Pidilite Industries Ltd (PIDI IN) - BBG Adjusted

In Millions of INR except Per Share FY 2017 FY 2018 FY 2019 FY 2020

12 Months Ending 03/31/2017 03/31/2018 03/31/2019 03/31/2020
Revenue 55,879.10 60,324.00 70,348.00 72,541.60
+ Sales & Services Revenue 55,879.10 60,324.00 70,348.00 72,541.60
+ Other Revenue — — — —
Gross Profit — — — —
+ Other Operating Income 288.8 460.1 439.4 403.1
- Operating Expenses 44,618.20 48,534.00 58,328.80 58,315.70
+ Selling & Marketing 2,130.30 2,273.90 2,419.50 2,949.80
+ Research & Development 336.5 517.1 648.9 727.2
+ Depreciation & Amortization 1,151.40 1,198.80 1,327.40 1,699.20
+ Prov For Doubtful Accts 42.7 227.9 97.8 84.5
+ Other Operating Expense 40,957.30 44,316.30 53,835.20 52,855.00
Operating Income (Loss) 11,549.70 12,250.10 12,458.60 14,629.00
- Non-Operating (Income) Loss -185.4 -413.7 -101 -74.6
+ Interest Expense, Net 8.3 4.2 -131 51.3
+ Interest Expense 67.2 78.6 75 175.9
- Interest Income 58.9 74.4 206 124.6
+ Other Investment (Inc) Loss -71.5 -155.8 -100.2 -115.9
+ Foreign Exch (Gain) Loss 82.2 36.7 79.6 41.3
+ (Income) Loss from Affiliates -53 -45.9 -36 -30.3
+ Other Non-Op (Income) Loss -151.4 -252.9 86.6 -21
Pretax Income (Loss), Adjusted 11,735.10 12,663.80 12,559.60 14,703.60
- Abnormal Losses (Gains) -747.6 -924.2 -856.6 5.9
+ Disposal of Assets 21 — 24.3 —
+ Asset Write-Down — — — 551.9
+ Impairment of Goodwill — — — —
+ Sale of Investments -768.6 -924.2 -880.9 -1,097.90
+ Unrealized Investments — — — —
+ Other Abnormal Items — — — 551.9
Pretax Income (Loss), GAAP 12,482.70 13,588.00 13,416.20 14,697.70
- Income Tax Expense (Benefit) 3,850.50 3,927.10 4,132.30 3,477.20
+ Current Income Tax 3,752.80 3,740.80 4,065.80 3,839.90
+ Deferred Income Tax 97.7 186.3 66.5 -362.7
+ Tax Allowance/Credit — — — —
- (Income) Loss from Affiliates — — — —
Income (Loss) from Cont Ops 8,632.20 9,660.90 9,283.90 11,220.50
- Net Extraordinary Losses (Gains) 0 0 0 0
+ Discontinued Operations 0 0 0 0
+ XO & Accounting Changes 0 0 0 0
Income (Loss) Incl. MI 8,632.20 9,660.90 9,283.90 11,220.50
- Minority Interest 32.3 37.4 34.8 56.3
Net Income, GAAP 8,599.90 9,623.50 9,249.10 11,164.20
- Preferred Dividends 0 0 0 0
- Other Adjustments 0 0 0 0
Net Income Avail to Common, GAAP 8,599.90 9,623.50 9,249.10 11,164.20

Net Income Avail to Common, Adj 8,076.60 8,976.60 8,649.50 11,168.30

Net Abnormal Losses (Gains) -523.3 -646.9 -599.6 4.1
Net Extraordinary Losses (Gains) 0 0 0 0

Basic Weighted Avg Shares 512.7 507.9 507.9 508

Basic EPS, GAAP 16.77 18.95 18.21 21.98
Basic EPS from Cont Ops, GAAP 16.77 18.95 18.21 21.98
Basic EPS from Cont Ops, Adjusted 15.75 17.68 17.03 21.99

Diluted Weighted Avg Shares 513 508.1 508.2 508.2

Diluted EPS, GAAP 16.77 18.94 18.2 21.97
Diluted EPS from Cont Ops, GAAP 16.77 18.94 18.2 21.97
Diluted EPS from Cont Ops, Adjusted 15.75 17.67 17.02 21.98

