Pidilite Industries Analysis

dividend

Pros

• Dividends per share have increased over the past 10 years.
• Dividends paid are well covered by earnings (3.6x coverage).
• Dividends after 3 years are expected to be well covered by earnings (3.1x coverage).

Cons

• Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
• Pidilite Industries's pays a lower dividend yield than the bottom 25% of dividend payers in India (0.76%).
• Pidilite Industries's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

Pros

• Pidilite Industries's earnings growth is expected to exceed the low risk savings rate of 7.2%.
• Pidilite Industries is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
• Performance (ROE) is expected to be above the current IN Chemicals industry average.
• Pidilite Industries's revenue growth is expected to exceed the India market average.

Cons

• Cash flow for Pidilite Industries is expected to increase but not above the 50% threshold in 2 years time.
• Pidilite Industries's earnings are expected to grow by 11.7% yearly, however this is not considered high growth (20% yearly).
• Pidilite Industries's earnings growth is positive but not above the India market average.
• Pidilite Industries's earnings are expected to increase but not above the low risk growth rate next year.
• Pidilite Industries's net income is expected to increase but not above the 50% threshold in 2 years time.
• A decline in Pidilite Industries's performance (ROE) is expected over the next 3 years.
• Pidilite Industries's revenue is expected to increase but not above the 50% threshold in 2 years time.
• Pidilite Industries's revenue is expected to grow by 8% yearly, however this is not considered high growth (20% yearly).

health

Pros

• Pidilite Industries is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Pidilite Industries is profitable, therefore cash runway is not a concern.
• Pidilite Industries is profitable, therefore cash runway is not a concern.
• Debt is well covered by operating cash flow (835.1%, greater than 20% of total debt).
• Debt is covered by short term assets, assets are 29.3x debt.
• Pidilite Industries's cash and other short term assets cover its long term commitments.
• The level of debt compared to net worth has been reduced over the past 5 years (7.2% vs 2.8% today).
• Pidilite Industries earns more interest than it pays, coverage of interest payments is not a concern.
• Pidilite Industries's level of debt (2.8%) compared to net worth is satisfactory (less than 40%).

Cons

• High level of physical assets or inventory.

management

Pros

• The tenure for the Pidilite Industries board of directors is about average.
• Bharat's compensation has been consistent with company performance over the past year, both up more than 20%.

Cons

• Bharat's remuneration is higher than average for companies of similar size in India.
• Pidilite Industries individual insiders have only sold shares in the past 3 months.
• The average tenure for the Pidilite Industries management team is less than 2 years, this suggests a new team.

past

Pros

• Pidilite Industries's 1-year earnings growth exceeds its 5-year average (27.9% vs 13%)
• Pidilite Industries's year on year earnings growth rate has been positive over the past 5 years.
• Pidilite Industries used its assets more efficiently than the IN Chemicals industry average last year based on Return on Assets.
• Pidilite Industries has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
• Pidilite Industries's earnings growth has exceeded the IN Chemicals industry average in the past year (27.9% vs 9.1%).

Cons

• Pidilite Industries's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).

value

Pros

• PIDILITIND outperformed the Chemicals industry which returned 2.2% over the past year.
• PIDILITIND outperformed the Market in India which returned -14.5% over the past year.

Cons

• Pidilite Industries's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Pidilite Industries's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Pidilite Industries is overvalued based on assets compared to the IN Chemicals industry average.
• Pidilite Industries is poor value based on expected growth next year.
• Pidilite Industries is overvalued based on earnings compared to the IN Chemicals industry average.
• Pidilite Industries is overvalued based on earnings compared to the India market.
• NSEI:PIDILITIND is up 4.2% underperforming the Chemicals industry which returned 6.9% over the past month.
• NSEI:PIDILITIND is up 4.2% underperforming the market in India which returned 8% over the past month.