8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 1/28
11
Managerial Economics Prof
John
PIDILITE INDUSTRIES LIMITED
Since its inception in 1959, Pidilite Industries Limited
has been a pioneer in consumer and specialties
chemicals in India. Over two-third of the company’s
sales come from products and segments it has
pioneered in India. Their product range includes
Adhesives and Sealants, Construction and Paint
Chemicals, Automotive Chemicals, Art Materials, Industrial Adhesives,
Industrial and Textile Resins and Organic Pigments and Preparations. Most of
the products have been developed through strong in-house R&D. Pidilite
Industries is the market leader in adhesives and sealants, construction
chemicals, hobby colours and polymer emulsions in India. Pidilite ranks 131st
amongst the top 500 listed companies in India.
Their brand name Fevicol has become synonymous with adhesives to millions
in India and is ranked amongst the most trusted brands in India. Pidilite is also
growing its International presence through acquisitions and setting up
manufacturing facilities and sales offices in important regions around theworld.
The Company has 13 Overseas subsidiaries (4 direct and 9 step-down)
including those having significant manufacturing and selling operations in
USA, Brazil, Thailand, Dubai, Egypt and Bangladesh.
Values & Vision:
1. Be a business leader by promoting innovation and achieving Global
Standards.
2. Delight customers by offering quality products and services
3. Install a 'Can Do' attitude, nurture team spirit, learn continuously and
achieve a high
level of employee satisfaction.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 2/28
11
Managerial Economics Prof
John
4. Adopt ethical, safe and environment-friendly practices.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 3/28
11
Managerial Economics Prof
John
MAJOR BRANDS
Fevicol is synonymous with adhesives in India. Excellent
quality, extensive product range, close relations withcustomers and award winning advertisement have madeFevicol one of the most trusted brands in India and the largestselling adhesives brand in Asia.
Pidilite wholly owned subsidiary of Pidilite, acquired Cyclobrand in June 2006. The product range includes maintenance,performance and appearance products for DIY (Do-it-Yourself)
and professional car care segment.
Pidilite wholly owned subsidiary of Pidilite, acquired Sargent Art
brand in June2006. The products range includes crayons,tempera colours acrylic colours, markers, modelling clay andmany other products.
Pidilite offers a range of hobby & craft products under theHobby Ideas brand name. The products are complementedwith book, videos and training workshops to make hobby funand easy for hobby enthusiasts.
Pidilite offers a wide range of constructions chemicals underthe Dr. Fixit brand name. Dr. Fixit is market leader in retailmarket of construction chemicals and the products areavailable in all leading cement, hardware, and tile and paintshops.
Pidilite acquired Roff brand in 2004. Roff is a pioneer inconstruction chemicals in India and is well known for moderntile fixing solutions.
M-Seal is India's leading sealant brand. Pidilite offers a range of sealants forsealing, joining & repairing applications for both consumer & craftsmen marketunder M-Seal brand name. M-Seal is also gaining acceptance in internationalmarket.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 4/28
11
Managerial Economics Prof
John
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 5/28
11
Managerial Economics Prof
John
FINANCIAL OVERVIEW
(DOMESTIC-2009-10) The profitability of the Company significantly improved in the current
year(2009-2010) due to lower material costs, strengthening of Indian Rupee,
lower duties and control on costs. Sales growth picked up in the second half of
the year, due to improvement in economic conditions.
The Operating Profit and Net Profit, for the year at Rs 4132 million and Rs
2891 million increased by 60% and 97% respectively.
Income Tax for the current year at Rs 423 million is higher than Rs 150 million
(including Rs 28 million for Fringe Benefit Tax) in the previous year. In the last
year’s report, the Company had highlighted the impact of the economic
slowdown in India and abroad and its impact on the overall economic growth
rate and on particular segments in which the Company operates. The difficult
economic conditions continued in the first six months of current year and
improvement in growth rates was witnessed in the second half of the year.
However, there was substantial reduction in the input costs due to softening of
prices of commodity
chemicals and this together
with the strengthening of
the Indian Rupee, lower
duties and cost control
measures taken by the
Company have helped inimproving the year’s
performance.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 6/28
11
Managerial Economics Prof
John
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 7/28
11
Managerial Economics Prof
John
FINANCIAL OVERVIEW
(FOREIGN -2009-10)
The Brazilian subsidiary reported impressive results with 28% growth in
sales. This, together with lower material costs and control on costshelped the Company post cash profits for the year.
