Should you buy, sell or hold Fevicol glue maker's stock after mixed Q4 show?

Pidilite share price market news: Pidilite Industries shares suffered sharp losses on Wednesday, a day after the popular manufacturer of adhesives, sealants and construction materials staged a mixed financial performance for the fourth and final quarter of FY24. Mumbai-based Pidilite, whose popular brands include Fevicol and M-Seal, however, remained optimistic about market demand prospects in the medium term. 

The Pidilite stock (PIDILITIND) weakened by Rs 134.1, or 4.5 per cent, to end at Rs 2,816.6 apiece on BSE, after falling as much as 5.9 per cent to Rs 2,777.1 apiece in intraday trade.

Pidilite Industries Q4 FY24 results

Pidilite Industries' consolidated net profit for the March quarter increased 19.3 per cent on a year-on-year basis to Rs 364 crore while revenue grew 7.9 per cent to Rs 2,902 crore, according to a regulatory filing. 

Its quarterly margin improved by 240 basis points to 19.5 per cent. 

“At Pidilite, we delivered robust double-digit Underlying Volume Growth (UVG) as well as substantial improvement in profitability, both for the quarter as well as FY24. Continued investment in our brands, growth and capability initiatives as well as moderation in input prices contributed to this strong performance," said Bharat Puri, Managing Director, Pidilite Industries.

Pidilite's net profit for the financial year 2023-24 increased 36 per cent to Rs 1,747 crore while net sales grew 5.0 per cent to Rs 12,337 crore. 

While there may be short-term softness in the environment in the near term, the company remains optimistic about market demand in the medium term, with an overall increase in construction activities, government spending and increasing prosperity, Puri added. Read more about Pidilite Q4 results

How brokerages view Pidilite after Fevicol maker's Q4 earnings announcement

Foreign brokerages Citi and Macquarie maintained their negative views on the stock after the earnings announcement.

Citi maintained its 'sell' rating for Pidilite with a target of Rs 2,200 per share, implying a downside of more than 25 per cent from the current price, stating that the Fevicol maker's earnings missed its estimates on all fronts. 

The brokerage pointed out that Pidilite's quarterly EBITDA and PAT (before exceptional items) were short of its estimates by 14 per cent and 20 per cent, respectively.  

Macquarie continued with its 'underperform' rating for Pidilite Industries with a target price of Rs 2,300.

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