Reference Items
Accounting Standard IN GAAP IN GAAP IN GAAP IN GAAP
EBITDA 12,701.10 13,448.90 13,786.00 16,328.20
EBITDA Margin (T12M) 22.73 22.29 19.6 22.51
EBITA 11,731.60 12,460.50 12,728.10 15,143.60
EBIT 11,549.70 12,250.10 12,458.60 14,629.00
Gross Margin — — — —
Operating Margin 20.67 20.31 17.71 20.17
Profit Margin 14.45 14.88 12.3 15.4
Current Profit — — — —
Sales per Employee — — 12,251,480.32 11,962,664.91
Dividends per Share 4.75 6 6.5 7
Total Cash Common Dividends 2,435.20 3,046.90 3,301.90 3,556.90
Capitalized Interest Expense — — — —
Personnel Expenses 6,452.70 7,124.00 8,366.60 9,272.20
Export Sales — — — —
Depreciation Expense 969.5 988.4 1,057.90 1,184.60
Rental Expense 431.9 435.5 489.5 203.5
Source: Bloomberg
FY 2021
03/31/2021
72,509.20
72,509.20
—
—
417.9
58,449.10
1,727.50
723.1
2,006.60
110.1
53,881.80
14,478.00
-35.2
66
234.4
168.4
-11.3
23.7
-39.8
-73.8
14,513.20
-711.7
57.3
-402.6
—
-402.6
36.2
— Tax Rate %
15,224.90
3,963.60 0.308467 0.289012 0.308008 0.236581 0.260337
3,998.80
-35.2
—
—
11,261.30
0
0
0
11,261.30
-50.8
 11,312.10
0
0
11,312.10

10,813.90
-498.2
0

508.1
22.26
22.26
21.28

508.6
22.24
22.24
21.26

IN GAAP
16,484.60
22.73
15,083.20
14,478.00
—
19.97
14.91
—
11,372,208.28
6.5
3,303.00
—
9,808.60
—
1,401.40
216.7
Pidilite Industries Ltd (PIDI IN) - Standardized

In Millions of INR except Per Share FY 2017 FY 2018 FY 2019 FY 2020

12 Months Ending 03/31/2017 03/31/2018 03/31/2019 03/31/2020
Total Assets
+ Cash, Cash Equivalents & STI 14,897.50 12,785.00 13,418.30 14,229.80
+ Cash & Cash Equivalents 999.4 1,635.80 1,904.30 7,032.50
+ ST Investments 13,898.10 11,149.20 11,514.00 7,197.30
+ Accounts & Notes Receiv 7,685.40 9,381.30 10,560.10 10,885.00
+ Accounts Receivable, Net 7,685.40 9,381.30 10,560.10 10,885.00
+ Notes Receivable, Net 0 0 0 0
+ Inventories 7,208.60 8,043.30 9,344.50 9,294.70
+ Raw Materials 2,737.20 3,516.30 4,047.20 4,204.40
+ Work In Process 564.3 668.4 840.2 787.5
+ Finished Goods 3,871.70 3,818.40 4,398.70 4,239.20
+ Other Inventory 35.4 40.2 58.4 63.6
+ Other ST Assets 1,548.40 2,878.20 2,497.10 3,200.00
+ Prepaid Expenses 146.2 111.3 131 143.3
+ Derivative & Hedging Assets — 0 0 0
+ Assets Held-for-Sale 0 63.5 0—
+ Taxes Receivable — — 26.2 19.3
+ Misc ST Assets 1,402.20 2,703.40 2,339.90 3,037.40
Total Current Assets 31,339.90 33,087.80 35,820.00 37,609.50
+ Property, Plant & Equip, Net 9,368.30 10,303.20 11,554.50 15,482.80
+ Property, Plant & Equip 17,615.40 19,429.20 21,399.90 26,425.70
- Accumulated Depreciation 8,247.10 9,126.00 9,845.40 10,942.90
+ LT Investments & Receivables 312.7 1,059.90 3,718.70 4,452.50
+ LT Investments 312.7 1,059.90 3,718.70 4,452.50
+ Other LT Assets 6,721.00 7,593.70 8,051.90 7,812.20
+ Total Intangible Assets 4,861.30 5,396.00 5,342.90 5,177.60
+ Goodwill 1,338.30 1,774.20 1,849.90 1,840.30
+ Other Intangible Assets 3,523.00 3,621.80 3,493.00 3,337.30
+ Prepaid Expense 435.6 426.3 415.3 —
+ Deferred Tax Assets 37.6 58.6 107.2 130
+ Derivative & Hedging Assets — 0 0 0
+ Investments in Affiliates 220.2 250.3 244.3 253
+ Misc LT Assets 1,166.30 1,462.50 1,942.20 2,251.60
Total Noncurrent Assets 16,402.00 18,956.80 23,325.10 27,747.50
Total Assets 47,741.90 52,044.60 59,145.10 65,357.00

Liabilities & Shareholders' Equity

+ Payables & Accruals 4,044.00 5,566.70 5,991.60 6,465.10
+ Accounts Payable 3,903.20 5,438.10 5,806.40 6,210.10
+ Accrued Taxes — — — 86.7
 + Interest & Dividends Payable — — — —
+ Other Payables & Accruals 140.8 128.6 185.2 168.3
+ ST Debt 926.6 1,154.40 1,025.40 1,723.80
+ ST Borrowings 926.6 1,154.40 1,025.40 1,439.90
+ ST Lease Liabilities 0 0 0 283.9
+ ST Finance Leases 0 0 0—
+ Current Portion of LT Debt — — — —
+ Other ST Liabilities 5,253.50 5,361.20 5,990.10 7,958.40
+ Deferred Revenue — 0 0 0
+ Derivatives & Hedging — 0 0 0
+ Misc ST Liabilities 5,253.50 5,361.20 5,990.10 7,958.40
Total Current Liabilities 10,224.10 12,082.30 13,007.10 16,147.30
+ LT Debt 48.5 71.1 85.1 1,082.10
+ LT Borrowings 48.5 71.1 85.1 251.3
+ LT Lease Liabilities 0 0 0 830.8
+ LT Finance Leases 0 0 0—
+ Other LT Liabilities 1,487.00 2,400.70 2,500.50 1,415.00
+ Accrued Liabilities — 0 0 0
+ Pension Liabilities 289 351.2 429.6 511.6
+ Pensions — — — —
+ Other Post-Ret Benefits — — — —
+ Deferred Revenue — 0 0 0
+ Deferred Tax Liabilities 914.7 1,106.60 1,201.40 822.9
+ Derivatives & Hedging — 0 0 0
+ Misc LT Liabilities 283.3 942.9 869.5 80.5
Total Noncurrent Liabilities 1,535.50 2,471.80 2,585.60 2,497.10
Total Liabilities 11,759.60 14,554.10 15,592.70 18,644.40
+ Preferred Equity and Hybrid Capital 0 0 0 0
+ Share Capital & APIC 1,176.30 507.8 608.1 740.2
+ Common Stock 512.7 507.8 508 508.1
+ Additional Paid in Capital 663.6 0 100.1 232.1
- Treasury Stock 0 0 0 0
+ Retained Earnings 15,668.70 21,693.60 27,257.10 30,043.00
+ Other Equity 17,864.10 13,539.00 13,615.70 13,772.90
Equity Before Minority Interest 34,709.10 35,740.40 41,480.90 44,556.10
+ Minority/Non Controlling Interest 1,273.20 1,750.10 2,071.50 2,156.50
Total Equity 35,982.30 37,490.50 43,552.40 46,712.60
Total Liabilities & Equity 47,741.90 52,044.60 59,145.10 65,357.00

Reference Items
Accounting Standard IN GAAP IN GAAP IN GAAP IN GAAP
Shares Outstanding 512.7 507.8 508 508.1
Number of Treasury Shares 0 0 0 0
Pension Obligations 289 351.2 429.6 511.6
Future Minimum Operating Lease Obligations 207.3 358.8 335.3 —
Capital Leases - Total 0 0 0—
Percent Of Foreign Ownership 12.09 10.37 11.71 11.5
Number Of Shareholders 92,084.00 95,867.00 115,008.00 185,738.00
Options Granted During Period 0.1 0.1 0.3 0
Options Outstanding at Period End 0.3 0.2 0.3 0.2
Net Debt -13,922.40 -11,559.50 -12,307.80 -11,423.90
Net Debt to Equity -38.69 -30.83 -28.26 -24.46
Tangible Common Equity Ratio 69.61 65.05 67.17 65.44
Current Ratio 3.07 2.74 2.75 2.33
Cash Conversion Cycle 89.69 90.7 84.27 89.85
Number of Employees — — 5,742.00 6,064.00
Source: Bloomberg
FY 2021
03/31/2021

6,302.90
4,486.20
1,816.70
13,210.20
13,210.20
0
12,341.50
5,983.80
949.8
5,319.90
88
3,299.10
141.3
0
—
31.3
3,126.50
35,153.70
17,367.10
29,349.20
11,982.10
6,141.90
6,141.90
29,641.50
27,742.60
12,839.50
14,903.10
—
165.9
0
281.1
1,451.90
53,150.50
88,304.20

10,537.00
10,067.40
250.2
—
219.4
2,292.20
2,015.10
277.1
—
—
11,517.90
0
0
11,517.90
24,347.10
930.7
123.9
806.8
—
4,696.40
0
573.1
—
—
0
3,980.30
0
143
5,627.10
29,974.20
0
768.6
508.2
260.4
0
41,347.80
13,813.20
55,929.60
2,400.40
58,330.00
88,304.20

IN GAAP
508.2
0
573.1
—
—
11.88
285,878.00
0.3
0.4
-3,080.00
-5.28
46.54
1.44
95.44
6,376.00
Pidilite Industries Ltd (PIDI IN) - Standardized

In Millions of INR except Per Share FY 2017 FY 2018 FY 2019 FY 2020

12 Months Ending 03/31/2017 03/31/2018 03/31/2019 03/31/2020
Cash from Operating Activities
+ Net Income 8,599.90 9,623.50 9,249.10 11,164.20
+ Depreciation & Amortization 1,151.40 1,198.80 1,327.40 1,699.20
+ Non-Cash Items -799.5 -1,026.80 -446.5 -1,400.00
+ Stock-Based Compensation 78 52.4 106.4 144.4
+ Other Non-Cash Adj -877.5 -1,079.20 -552.9 -1,544.40
+ Chg in Non-Cash Work Cap -1,023.20 -1,756.40 -1,655.40 1,318.70
+ (Inc) Dec in Accts Receiv — -1,483.00 -1,270.20 -375.8
+ (Inc) Dec in Inventories -817.4 -637.3 -1,355.60 0.2
+ Inc (Dec) in Accts Payable 152.7 1,297.10 307 417
+ Inc (Dec) in Other -358.5 -933.2 663.4 1,277.30
+ Net Cash From Disc Ops 0 0 0 0
Cash from Operating Activities 7,928.60 8,039.10 8,474.60 12,782.10

Cash from Investing Activities

+ Change in Fixed & Intang -1,224.20 -1,760.00 -2,537.50 -4,439.30
+ Disp in Fixed & Intang 106.4 8.3 87.7 232
+ Disp of Fixed Prod Assets 106.4 8.3 87.7 —
+ Disp of Intangible Assets 0 0 0—
+ Acq of Fixed & Intang -1,330.60 -1,768.30 -2,625.20 -4,671.30
+ Acq of Fixed Prod Assets -1,330.60 -1,768.30 -2,625.20 —
+ Acq of Intangible Assets 0 0 0—
+ Net Change in LT Investment 0 0 0 0
+ Dec in LT Investment 0 0 0 0
+ Inc in LT Investment 0 0 0 0
+ Net Cash From Acq & Div 0 0 0 0
+ Cash from Divestitures 0 0 0 0
+ Cash for Acq of Subs 0 0 0 0
+ Cash for JVs 0 0 0 0
+ Other Investing Activities -7,695.90 1,922.40 -2,787.50 5,228.20
+ Net Cash From Disc Ops 0 0 0 0
Cash from Investing Activities -8,920.10 162.4 -5,325.00 788.9

Cash from Financing Activities

+ Dividends Paid -316.3 -2,930.00 -3,634.50 -8,253.60
+ Cash From (Repayment) Debt 55.1 -4.3 -91.5 -12.2
+ Cash From (Repay) ST Debt 61.9 -43.5 -102.2 107.7
+ Cash From LT Debt 0 39.2 10.7 220.3
+ Repayments of LT Debt -6.8 — — -340.2
+ Cash (Repurchase) of Equity 0 -5,044.20 0.1 0.1
 + Increase in Capital Stock 0 0.1 0.1 0.1
+ Decrease in Capital Stock 0 -5,044.30 0 0
+ Other Financing Activities 807.1 236.4 287.1 27.5
+ Net Cash From Disc Ops 0 0 0 0
Cash from Financing Activities 545.9 -7,742.10 -3,438.80 -8,238.20