Operations in USA significantly reduced costs and improved margins.While overall sales remained flat, losses reduced by 38%.
The operations in Thailand posted cash profits on the back of 26%growth in sales.
During the year, Pidilite Industries Egypt, SAE and Pidilite SpecialtyChemicals Bangladesh Pvt Ltd commenced manufacturing operations in
Egypt and Bangladesh, respectively.
PIL Trading Egypt (LLC), a subsidiary of the Company’s step downsubsidiary (namely Pidilite Industries Egypt SAE), was incorporatedduring the year for the purpose of carrying on trading activities in Egypt,North Africa and COMESA countries.
The subsidiary in Bangladesh recorded profits in its first year of operations on the back of robust sales and good margins.
Performance of the subsidiary in Dubai was impacted by poor trading
conditions, resulting in losses.
In February 2010, Chemson Asia Pte Ltd merged with Pidilite InnovationCentre Pte. Ltd. (both wholly owned subsidiaries of PIPL).
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 8/28
11
Managerial Economics Prof
John
There was significant improvement in the performance of the overseas
subsidiaries with substantial reduction in losses due to measures taken to
improve sales and reduce costs.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 9/28
11
Managerial Economics Prof
John
SOURCES OF FUNDS
VALUE ADDITION
The Company’s net worth
(Equity Capital + Reserves) has
grown from Rs 4118 million in
2005-06 to Rs 9386 million at
the end of 2009-10, giving a
Compounded Annual Growth
Rate (CAGR) of 22.87%.
As the definition goes, Reserves
is the amount appropriated out
of earned surplus (retained earnings) for future planned or unforeseen
expenditure.
The company can use these reserves for the purpose of issue of BONUS
SHARES, Mergers and Acquisitions, expansion and diversification, etc. Sudden
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 10/28
11
Managerial Economics Prof
John
currency or interest rate changes can also be handled, as Pidilite has a good
amount of reserves locked up. Also the net sales, and hence the profits, of the
company has been going high, year after year. As a result, the retained
earnings with the company have accelerated too.
They can use the reserves for fulfilling their expansion and takeover plans,
which will need huge sums of money. Expansion plans of the company range
from opening up 50 additional “Dr.Fixit Service Centre”’ to meet the evolving
needs of contractors, builders and end-consumers with regard to providing
services such as waterproof treatment, ceramic tile fixing, sealing gaps, etc, to
opening up subsidiaries in many foreign countries, taking over their
international competitors,
investing in Research &
Development which has been,
over the years, responsible to
help Pidilite launch products
that are now market leaders in
their own fields.
The share prices of the
company also have been
soaring during the last five
years and will go on
increasing, considering their profits, market leadership in their area of
expertise, excess reserves, timely dividend payments, expansion plans,
corporate social responsibility, significant contribution to energy conservation,
etc.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 11/28
11
Managerial Economics Prof
John
The company’s goodwill is increasing, by every passing year.
MONTH SHARE PRICE(Rs) HIGH SHARE PRICE(Rs) LOW
April, , 2009 101.00 83.70
May, 2009 132.60 89.50
June, 2009 141.00 109.25
July, 2009 158.85 101.30
August, 2009 157.40 131.00
September, 2009 157.45 142.20
October, 2009 175.00 144.20
November, 2009 209.40 155.65
December, 2009 201.50 183.00
January, 2010 228.70 191.50
February, 2010 210.80 186.20
March, 2010 245.00 106.30
The share capital on the other hand has not increased significantly as the
owners need not pool in more funds, owing to the reserves which act as
general reserves, special reserves, cash subsidy reserves as well as capital
redemption reserves.
The market capitalization of the Company on 31st March 2010 was Rs 57876
million
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 12/28
11
Managerial Economics Prof
John
DEBT EQUITY
REASONS FOR INCREASE INDEBT IN 2007-2008
The company raised funds through FCCBs
in December 2007, so as to acquire a
Brazilian Company “Pulvitec do Brazil
Industria e comercio de colas e adesivos
Limitada” and M/S Hardcastle & Waud
Manufacturing Co. LTD. They also had a
Synthetic Elastomer Project in hand for
which they required Plant & Machinery,
Technology, Patents and Trademarks, etc. The finance for this project was also
made available through FCCBs.
FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)
In December 2007, the Company raised US $ 40 million through zero coupon
Foreign Currency Convertible Bonds. The Bonds have a yield to maturity of
6.75% per annum (calculated on a semiannual Basis), and are redeemable in
2012 i.e after 5 years and 1 day from closing date. The Bonds are convertible
into equity shares of the Company at any time after 9 January, 2008 until 23
November, 2012 at a price of Rs. 256.035 per share which represents a
premium of 30% to the closing price of the equity shares of Pidilite Industries
Limited on the Bombay Stock Exchange Limited (“BSE”) as of 2nd November,
2007. The Bonds have been issued at par and will be redeemed, if not
converted into shares, at 139.37% of par on maturity. The Bonds are listed on
the Singapore Exchange Securities Trading Limited and the shares to be
issued upon conversion of the Bonds will be listed on the NSE and BSE.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 13/28
11
Managerial Economics Prof
John
ACQUISITION IN BRAZIL
Pidilite Industries Ltd’s wholly owned subsidiary (WOS) in Brazil acquired in June 2007 entire share capital of “Pulvitec do Brazil Industria e comercio de
colas e adesivos Limitada” engaged in the business of adhesives, sealants and
construction chemicals. This Company and its manufacturing plant are located
in Sau Paulo, Brazil and the business has annual sales of approximately Rs.75
crores. This acquisition will help Pidilite enter high potential Latin American
market of adhesives and sealants.
M/S. HARDCASTLE & WAUD MANUFACTURING CO. LTD.
Pidilite Industries Ltd. acquired assets and business of branded sealants andadhesives from M/S. Hardcastle & Waud Manufacturing Co. Ltd., and
associates. The acquired assets include brands like Holdtite, Rustolene and
Leakgaurd, which have healthy market share in their respective segments.
The total annual sale of this business is Rs.15 crores.
SYNTHETIC ELASTOMER PROJECT
The Company entered into an agreement in June 2007 for acquisition of plant,
machinery, technology, patent & trademark of an international speciality
chemical company. The plant will manufacture synthetic elastomers. The plant
was located in Champaigner, France and was owned by Polymeri Europa
Elastomers, France.The company is in process of dismantling and shipping the
plant. The plant will be set up in a Special Economic Zone (SEZ) in Dahej in the
State of Gujarat in India. The plant is expected to commence commercial
production March 2010 and will have an initial capacity of 25,000
tons per annum. The capacity can be increased to 35,000 tons per annum by
debottlenecking. The total capital investment in the plant excluding
debottlenecking is estimated to be Rs. 5.3 Billion. The Company is likely to
incur total capital expenditure of Rs. 4.5 billion on this project over a period of next 18 months. The plant will have a capacity of 25,000 tons per annum. The
product has significant demand in international market and over 80% of
production will be sold in overseas market.
The company is also considering putting up Caustic Chlorine plant at an
additional investment of Rs. 0.9 Billion at the same location. Both Caustic and
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 14/28
11
Managerial Economics Prof
John
Chlorine are important inputs for the manufacture of Polychloroprene.
Polychloroprene Rubber is a specialty synthetic rubber featuring superior
mechanical strength load bearing capacity, adhesion to metal and weather, oil
and chemical resistant as compared to other synthetic rubbers. Over 80% of
the production is expected to be sold in overseas markets.
BUSINESS SEGMENTS
Pidilite Industries Limited (PIL) operates under three major business segments:
A] Branded consumer and bazaar/craftsmen products: This segment is a
major contributor to PIL’s revenue, which accounts for 73% to its total
turnover (standalone). The segment broadly constitutes Adhesives & Sealants,
Construction & Paint Chemicals and Art Material.
B] Industrial Specialty: This segment accounts for 21% of total sales. The
segment constitutes Industrial Adhesives, Industrial Resins & Organic
Pigments & Preparations, which largely cater to various industries such as
textiles, chemicals, FMCG, rubber, automobiles etc.
C] Others: Others segment constitutes VAM (Vinyl Acetate Monomer)
manufacturing unit, which was demerged into PIL w.e.f 1st April 2007. VAM is
a key raw material used by PIL (accounts for 20% of the total raw material
costs) for a wide range of adhesive products. VAM-based polymers are
commonly used in the production of plastics, films, laminating adhesives,
elastomers, inks, water-based emulsion paints, adhesives, acrylic fibers, glue,
cosmetics and personal care products, floor tiling, safety glass, building
construction, coatings. Recently the company has shut down its VAM plant,
since it became cheaper to import VAM rather than manufacturing.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 15/28
11
Managerial Economics Prof
John
The company has built a strong image of durability and quality for its
products. Almost all the products enjoy a near monopoly in their segments and
have a very large market share (approximately 60%). PIL has an extensive
distribution network of dealers, sales representatives, offices & retail outlets
spread throughout the country. The initial strategy of was to make carpenters
realise that only 1-2 % of cost of furniture goes for adhesive. They approached
carpenters directly and this direct marketing was one of the most successful
strategies employed. It also has a wide range of products which find
applications in number of areas.
Range of Products Applications
Adhesive and Sealants, Construction &
Paints, Automative chemicals, Art materials,
Industrial adhesive, Industrial and textile
resins
Construction, plastic, textiles, paper, leather,
paints & engg. Industries.
“Fevicol” is the largest selling adhesive brand in India. Dr.Fixit is the leading
brand in construction segment. Strong brand image, client relationship,
research and development and extensive distribution network are the key
drivers of company’s sales.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 16/28
11
Managerial Economics Prof
John
RESEARCH & DEVELOPMENT (R&D)
SPECIFIC AREAS IN WHICH R&D IS CARRIED OUT BY THE COMPANY:
R&D activities are carried out for development of new products, improvement
of existing products in the category of Synthetic Resins, Adhesives, Sealants,
Pigments and Pigment Dispersions, Intermediates, Surfactants, Art Materials,
Coatings, Fabric Care Products, Construction Chemicals, Maintenance
Chemicals, Emulsion Polymers, Vinyl Acetate Monomer etc.
BENEFITS DERIVED AS A RESULT OF THE ABOVE R&D:
Increase in sales due to product improvements and introduction of new
products; reduction in cost due to formulation
optimization, process improvements and cycle time reduction.
FUTURE PLAN OF ACTION:
Future R&D efforts will continue along present lines.
Year ended 31st March 2010 Year ended 31st March 2009
Capital 5.35 5.23
Recurring 87.60 77.81
TOTAL 92.95 83.04
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 17/28
11
Managerial Economics Prof
John
NET SALES
During 2005-06, PIL invested over $4
mn for establishing and expanding its
subsidiaries abroad. PIL acquired
Chemson Asia Pte Ltd, a Singapore-
based company engaged in the
business of manufacturing waterproof
coating and emulsion paints, thereby
adding to its existing, and rapidly-growing construction chemicals and
paints range.
The company also took over two other
construction chemical companies viz Jupiter Chemicals, a Dubai based
company & Pidilite Bamco (Thailand) to get entry in their markets and to
acquire technology with potential in India. Also acquired the Fine Art brand of
canvas & student art colours. This move helped PIL to strengthen its position
in the art materials market and helped it in boosting its sales in the school &
artist segments. PIL acquired Sargent Art, an education art materials company
(USA) & Cyclo, a car-care products manufacturer to get entry in high potential
USA market. PIL acquired assets and business of brands like Holdtite,
Rustolene and Leakgaurd, which have a very healthy market share in their
respective segments.
In FY08, Pidilite do Brasil, wholly-owned subsidiary of PIL in Brazil, acquired the
entire share capital of Pulvitec do Brasil Industrie e Commercio de Colas e
Adesivos Limitada, engaged in the business of adhesives, sealants and
construction chemicals. This acquisition has helped Pidilite enter high potential
Latin American market of adhesives and sealants.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 18/28
11
Managerial Economics Prof
John
In FY09, operations of subsidiaries in UAE, Indonesia & South East Asia were
curtailed vying the environmental conditions. Subsidiaries showed good
revenues but disappointed on profitability front, reporting losses due to steep
input costs. Brazilian subsidiary had been impacted due to slowdown in Brazil.
