2 PIDILITIND share price target reports by brokerages below. See what is analyst's view on PIDILITIND share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
Due to significant miss on 2QFY20 expectations and uncertainty of recovery, we have reduced our EPS forecasts by 7.7%/2.7% for FY20/FY21. There has been a sharp rally in the stock over the past three years as a result of which stock price CAGR has been in mid-20s despite earnings compounding at only 5.5% CAGR over FY16-19. While PBT forecasts are healthy at ~16.5% CAGR for the next two years (led by subdued material costs), ROCE in the mid-20s level is at a substantial discount to consumer peer average of ~32%. Valuations are expensive at 49.3x FY21 EPS. Maintain Neutral.
We expect margins to improve in the near-term due to reduction in cost of sales owing to benign RM prices. The pressure on top-line could continue in the coming quarters due to overall decline in economy. Hence, we maintain HOLD rating with a revised target price of Rs 1,387 based on 49x FY21E adj. EPS.
We estimate 18% PAT CAGR over FY19-22 on 11.8% increase in sales and 300bps margin expansion. We value the stock at 44x Sept21 EPS and arrive at SOTP based target price of Rs1365 (Rs1429 earlier). Downgrade to HOLD.
We believe sustained domestic demand (led by rural area) coupled with benign VAM prices would keep margins elevated. However, we fell that at the CMP the stock discounts major key factors like strong revenue, earning growth along with strong balance sheet (with healthy return ratios). Hence we revise our recommendation from BUY to HOLD with a revised target price of | 1414 per share.
Long term outlook remains intact, Accumulate. We estimate 19.1% PAT CAGR over FY19-21 on 14.4% increase in sales and 180bps margin expansion given benign input cost environment. We value the stock at 43xFY21 EPS and arrive at SOTP based target price of Rs1184 (Rs1163 earlier). Retain Accumulate.
Sustained robust volumes; input cost pressures to moderate sequentially. Valuation and view: Since the miss on EBITDA and PAT v/s expectations for 3QFY19 were marginal, we have not made any material change to our EPS forecasts. While near-term margin pressures will continue (hence, we expect a decline in EPS for the year before reviving smartly from FY20 onwards), we are enthused by the strong double-digit volume growth in Consumer & Bazaar segment for the sixth consecutive quarter. Apart from Titan, Pidilite is the only player to have already witnessed/likely to witness more gains over the next few years due to a shift from unorganized (30% of the adhesives market) market — a shift – also aided by its policy of sacrificing near-term margins for longer-term growth. Despite rich near term valuations, given the tremendous structural opportunity leading to elevated earnings growth beyond FY19, we continue to maintain Buy rating with a target price of INR1,280, valuing the stock at 50x December 2020 EPS, 10% premium to 3-year average.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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