Superglued to Profits: Pidilite Yields 21,808% Returns In The Last 20 Years
If you had invested ₹1 lakh in Pidilite Industries 20 years ago, then you could have had ₹2.19 crores in your pocket! This adhesive multibagger has given returns of 21,808%. Let’s take a deeper look at the company.
🔷 Stock: Pidilite Industries Ltd.
🔷 NSE: $PIDILITIND
🧪 The Beginning
Pidilite Industries Ltd. is a household name in the adhesives industry. It was established in 1969 by Balvant Parekh in Andheri, Mumbai. Adhesives & sealants, construction & paint chemicals, automotive chemicals, art materials, industrial adhesives, industrial & textile resins and organic pigments & preparations are some of the segments that the company manufactures.
💸 Revenue Break-Up
Fevicol, Dr Fixit, Cyclo, Hobby Ideas, Roff and M-Seal are some of its home brands. It has its business divided into two divisions:
◾ Consumer & Bazaar Products: 80% of the revenue
◾ B2B Products: 19% of the revenue
Pidilite made its public offering of equity shares in the year 1993. On 26 July 2002, its shares were trading at ₹10.65 apiece as compared to ₹2333.30 on 25th July 2022.
📈 Growth Potential
The reason for such massive growth can be attributed to a multitude of factors, including the huge market share. Pidilite’s market share makes up about 70% of India’s adhesive business as a whole.
▪️ An iconic brand in the domestic adhesives segment, where it is synonymous with the product itself.
▪️ Has a strong R&D infrastructure with 3 R&D in-house centres in India and 2 international R&D centres in the country of Singapore. The company saw a 150% increase in R&D spending since 2015.
▪️ Has an established & extensive pan-India network, comprising over 5,000 distributors, servicing 200,000 dealers, retailers and contractors across India.
▪️ Been maintaining a healthy ROCE of 30.01% over the past 3 years. The company is almost debt free.