Sticking to stocks for a long period of time has helped many investors make fortunes, especially when the fundamentals of a company are strong. The stock market tends to compound investments over a long period of time.
The shares of Pidilite Industries Limited were available at ₹ 11.39 apiece twenty years ago. Its shares closed at ₹ 2525.00 apiece on Friday on the National Stock Exchange.
Since then, its share price has increased by a whopping 22068.57 per cent to give multibagger returns to its shareholders. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares twenty years ago, the value of their holdings would have been ₹ 2.22 crores today!
Pidilite Industries is a leading manufacturer of adhesives, sealants, construction chemicals and polymer emulsions in India. Some of its major brands include Fevicol, Dr. Fixit, Fevi-Kwik, M-Seal, Roff, and Chemifix. In fact, its brand Fevicol has become synonymous with adhesives to millions of people and is ranked amongst the most trusted brands in India.
It is a large-cap company with a market capitalization of ₹ 1,27,995 crores. It has an ideal return on equity of 20.13 per cent and an ideal debt-to-equity ratio of 0.10. Its shares are currently trading at a price-to-equity ratio (P/E) of 98.58, which is significantly higher than the industry P/E of 13.13, therefore the stock might be overvalued. This could mean that investors are willing to pay a higher price for the company’s future earnings.
Pidilite Industries has a high promoter holding of 69.94 per cent. Further, 11.34 per cent of its shares are held by Foreign Institutional Investors (FIIs), 11.25 per cent is held by retail investors, Domestic Institutional Investors (DIIs) hold 3.34 per cent and mutual funds have a 4.04 per cent stake in it.
Written by Simran Bafna
Disclaimer
The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
