Pidilite Industries Limited

Basic Materials — Specialty Chemicals · NSE

₹1,502.80−₹2.20 (−0.15%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by high debt relative to equity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Pidilite Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Pidilite Industries Limited, together with its subsidiaries, engages in the consumer and industrial specialty chemicals business in India and internationally. It operates through the Consumer & Bazaar, and Business to Business segments.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees8,835

Annual revenue₹14,551 Cr

How does it make money?

Turns over ₹14,551 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 8,835 employees supports ₹1.65 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin24.5%

Net margin16.8%

Revenue / employee₹1.65 Cr

Who are its competitors?

The closest listed comparisons in its industry are ASIAN PAINTS LIMITED, SRF LTD, UPL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

SRF LTDP/E 33.8x · ROE 15.4%

UPL LIMITEDP/E 21.5x · ROE 6.1%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 28.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 22.6% against a peer median of 15.4% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE28.5%

ROE22.6%

Peer median ROE15.4%

What is the outlook?

19 analysts covering the stock expect revenue to grow about 10.4% and earnings to grow about 12.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+10.4%

Est. earnings growth+12.1%

Analysts19

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +24% while net margin moved +55% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+24%

Margin effect+55%

DalalBaazaar Score

71/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 57.8x is demanding — it needs sustained high growth to justify
✓ P/E is 32% below its own historical median of 85.5x — cheap by its own standards
✗ P/B of 14.12x is a steep premium to book

Quality vs. Valuation

Company Quality

77/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

42/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

57.8x

3Y Median

85.5x

40 monthly readings · mean 87.9x · range 61.0x–127.3x

Sector Median

33.8x

median of 3 sector peers

🟢Current valuation is approximately 32% below its 3y median of 85.5x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 71% above the peer median of 33.8x.

vs. its own history

Cheap

85.5x median over 40 months · -32%

vs. sector peers

Expensive

33.8x median of 3 peers · +71%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

57.8x

P/B

14.12x

EV/EBITDA

43.1x

PEG

2.37

Dividend Yield

0.77%

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 17.2% to 24.5% over 3 years.
Cash generation is improving
Free cash flow is up 112% over 3 years.
Return on equity is rising
ROE has improved from 17.7% to 22.6%.
Return on capital is rising
ROCE has improved from 21.8% to 28.5%.
High return on capital employed
ROCE of 28.5% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 57.8x the stock trades 32% below its own median of 85.5x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 high

🔴High leverageFinancial
Debt/Equity of 3.78x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 28.5% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 17.2% to 24.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 32% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 3.78x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 71% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 7.4% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 22%✓ 24.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 6% a year✓ 7.4% CAGR
Latest reported year was 21.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹2,236 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 25%✓ 28.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 1 neutral · 3 weak

Market Cap

₹1.53 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

57.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

14.12x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹25.98

Profitable

Profitable on a per-share basis

ROE

22.6%

Strong

Strong capital efficiency

ROCE

28.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.78x

High

High leverage

Revenue Growth (YoY)

21.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

29.6%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.77%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹2,236 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹1,502.8

P/E (Forward)

47.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

24.1%

Good

Healthy core-business profitability

Net Margin

17.2%

Good

Strong bottom-line conversion

Current Ratio

2.38

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.43

Defensive

Steadier than the market

52W Range Position

54%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1508.0 / 1584.9

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

46.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹11,752 Cr	₹12,337 Cr	₹13,093 Cr	₹14,551 Cr	+7.4%
EBITDA	₹2,021 Cr	₹2,754 Cr	₹3,040 Cr	₹3,559 Cr	+20.8%
EBITDA Margin	17.2%	22.3%	23.2%	24.5%	—
PAT (Net Profit)	₹1,273 Cr	₹1,729 Cr	₹2,076 Cr	₹2,449 Cr	+24.4%
EPS	₹12.52	₹16.99	₹20.36	₹24.01	+24.3%
ROE	17.7%	20.6%	21.3%	22.6%	—
ROCE	21.8%	26.1%	26.8%	28.5%	—
Total Debt	₹391 Cr	₹382 Cr	₹454 Cr	₹417 Cr	+2.2%
Free Cash Flow	₹1,052 Cr	₹2,165 Cr	₹1,834 Cr	₹2,236 Cr	+28.6%

🟢 Revenue has grown at 7.4% a year over 3 years.

🟢 EBITDA has grown at 20.8% a year over 3 years.

🟢 EBITDA Margin has risen from 17.2% to 24.5% over 3 years (+7.3 pts).

🟢 PAT (Net Profit) has grown at 24.4% a year over 3 years.

🟢 EPS has grown at 24.3% a year over 3 years.

🟢 ROE has risen from 17.7% to 22.6% over 3 years (+5.0 pts).

🟢 ROCE has risen from 21.8% to 28.5% over 3 years (+6.7 pts).

🔴 Total Debt has grown at 2.2% a year over 3 years.

🟢 Free Cash Flow has grown at 28.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹15,433 Cr

Total Liabilities

₹4,384 Cr

Total Debt

₹417 Cr

Cash & Equivalents

₹232 Cr

Operating Cash Flow

₹2,828 Cr

Capex

-₹593 Cr

Shareholding (proxy)

Institutional Holding

16.2%

Insider Holding

69.3%

Corporate Actions

Next Earnings

28 Oct 2026

Dividend Rate

₹11.5

Ex-Dividend Date

23 Jul 2026

Analyst Consensus

Recommendations

16 Buy · 2 Hold · 3 Sell

Target Price (Mean)

₹1,776.81

+18.2% vs CMP

Target Range

₹1,400 – ₹2,065

Peer Comparison

Company	P/E	ROE
ASIAN PAINTS LIMITED	46.9x	22.3%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

1 positive1 mixed4 general

Pidilite Industries (NSEI:PIDILITIND) Stock Forecast & Analyst Predictions

Simply Wall Street, 09 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

PIDILITIND Outlook for the Week

Equitypandit, 09 Oct

Pidilite Industries Evaluates Product Pricing Strategy Amid Raw Material Inflation

Sahi, 14 Oct

Pidilite Industries (PIDILITIND) Share/Stock Price Live, NSE

TechGraph, 10 Oct

Pidilite Q1 Profit Jumps 30% to ₹884 Cr on Strong Volumes

HDFC Sky, 04 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Pidilite Industries - Positive Breakout: These 8 stocks cross above their 200 DMAs

The Economic Times, 16 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong17.9/20

🟢Financial HealthStrong13.9/20

🟢GrowthStrong13.1/20

🟢ProfitabilityStrong12.9/15

🔴ValuationDemanding6.7/15

🟢RiskLow6.9/10

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 22%24.5%
✓Revenue growth stays above 6% a year7.4% CAGR
✓Free cash flow remains positive₹2,236 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 25%28.5%