Pidilite – the makers of hatke ads of Fevicol, Fevi Kwik, Dr. Fixit etc. submitted their latest presentation made to investors and here is a short summary of the company:
Business Overview (Domestic)
The company covers two different segments – the first being Consumer & Bazaar Products while the other being Industrial Products.
The company has a strong hold in most of the segments under Consumer and Bazaar Products which contribute 84% of the company sales and has a lot more headroom for growth:
- Adhesives & Sealants 53%,
- Construction/ Paint Chemicals 19%,
- Art/ Craft Materials & Others 12%
Its Industrial Products group is constituted by Industrial Adhesives & Resins 10% which caters to a diversified user base.
The Industrial Adhesives cater to industries such as packaging, stickers, labeling, and footwear etc. along with serving specialty polymers / co-polymers for various industries such as Paints, non-woven and flocked fabrics, construction chemicals and leather.
On the Organic Pigment & Preparation 6% end, the company has a strong presence in pigment dispersions for Indian textile segment and is a pioneer Pigment Violet 23 manufacturing. Its products are exported to customers in Europe and USA.
Business Overview (International)
- Manufacturing and selling activities in USA, Brazil, Thailand, Bangladesh, Egypt and Dubai with the presence of 16 overseas subsidiaries which generated a total revenue of Rs. 581.9 Cr for FY16.
- USA (42% of Revenue) : manufactures and sells arts & craft products and automotive after-market chemicals
- Brazil (17% of Revenue): manufactures and sells adhesives, sealants and construction chemicals.
- SAARC (23% of Revenue): manufacturing adhesives, sealants & other products and has a construction chemical production facility.
- Middle East (18% of Revenue): manufactures & sells adhesives, sealants & other products and has a construction chemical production facility.
- It exports to over 60 countries with the majorly of the exports bring shipped to Middle East, Africa, USA & Europe. The export turnover in FY16 stood at Rs. 452.4 Cr.
Growth Factors:
- Upside potential of GDP growth
- Rising Urbanization and opportunity in Tier 2/3 states
- Growth of construction industry
Financials:
Summary:
- Strong position in most products and segments
- Portfolio of trusted brands
- High mix of sale from products / segments
- Headroom to grow domestic business
Disclaimer
Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion.
Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.
