2018-19
42%
2019-20
BRAND PORTFOLIO
THE HITS
PIONEER
MOON-SHOOTS
THE MISSES
COMPETITIVE ADVANTAGES
1.Innovation
Branding- a commodity product turned consumer
through branding.
INNOVATION
Pidilite has spent 0.5 % of revenues in last 2
decades on R&D as compared to 3M spend of 3%.
Product- Good things in small and simple packages.
Packaging- small packages big benefits.
Over the years M-seal
has evolved from an
Industrial sealant to
consumer product
and has become
synonym for water
leakage sealant.
Initially Fevikwik was
priced at Rs 20 then
company reengineered it and
launched 0.5 gm for
Rs 5 and now is
market leader.
The company created
a plastic
packaging material
that did not
absorb ambient
moisture and could
hold small quantities.
2.Branding- Generic to the product category
Advertisement as % of sales
`
4%
5%
5%
4%
4%
4%
4%
3%
2002
2003
2004
2005
2006
2007
2008
2009
4%
4%
3%
4%
4%
4%
3%
3%
3%
3%
4%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Pidilite’s advertisements won
awards at the Cannes Lions
awards and the Abby awards
for its advertisements.
The company hired Ogilvy &
Mather for its branding and
advertisement exercise.
3. Strong brands backed by strong R&D
Strategic Assets
Pidilite has maximum intermediary coverage
Company
Pidilite
Brands
Paints (Asian)
Tiles/Sanitaryware (Cera)
Adhesive (Araldite, Resinova)
Carpenter
Plumber
Painter
Mason
Electrician





(Fevicol) (M-seal, Dr. Fixit) (Dr. Fixit) (Roff, Dr Fixit) (Steelgrip)















Thanks to inputs from carpenters, Pidilite premiumised Fevicol portfolio
This advantage not
only helps create brand
equity but also reverse
feedback mechanism.
Architecture
Pidilite has maximum channel coverage
Company
Pidilite
-Fevicol
-Fevikwik
-M-seal
-Fevistik
Paints (Asian)
Tiles/Sanitaryware (Cera)
Adhesive (Araldite, Resinova)
Grocery
Stationary
Hardware
Wood Marts
Automotive
Electricals
Cement























































End use connect across value chain

Loyalty and reputation with users and intermediaries
Pidilite has built a strong loyalty with entire ecosystem
Intermediaries
training
End-Users
Carpenters prefer Fevicol given the strong recall
and most of them refer to adhesive as Fevicol.
Since adhesive is not a major cost for furniture
making, carpenters are reluctant to shift from
Fevicol to other brands.
Influencer Reached
Pidilite continues to train intermediaries to use
its products effectively and to educate them
about new launches. These programmes also
help the company to further strengthen its ties
with the intermediaries.
Product
Programme
Fevicol
Fevicol Champions Club Carpenter
FCC Was Founded In 2002 By Pidilite Industries Ltd. Exclusively For The Wood-Working,
Contractor Community, With More than 160,000 Members Across The Country.
M-seal
Regular Training
Programmes
Tied-up with Indian Plumbing Skill Council (IPSC) for organizing skill development workshops for
plumber. Pidilite has been training plumbers through one of the largest contact programs on
safe plumbing practices, besides providing solutions to their day-to-day problems by offering a
range of well-suited products.
Dr Fixit
Dr. Fixit Institute
Plumber
Plumers, Masons,
Contractors
Comments
Use global standards of waterproofing in India. Conducting several programmes all over the
country for creating awareness and skill development
Strong Management team
Management
Professionalizing management
Manish Modi- Head HR (Hired in 2007)
Hired as an ID in 2008 later elevated to
MD in 2015
Name
Experience
Credentials
Bansi S.Mehta
Ranjan Kapur
50+ years
40+ years
Taxation expert with over five year experience. Also an independent director at companies such as Gillette, Procter and Gamble,
Atul Ltd, HDFC and SBI.
Chairman at Bates India. Also an independent director at Abbott India
Sanjeev Aga
40+ years
Operating partner at Kedaara Capital. Also an independent director at Idea Cellular
and UFO Moviez
Uday Khanna
40+ years
Served as Managing Director of Lafarge India during FY05-12. He was also the senior vice president of Group strategy at Hindustan
Unilever, where he spent 30 years
Meera Shankar
40+ years
She is an independent director in other Indian companies such as ITC and Adani transmission.
Piyush Pandey
40+ years
Mr. Pandey is the Executive Chairman of Ogilvy & Mather Pvt. Ltd. In 2016,he was honored with the 'Padma Shri'. He was the first
Asian to chair the Cannes Jury in 2004.
