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.