homemarket Newsstocks NewsConsumer stock focus: Bullish on Pidilite, Marico upside limited, says Nuvama Instl Equities
Consumer stock focus: Bullish on Pidilite, Marico upside limited, says Nuvama Instl Equities
In an interview with CNBC-TV18, Abneesh Roy, Executive Director of Nuvama Institutional Equities said that Pidilite may see buying if its stock falls.
Pidilite Industries, a manufacturer of adhesives and construction chemicals, may see buying if its stock falls. However, the company will see the full benefit of margin expansion in the financial year 2024. This is likely due to Pidilite's recent investments in its supply chain and distribution network, which should result in greater efficiency and cost savings. Additionally, Pidilite's entry into the decorative paints segment reflects a larger trend in the industry.
In an interview with CNBC-TV18, Abneesh Roy, Executive Director of Nuvama Institutional Equities said that Pidilite may see buying if its stock falls.
“The EBITDA growth for Pidilite will be strong. Pidilite has also entered decorative paints, which we think is a step in the right direction. But we don't think that Pidilite will be spending very high on advertising. It's just through the existing distribution and channels, they will try to sell incremental paints. It will not be a cutthroat battle with the market leaders,” said Roy.
In addition to its traditional product lines, Pidilite has also entered the decorative paints segment. This move mirrors the strategy of another consumer goods company, Marico. However, Roy believes that the near-term upside for Marico is limited, and he prefers Britannia over Marico at current levels.
Talking about Marico, he said, “We like Marico from a longer-term perspective, but given the recent move, the near-term upside will be limited. In fact, we prefer Britannia over Marico given the numbers Britannia reported with 12 percent profit after tax (Pat) growth, but Marico’s margin performance was decent.”
It's interesting to note how companies in the consumer goods industry are diversifying their product offerings to stay competitive. Pidilite's entry into the decorative paints segment is just one example of this trend. However, it's important for investors to consider the potential upside and limitations of these moves when making investment decisions.
For more details, watch the accompanying video
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
PM Modi offers prayers at Dashashwamedh Ghat, takes cruise trip to Namo Ghat ahead of filing nomination
May 14, 2024 10:15 AM
Lok Sabha elections: 4th phase sees over 68% voter participation, West Bengal leads with 76% turnout
May 14, 2024 1:47 AM