Have you heard of the name Pidilite Industries? If not, you would have definitely heard about one of India’s most iconic brands Fevicol.
There are chances you would have also used brands like Feviquick, Fevicryl, Fevistick, M-Seal, Dr Fixit etc.
All of these brands are owned by Pidilite.
In the telecom space, Jio is the leader, but we also know Airtel.
Coca Cola has a competitor like Pepsi. MRF has JK Tyres, Ceat and others.
But which brand competes against Fevicol? The answer is very few and most of them are not commonly recognisable brands. Fevicol stands head-and-shoulders above the rest, commanding a market share of 70% in the Adhesive segment. Its competitors are smaller brands like Araldite and Jivanjor.
Fevicol has captured the hearts and minds of Indians. Very few brands come close, Nestle Maggi could fall in the same iconic category.
Apart from the quality of the product, a large share of the credit for Pidilite’s success should also go to its marketing brilliance.
Almost every Pidilite Fevicol advertisement were funny, heart-warming and went on to become iconic. If you were born in the 90s or before, relive some of those advertisement in the video below. Most of these were aired during cricket matches.
All of these ads were instrumental in making Fevicol the brand that it is today.
What happens when a company is so successful over such a long period of time? Its investors become extremely wealthy.
- 1 lakh invested in Pidilite in 1995 would be 4.6 crore today without including dividends!
- The same amount invested 10 years ago, would be more than 11 lakhs today.
Those are the kind of unbelievable returns we are talking about here.
Think about it. India is still a growing country. There is tremendous potential for growth in the industry which Pidilite dominates. There is no reason why the company cannot give excellent, market-beating returns, in the next 10 years.
However, do note, this article is for education purpose only. This is not a buy or sell recommendation. Do your own research before you take any decision or contact your financial advisor.
Pidilite Share Price
A mind-boggling chart. Pidilite has been a brilliant compounder for more than 25 years.
When will it stop? