cPidilite's main strength is their strong marketing/ advertising skills.

And the best part is, Y


this is their main strength. Can you recall any website of a listed company in India that has links to all
their TV advertisements? The management has the confidence to sell the products they have
effectively - that's why the company is as diversified as it is.

- Fevicol is an immensely strong brand. It is so strong that anything that has a prefix '

 to it sells
without any effort by the shopkeeper. The company is smart enough to put the 'Fevi' to a large
number of their products - Fevicol, Fevistik, Fevigum, Fevitite and what not.

- Pidilite earns 50% plus revenues from adhesives segment (Fevicol, M-Seal etc) whose brands have
excellent recall value. This part of their business almost runs on auto-pilot, so that the management
can concentrate on their other businesses.

- I can't think of anything else - so little bit more about their marketing skills. Pidilite organized
'International Creative Contest' last year in which 800,000 students from 3000 schools participated.
And 1000 schools introduced craft lessons in their schools.  

 




º
  ÿ

- The management seems to be a bit overconfident about their advertising skills. To me, it makes little
sense to acquire Cyclo (car care products). Market for car care and crayons/water colours is

Y

 
Y
 in India, where customers have little loyalty. These acquisitions will only add
to topline/bottomline the year they are acquired and might not contribute much to growth.

- Chikkies? Is Pidilite really selling Chikkies? They have some products that don't fit the profile of this
company.

- Pidilite seems to have strong R&D capabilities when it comes to adhesives and home
construction/care. But for the rest, they seem to depend on acquisitions. Y


Y










- This is not really a weakness as such but something that investors should know. Pidilite has grown
its net profit at  18% CAGR in the past 10 years. I assume this kind of growth rate brings a big
YAWN to 90% of the TEDdies.

   
 ÿ

- As mentioned before, one can see signs of  

 in Pidilite. And 3M is a $60 billion
company. Pidilite can become a 'big' company if things go well.

- Growth in the retail sector in India is a positive for Pidilite, especially the future growth of
home specific stores like Home Town and Home Stop.



ÿ

- 50% of their revenues are from adhesives/sealants and the raw material for this is petrochemicals
which in turn is dependant on crude oil prices.

- There is obviously a threat from the „
 3M and small scale industries. Most of products made by
Pidilite doesn't require a nuclear reactor. Anybody can make it - problem is, of course, selling it.