Pidilite Industry : Fevicol ka Jod

Thanks for the detailed write up. I am little confused with this point, as I can see Asian Paints aggressively advertising their water proofing since long time now. Also, to get to more growth, it is looking at adjacencies like adhesives and waterproofing via existing dealership. Is this not a meaningful competition to Pidilite Yet? Is this a long term risk? Can Pidilite also venture in Paints, if Asian can do otherwise? Thanks
Disc: Invested.

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Entire discussion with Pidilite is available in below video, watch from 3.38.30 time.

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Very good interview with some excellent questions and insights. I think the biggest challenge to watch would be an Asian paints vs Pidilite in waterproofing. An adversary with indian roots and of such calibre looking at your segments is as much a challenge as a reward of your achievements and strength. I would be watching this most closely as if Pidilite is able to guard and grow their turf in waterproofing then they would be unstoppable giant in global terms in years to come.
Disc. Invested and biased. Not a buy/sell recommendation.

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Basis my personal experience, I think Asian Paints is the winner for waterproofing.
I filled online lead on Dr fixit first (for a seepage issue in my flat). I got no response.
I gave up and tried Asian Paints. Got immediate response in same day. They visited next day and sorted the problem. Got my house painted with Asian Paints after the positive experience, and was even more impressed by their professionalism.
But I am not an investor in either Pidilite or Asian Paints as I find valuations too expensive for both.
Also, my experience with Pidilite could easily be an edge case and not the norm.

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I feel the following article, albeit a bit dated, can offer some insights in the way Asian Paints is approaching the waterproofing segment. In my opinion, waterproofing is still a sunrise sector with large growth runaway and there should be sufficient scope for both players in future.
PC_-Asian_Paints_Co_Update-_Aug_2019_20190821114716.pdf|attachment (925.9 KB)

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Thanks for sharing your personal experience. This slack for consumer from Pidilite is not expected. Need to keep track of its a one off or they are not as good as Asian in their direct Retail consumer reach and communication

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Completely agree. Even if Asian wins here will not dent Pidilite much. What I meant to convey was my thought that if Pidilite is able to manage and win a head on competition from an adversary of Asian paints calibre, then they will be on path of a global giant in making. To me, it is like a Patanjali Dabur/Colgate moment. The way Pidilite behaves here and the results of this segment would show the true calibre of their moats, business strength, management strength and strategy.

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Different experience for me. First thing when I thought abt water proofing was dr fixit. Enquired in their website and got a cal next day.this was 2 months back. Never knew about other brands in existence.even my painter was very impressed with Dr fixit. Says its better than anything he had done for waterproofing. Also My room temperature dropped considerably after the work.

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My experience was 2 years ago. So its good they have improved their service.
in terms of “brand recall”, Dr Fixit has top of mind position in consumer minds for “water proofing”. this is their strength.
Asian Paints is still a “paints” brand in the mind of consumers.

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Agree, I am using Dr. Fixit for my new home construction, enquired the website, they sent the technical person for site inspection, explained me all types of waterproofing techniques & relevant products, the guy is easily reachable & super friendly, had been in contact with him for more than a months now, he even helps me with buying the product at give away prices(escaping the retailers & dealers networking, probably because I told them that I am an investor).

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Profitability was higher due to the benefits of input costs and lower discretionary spends. However, with significant inflation in input costs, margins will be under pressure in the coming quarters

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Pidilite for all its earning capacity, moats, fantastic quarterly numbers has yet to give a dividend in this FY21.

Not only Pidilite . Every company director, KMP, selling their ESOP shares . Its normal. Selling 2000 share is nothing and big junk of share holders.

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Is there a point you are trying to make? Below are the dividend dates for Pidilite

image

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The idea of the table is to clearly show that the company pays dividend every year, unlike the point being made in the post earlier. The payout ratio is what a company has a policy on and not the dividend yield.

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The person posted that Pidilite being such a great company has not yet paid a dividend. The only sensible response to that question is that Pidilite pays a dividend once a year as is clearly evident from its last history of dividend payout.

Also, payout is based on percentage of profits. And that for Pidilite has been 30% for a fair number of years, which is what I also put there.

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