Pidilite Inds. (PIDILITIND)
StalwartFairStock Score: 60/100 — STEADY
Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹1,693 |
| Market Cap | ₹1,72,311.9 Cr |
| P/E Ratio | 65.37 |
| ROCE | 29.84% |
| ROE | 23.5% |
| Dividend Yield | 0.68% |
| Profit Growth | 27.71% |
| Debt/Equity | 0.04 |
| Sales Growth | 19.25% |
| Free Cash Flow | ₹745 Cr |
| Promoter Holding | 69.32% |
| 52-Week Range | ₹1,259 — ₹1,707.5 |
| Sector | Chemicals & Petrochemicals |
| Book Value | ₹106.43 |
Strengths
- Superb profitability: ROE 23.50% and ROCE 29.84%
- Almost debt-free balance sheet with D/E of 0.05
- Strong promoter holding of 69.32%, aligning interests
- Consistent growth: 5-year revenue CAGR 12.50% and profit growth 16.39%
- Healthy Piotroski F-Score of 8/9 and FCF of ₹745 Cr
Concerns
- Extreme valuation: P/E 65.61 and EV/EBITDA 44.09
- DCF value ₹164 and Graham Number ₹220 imply huge downside from ₹1,402
- Margin of safety deeply negative at -576.87%
- Low dividend yield of 0.67% offers little downside support
AI Analysis
Let me examine Pidilite as I would any business. First, quality. It earns 23.5% on equity and 29.84% on capital employed, with debt/equity of just 0.05. In India, those are exceptional numbers. The business generates free cash flow of ₹745 crore, and the latest quarter shows net profit of ₹624 crore on sales of ₹3,710 crore—a healthy margin. Revenue has compounded at 12.5% annually over five years, while profit growth has been 16.39%. Promoters hold 69.32%, so their interests are aligned with mine. A Piotroski score of 8/9 reinforces the financial health. This is a high-quality stalwart, a compounder. But Ben Graham taught me to never pay any price for even the finest business. At ₹1,402, the market cap is ₹1.52 lakh crore. The P/E is 65.61 times, and EV/EBITDA is 44.09 times. Compare that to the DCF intrinsic value of ₹164 and the Graham Number of ₹220. The margin of safety is negative 577%. The dividend yield is just 0.67%, so I am entirely dependent on future growth to justify today's price. Sales growth of 9.75% and profit growth of 16.39% are respectable, but they cannot support 65 times earnings forever. Eventually, price must follow value. The balance sheet is safe, and the business is excellent. But buying at this price is an act of hope, not analysis. I would rather wait for Mr. Market to offer me a proper margin of safety before putting my money to work.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer