Margin pressure and rich valuation near-term concerns for Pidilite

Improving demand shows growth potential but high input cost and weak rupee may spoil the show

Pidilite Industries (Pidilite) posted good numbers in the June quarter (Q1), with comparable consolidated topline and net profit growing 23 per cent and 6.3 per cent year-on-year, to Rs 18.2 billion and Rs 2.4 billion, respectively. 

This was led mainly by a healthy 18 per cent growth in volume, amid improving demand that is likely to persist. However, rich stock valuation and expected pressure on profitability are expected to weigh on the stock, which has surged 28 per cent in the past one year to Rs 1,151.

“Pidilite offers strong volume-led growth visibility, but given the near-term margin pressure and