Adhesives maker Pidilite Industries' stock has made its investors wealthy over the last five years. The maker of brands such as Fevicol, Dr Fixit, Cyclo, hobby ideas, Roff and M-Seal has clocked 414% returns during the last five years.
If you would have invested Rs 1 lakh into the stock exactly five years ago, it would have grown to Rs 5,14,018 today.
Currently, the stock is trading at 1,155 level. Five years ago, it stood at 224.70 level. The stock has gained 40% during the last one year and 29.14% since the beginning of this year. The large cap stock has a beta of 0.78 with Sensex.
The firm has reported a steady rise in net profit over the past five years. Net profit rose 115.07% to Rs 961.50 crore for March 2018 fiscal compared to Rs 447.05 crore net profit for the fiscal ending March 2014.
The firm posted 45.96% rise in net sales to Rs 6,218.76 crore for the quarter ending March 2018 compared to Rs 4,260.59 crore sales for the quarter ended March 2014.
Earnings per share (EPS) stood at Rs 18.95 for March 2018 fiscal compared to Rs 8.77 for the fiscal ended March 2014.
The firm reported 23.48% rise in net profit to Rs 1,834.07 crore for the quarter ended June 2018 compared to Rs 1,485.31 crore for the quarter ended March 2018. However, consolidated net profit fell 2.23% to Rs 240.36 crore for the quarter ended June 2018 compared to Rs 246.70 crore for March 2018 quarter.
The producer of adhesives, sealants, polymer emulsions, hobby colours and construction chemicals is the market leader in the industry.
Brokerage Anand Rathi in a report said, "Pidilite Industries is expected to grow its revenues at a compounded annual growth rate (CAGR) of 15.8% from FY-19 estimates through FY-20 estimated. Its consolidated revenues are expected to be around Rs 8,156.4 crore by FY20E.
The growth in revenues has slowed down in FY-17 due to impact of demonetisation in the H2 and broader slowdown in industrial activity in construction segment.
However, growth has picked up gradually in the subsequent financial year and is expected to further strengthen in coming years."
The brokerage has given a buy call with target price of Rs 1,345 per share.