March 19, 2025
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Nuvama sees 35% upside in Pidilite
Nuvama Institutional Equities glued the ‘Buy’ rating, with a target price of Rs 3,660 on Pidilite Industries after attending the company’s analyst meeting. The brokerage is confident in the company due to its continued focus on white spaces, headroom in tile adhesives, strong growth potential in the waterproofing segment, and emerging markets.
According to the research note, the waterproof segment, better known as Dr. Fixit, has the potential to grow by 50%,
Strong outlook for tile adhesives
Moving forward to the tile adhesive category, the headroom to grow in tile adhesives is immense as only 25% of customers use tile adhesives for fixing tiles. “Roff” shall be a market maker in tile and stone solutions with a market size of Rs 2,500–3,000 crore. Penetration of this category is estimated at 18–20% as the majority of the market still uses cement to fix tiles. Pidilite Industries is collaborating in tile adhesive, marble finishing, and grouting and expanding plant capacity for Roff products to be closer to the market. The tile and stone market is shifting towards tile adhesives due to their stronger bonding compared with cement. This is because increased penetration of vitrified tiles, being non-porous and larger, poses challenges while thinner tiles are becoming more common.
Scaling up in global markets
The company’s focus on international business is growing. The company plans to scale up its presence in Saudi Arabia over time. It is already doing business in more than 70 countries through its seven international subsidiaries.
The adhesive stock has dropped its value by 5% in the past one year.
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