Strong leadership team
Person
Designation
Bharat Puri
MD&CEO
Salil Dalal
COO- Emerging India
Sanjay Bahadur
CEO- Construction Chemicals
Rajesh Balakrishnan
CEO- Industrial Products
Shantanu Bhanja
CEO- Consumer Products
Comments
Bharat Puri has vast experience with companies like Asian Paints, Mondelez. He is known for
building brands with his specialization sales & marketing. He was associated with Asian paints
for 16 years.
Salil heads the Emerging India Division, where he is responsible for driving growth across all
Pidilite Consumer and Bazaar businesses in the small towns below 2 lakh population and the
Rural Markets. Salil worked for 10 years at Asian Paints
Mr. Bahadur has rich experience of 27 years in Construction Industry. He served as the
Managing Director of ACC Concrete Limited at ACC Limited. Has been associated with Pidilite
for more than 10 years
For 14 years, he worked for BASF at several locations in Asia Pacific handling Regional
Marketing, Innovation and Strategy functions for the Performance Chemicals Division. Has
been associated with Pidilite for more than 7 years
Prior to Pidilite, Shantanu worked for more than 15 years with Reckitt Benckiser (RB), of which
half were spent at the Global Headquarters in the UK, and in Europe. Joined Pidilite in 2018 to
lead the Consumer Products Business
Employee Cost as a % of sales
8%
8%
8%
9%
2003
2004
2005
2006
8%
9%
2007
2008
11%
11%
11%
10%
10%
10%
10%
11%
11%
12%
12%
13%
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Strategic Acquisitions
Pidilite acquired Blue Coat as it was a strong brand
in Gujarat especially in white glue, and Pidilite
was struggling to gain market share in the state. It
acquired Blue Coat for Rs 260 crores (i.e 48% of
FY15 CFO).
Pidilite acquired Nina waterproofing, a leading
waterproofing contractor in Mumbai, to enhance
its presence in institutional contracts and provide
end-end solutions rather than just waterproofing
material. The company spent Rs 100 crores (i.e
18% of FY15 CFO)
Revenue from Operations
Particulars
Sales CAGR
18 yr CAGR 10 yr CAGR
16%
13%
8000
5 yr CAGR
9%
36%
37%
7078
7294
7000
0.4
0.35
6078
6000
18%
5000
4000
18%
16%
16%
10%
1707
2000
1000
493
574
652
770
916
1986
0.3
4844
0.25
4283
3127
14%
3000
18%
21%
19%
5361
5617
3678
16%
0.2
16%
13%
2657
0.15
11%
2194
0.1
8%
1247
3%
5%
0
0.05
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Gross Profitability
Gross Margins
58%
2002
59%
2003
59%
2004
56%
57%
2005
2006
55%
55%
52%
2007
2008
2009
59%
2010
58%
2011
44%
45%
45%
45%
2012
2013
2014
2015
52%
53%
52%
49%
53%
2016
2017
2018
2019
2020
 Company’s major raw material VAM is linked to crude, which is the main raw material for adhesives, resins etc.
 The rise in Gross margins after 2015 is because of two things both benign raw material prices, and company
increases prices if a range of gross margins is not achieved.
 We can expect this range of gross margins to sustain as company can command price increase and pass on the extra
burden.
Operating Profitability
Particulars
EBIT CAGR
18 yr CAGR
18%
10 yr CAGR
16%
Operating Profit
5 yr CAGR
17%
1406
316
76
89
86
100
115
136
200
143
2002
2003
2004
2005
2006
2007
2008
2009
2010
409
420
2011
2012
525
590
653
2013
2014
2015
1073
1145
1221
2016
2017
2018
1235
2019
EBIT Margins
15%
2002
16%
2003
13%
2004
13%
2005
13%
2006
11%
12%
2007
2008
14%
15%
2010
2011
13%
14%
14%
13%
2012
2013
2014
2015
20%
20%
20%
2016
2017
2018
17%
19%
2019
2020
7%
2009
2020
Prudent Working Capital Management
Inventory Days
140
129
129
128
Recievable Days
122
123
111
117
116
97
91
89
87
78
52
48
2002
2003
5054
2004
56
49
2005
56
44
2006
4045
2007
30%
25%
25%
23%
Payable Days
133
4242
2008
2009
59
49
2010
54
44
2011
4343
2012
4145
2013
49
41
2014
24%
2015
2016
2017
73
65
51
60
48
56
44
50
42
88
62
51
2018
54
2019
2020
140
26%
24%
22%
4843
100
96
93
90
85
Cash Conversion Cycle
120
23%
21%
20%
Working Capital as a % of Sales
22%
21%
20%
19%
18%
18%
18%
20%
20%
20%
19%
100
80
15%
10%
125
95
121
122
99
116
123
116
106
105
60
91
85
78
77
77
81
83
78
81
40
5%
20
0%
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Robust Cash Conversion
1280
907
749
397
367313