The automotive chemical business and education art material company in USA
got affected due to issues of US slowdown. In 2009, PIL established adhesives
manufacturing facility in Bangladesh and Egypt to cater to growing volumes.
In FY10, Brazilian subsidiary showed good improvement on Q1 & Q2 as
compared to FY09. The subsidiary currently sells adhesive under local brands.
Company plans to market the products under ‘Fevicol’ brand name which willhelp in boosting sales.
Conclusion and Recommendations:
1. PIL net sales have grown at CAGR 24.8% over FY06-FY10.
2. Major factors for growth are growing demand in economy and user
industries.
3. Expected growth rate in following years less compared to previous
years. One of the reasons is shut down of VAM plant.
4. Also, consumer & bazaar and industrial products performed well.
Consumer & Bazaar will remain the main contributors.
5. Industry specialty segment expected to do well considering increase in
demand for industrial adhesives, industrial resins and organic pigments.
6. Also as and when VAM & Synthetic polymer operations resume, the
sales growth would be much higher going forward.
7. Improvement being witnessed in PIL’s subsidiaries especially US and
Brazil which contribute 85% of total subsidiaries turnover.
EXPECTED SALES:
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 19/28
11
Managerial Economics Prof
John
DIVIDENDPAYOUT
The year 2009-10 is the Golden Jubilee
year of the Company and recognizing
its significance, the Company has
issued bonus equity shares in the ratio of 1:1 in March 2010. The Board has
also recommended a Golden Jubilee Special Dividend of Re 0.50 per equity
share on the enhanced share capital after bonus Issue. The Company has
reached its present position with the support of its valued customers and all
stakeholders. The Company places on record its deep appreciation for their
support.
Term Finances
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 20/28
11
Managerial Economics Prof
John
The Company had borrowed US $ 17 million through an ECB Term loan
amounting to Rs 796.2 million, repayable in 3 annual installments. During the
year the Company has repaid the 1st of the 3 annual installments amounting
to US $ 5.67 million equivalent to Rs 262.9 million.
The Dividend paid for the year 2005-06 was Rs. 360 million including tax on
dividend; this is approximately 39.7% of the earnings of the year. The dividend
declared was Rs. 1.25 per share & the company has earned 2.5 times dividend
cover in this year.
The Dividend paid for the year 2006-07 was Rs. 443 million including tax on
dividend; this is approximately 36.9% of the earnings of the year. The dividenddeclared was Rs. 1.50 per share & the company has earned 2.7 times dividend
cover in this year.
The Dividend paid for the year 2007-08 was Rs. 518 million including tax on
dividend; this is approximately 27.5% of the earnings of the year. The dividend
declared was Rs. 1.75 per share & the company has earned 3.6 times dividend
cover in this year.
The Dividend paid for the year 2008-09 was Rs. 518 million including tax on
dividend; this is approximately 35.4% of the earnings of the year. The dividend
declared was Rs. 1.75 per share which is the same as the previous year & the
company has earned 2.8 times dividend cover in this year.
The Dividend paid for the year 2009-10 was Rs. 885 million; this is on the
enhanced capital base on account of bonus equity shares issued during the
year, in the ratio of 1:1. The dividend payout is approximately 39.7% of the
earnings of the year. The dividend declared was Rs. 1.50 per equity share
including Golden Jubilee Special Dividend of Re 0.50 per share & the company
has earned 3.3 times dividend cover in this year.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 21/28
11
Managerial Economics Prof
John
Out of the current year’s profit, on 506.1 million equity shares of Re 1 each
(enhanced on account of bonus equity shares issued during the year)
(previous year @ Rs 1.75 per equity share on 253.1 million equity shares of Re
1 each), amounting to Rs 759.2 million (previous year Rs 442.9 million). The
dividend for the current year will be free of tax in the hands of shareholders.
The dividend payout amount has grown at a CAGR of 24.7% during
the last 5 years.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 22/28
11
Managerial Economics Prof
John
CURRENT RATIO
The current ratio is a ratio of current
assets to current liabilities. It describes
the liquidity position of the company.