Effect of Foreign Exchange Rates 0 0 0 0

Net Changes in Cash -445.6 459.4 -289.2 5,332.80

Cash Paid for Taxes 3,733.20 4,276.00 4,092.70 3,930.70

Cash Paid for Interest 139.3 155.4 166.8 253.9

Reference Items
EBITDA 12,680.10 13,448.90 13,761.70 15,776.30
Trailing 12M EBITDA Margin 22.69 22.29 19.56 21.75
Interest Received 58.9 74.4 93.4 124.6
Net Cash Paid for Acquisitions — — — —
Free Cash Flow 6,598.00 6,270.80 5,849.40 8,110.80
Free Cash Flow to Firm 6,644.50 6,326.70 5,901.30 8,245.10
Free Cash Flow to Equity 6,759.50 6,274.80 5,845.60 8,330.60
Free Cash Flow per Basic Share 12.87 12.35 11.52 15.97
Price to Free Cash Flow 54.33 74.33 108.21 84.95
Cash Flow to Net Income 0.92 0.84 0.92 1.14
Source: Bloomberg
 FY 2021
03/31/2021

11,312.10
2,006.60
233.8
172.4
61.4
255.3
-1,758.80
-2,787.00
3,546.10
1,255.00
0
13,807.80

-3,520.00
17.6
—
—
-3,537.60
—
—
0
0
0
-20,568.60
0
-20,568.60
0
7,030.00
0
-17,058.60

-6.9
-171.3
279.3
0
-450.6
0.1
 0.1
0
-291.1
0
-469.2

-3,720.00

3,709.10
293.2

16,829.90
23.21
168.4
20,568.60
10,270.20
10,443.60
10,116.50
20.21
89.52
1.22
FCF = EBIT*(1-Tax Rate) + Depreciation & Amortization - Net Capex - Increase in Working Capital

INR,Million
Particulars 2017 2018 2019 2020
Revenue 55,879.10 60,324.00 70,348.00 72,541.60
Revenue Growth 7.65% 15.37% 3.07%
Total Operating Expenses 44,618.20 48,534.00 58,328.80 58,315.70
Expenses Growth 8.41% 18.38% -0.02%
EBIT 11,261 11,790 12,019 14,226
Tax Rate 30.85% 28.90% 30.80% 23.66%

+ Depreciation & Amortization 1,151.40 1,198.80 1,327.40 1,699.20

- Net Capital Expenditure 1,330.60 1,768.30 2,625.20 4,671.30
0.02 0.03 0.04 0.06
- Change in Net Working Capital 1,023.20 1,756.40 1,655.40 -1,318.70
1.831% 2.912% 2.353% -1.818%

WACC 9.14%
Long-term Growth Rate 6.37%

PV of FCF (Enterprise Value) 492,540.22 =NPV(B19,H21:L21)*(1+B19)^0.5

+ Cash and Cash Equivalents 4,486.20 =$BS.F8
- Debt 3,222.90 =$BS.F58+$BS.F48
Equity Value 493,803.52
Shares outstanding (mln) 508.2 =50.82*10
Intrinsic value per share 971.67
Market price (as of 31 March 2021) 2,380
Recommedation

Sensitivity Analysis
=IF(B19>B20,B27,"Null") 971.67 3% 4% 5%
6%
7%
8%
9%
10%
11%
12%
WACC 13%
14%
15%
16%
WACC

17%
18%
19%
 2021 Average 2022 E 2023 E 2024 E 2025 E 2026 E
72,509.20 78,816.77 85,673.03 93,125.72 101,226.72 110,032.43
-0.04% 8.70%
58,449.10 62,395 66,606.49 71,102.67 75,902.35 81,026.04
0.23% 6.75%
14,060 16,422 19,067 22,023 25,324 29,006
26.03% 26.03% 26.03% 26.03% 26.03% 26.03%

2,006.60 2,006.60 2,006.60 2,006.60 2,006.60 2,006.60

3,537.60 3,681.67 3,831.61 3,987.65 4,150.05 4,319.06
0.05 4.1%
-255.30 2.365% 1,864.24 1,908.34 1,953.48 1,999.68 2,046.98
-0.352%

FCF 8,607.54 10,369.48 12,355.12 14,588.38 17,095.53

656,650.83
8,607.54 10,369.48 12,355.12 14,588.38 673,746.36

ensitivity Analysis
6% 7% 8% 9%
 FCFo*(1+g1)/(WACC-LT Grate)

=L19*(1+B20)/(B19-B20)
55879.1 60324 70348 72541.6 72509.2

2017 55,879.10
2018 60,324.00
2019 70,348.00
2020 72,541.60
2021 72,509.20
2022 79,963.72
2023 84,511.50
2024 89,059.28
2025 93,607.06
2026 98,154.84