299 282
392
66 33
57 43
49 40
91 67
10955
2002
2003
2004
2005
2006
77
237
183
110
8
2007
2008
-36
2009
2010
2011
CFO
472
2012
552
444
394
310
2013
2014
794
656
796
729
845
739
2017
2018
2019
920
303
2015
2016
FCF
165%
140%
93%
95%
63%
82%
73%
91%
74%
65%
147%
105%
121%
97%
104%
64%
69%
82%
91% 95%
104%
103%
84%
69%
63%
94%
93%
93%
76%
91%
76%
92%
80%
2017
2018
2019
106%
82%
60%
7%
2002
2003
2004
2005
2006
2007
2008
-21%
2009
2010
2011
CFO/EBITDA
2012
FCF/PAT
2013
2014
2015
2016
2020
Robust Return Ratios
33%
22%
21%
20%
21%
22%
25%
35%
31%
17%
25%
2002
27%
2003
24%
2004
25%
2005
26%
2006
25%
2007
23%
2008
24%
32%
27%
28%
28%
25%
24%
43%
30%
29%
33%
32%
30%
2011
2012
2013
2014
2015
31%
27%
24%
26%
36%
34%
31%
32%
2017
2018
2019
2020
12%
2009
2010
ROCE
2016
ROE
Dividend Payout Ratio
34%
33%
33%
35%
37%
40%
36%
34%
26%
2002
2003
2004
2005
2006
2007
2008
2009
28%
29%
30%
31%
2010
2011
2012
2013
2014
29%
2015
27%
28%
2016
2017
32%
32%
2018
2019
2020
Overseas Business
Sales
195
256
279
318
351
646
PBT
98
11
3
2006
-2
2007
2008
-15
2009
-37
2010
-19
2011
2012
-44
-30
2013
-43
2014
-13
2
28
2015
2016
9
2017
-47
586
526
520
494
461
388
626
2018
-6
2019
8
2020
 The Overseas business has been a lag since inception.
 Company has been continuously trying to revive it, but just some geographies are performing .
 The management is also not trying to correct its mistakes and close down the non profitable operations
like Brazil.
Revenue
131.5
68.1
128.2
126.0
PAT
143.8
80.2
110.2
97.8
2015
-12.36
-3.34
0.62
100.8
93.2
86.4
87.1
-0.56
-0.11
-0.8
2006
2007
0.3
0.2
2008
-2.9
2009
-20
0.0
2010
2011
-8.8
2012
-21.65
2013
-42
2014
-26.76
2016
2017
2018
-4.42
2019
-2.9
2020
-3.84
Management Plans for Future growth
Plans for Core categories:
• Consistent Premiumisation- Fevicol Evolution.
• Gains from the unorganized segment which still stands at 30-35%.
Plans for Growth categories:
• Consistent efforts to build the waterproofing range.
• Hugely underpenetrated waterproofing market.
• Building on both institutional as well as B2C segment.
• Effective advertising spreading the message for waterproofing.
Plans for Pioneer categories:
• Nascent category, but a exciting one.
• Strategic alliances, in some segments like wood coating could push
the growth in the coming years.
WHAT MAKES PIDILITE SPECIAL?
Strong product portfolio with brands leading the market.
Widest channel coverage.
Consistent Free Cash flow generation.
Experienced Management and core team with vast experience.
Strong connect with the intermediaries.
Consistent ROCE above the cost of Capital.
STRONG INTERNAL GENERATION
PERIOD: 2002-2020
Application on Funds
Sources of Funds
1%
Repayment of loan
3% 6%
7%
Internal Generation (CFO)
Increase in loans
5%
Total Investments
Buy-back of equity
shares
Decrease in investment
22%
26%
Dividend
Decrease in working
capital
Others
11%
Capital expenditure
5%
82%
Increase in working
capital
Others
5%
27%
ARE THE CURRENT VALUATIONS JUSTIFIED?
When you pay too high a price for a great company, company could remain great but
your investment could prove to be terrible.
68
62
60
48
31
26
19
9
10
6
6
2002
2003
12
19
24
21
28
15
20
8
10
2004
2005
2006
19
2007
16
15
2008
2009
18
18
20
2010
2011
2012
P/E
EV/EBIT
32
35
44
38
42
46
46
2019
2020
34
23
2013
26
25
2014
2015
2016
29
2017
2018
RISKS
 Lot of paint companies are entering into Waterproofing space, which could hinder the growth for the
company.
 The core category growth remains a question.
 Seems like there is no end to the suffering of international business.
 The new categories are still nascent and we can’t bet huge on it.
 Majority of subsidiaries are either loss making or not contributing significantly.
PEER COMPARISON
Particulars
Pidilite
Resinova
Sales CAGR
6%
8%
3436
3331
 While all the other adhesives companies
focus is on institutional side, whereas
Pidilite has established it as a strong
consumer brand.
2945
2676
2507
 Astral is following a similar strategy by
focusing on the B2C segment .
394
2016
458
2017
635
526
583
 Astral has replicated Pidilite’s portfolio right
from Fevicol to Fevikwik to M-seal.
2018
Pidilite(Adhesives&Sealent)
2019
Resinova
2020