In the year 2005-06, the current assets
are 3059 million and current liabilities
are 1384 million which gives us a
current ratio of 2.2 approximately. This
ratio increases to 2.3 in the financial
year 2006-07 due to increase in
current assets. It should be noted that
the current liabilities have also
increased but the current assets have grown by a larger margin. The current
ratio for the year is 2.3
2007-08 saw a major increase in current assets which pushed the Current
Ratio from 2.3 to 3.1, inspite of the small increase in current liabilities. Theyear 2008-09 witnessed a minor drop in current assets, but a drastic increase
in current liabilities. Thus making the current ratio fall from 3.1 to 2.5
In the financial year ended March 2010, the annual report declared a drop in
the current ratio from 2.5 to 1.5, this is due to the fall in current assets & the
major rise in the current liabilities.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 23/28
11
Managerial Economics Prof
John
As can be seen from above, the reduction in Debtors from the previous year,
suggest a comparative fair retutn on investments and hence a less risk of bad
dabts. Also the increase in loans given by the company from 868 million to
962 million, shows not only a positive CSR as well as responsible side of the
company, but it also shows that the company will be earning a good andsizeable interest on loans.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 24/28
11
Managerial Economics Prof
John
SCOPE OF THE COMPANY
NEW PRODUCTS
In the adhesives category the Company has started expanding its range of
products by introducing new products for the joinery segment. These products
are used in mechanized joinery and modular furniture units. During the year
the Company acquired the retail wood working brand of Henkel, i.e. Woodlok.
Products under this brand were relaunched in select markets in the second
half of the year.
The Company has started expanding its range of Dr. Fixit Flooring Solutions for
use in industrial and commercial flooring. Superior grades of Tile Fixing
Products were introduced under Roff brand during the year. The Company has
introduced the SMARTCARE range of products for healthcare & hospitality
segments.
M Seal Super, a versatile epoxy putty meant for DIY applications which can be
used in both wet and dry conditions, was introduced during the year.
In the Arts & Stationary range several innovative products/modifications were
introduced to serve consumers better. Fevistik Blue and Fevistik Purple are
new introductions. Unlike regular white glue, these colored sticks, when
applied, appear colored but the colour disappears after a few seconds
enabling young children to see and control the application of glue.
New products launched during 2009-10 in the Industrial Products segment
range include Binders for water based links and overprint varnishes. A high
performance binder was introduced for decorative texture paints. In the
leather product range an important addition was made in the form of highperformance up gradation
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 25/28
11
Managerial Economics Prof
John
CONCLUSION
Pidilite Industries Limited on a stand-alone basis achieved 10% growth in net
sales.
However, excluding the sales from the “Others” segment, net sales growth
was 15%. Earnings
before depreciation,
interest, tax and
foreign exchange loss
increased by 60%,
profit before tax (PBT)
increased by 102% and
profit after tax (PAT)
increased by 97% on a
stand-alone basis.
The Company’s sales have grown at a CAGR of 18% over the last five years.
On a consolidated basis, Pidilite net sales grew by 10%, PBT increased by
144% and PAT increased by 144%. Overseas Subsidiaries reduced losses inthe current year due to reduction in costsand improved economic conditions.
EARNING PER SHARE-
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 26/28
11
Managerial Economics Prof
John
Book value per share & earning per share for the years 2005-06 to 2008-09
have been restated for the 1:1 bonus issue made in 2009-10.
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 27/28
11
Managerial Economics Prof
John
RETURN ON CAPITAL EMPLOYED= PBIT / Avg. Capital
Employed
DIVIDEND PAY OUT= Dividend/PAT
8/2/2019 Pidilite Industries Limited Final
http://slidepdf.com/reader/full/pidilite-industries-limited-final 28/28
Managerial Economics Prof
John
KEY INITIATIVES TAKEN BY THECOMPANY TO MAITNAIN THEIR
GOODWILL
SALES AND MARKETING:
Building network and product range for growth in semi urban and rural
markets –economy range, small packs and new products.
Back end operations strengthened through centralization
Focus on value added services to WSS
SUPPLY CHAIN:
Professionalizing CFA operations
Close monitoring and control on working capital
HUMAN RESOURCES:
Quality manpower recruited at senior levels to build long term capability
Renewed focus on Learning and Development
Non family professionals now occupying many key senior positions in the
company and their number and role is likely to increase.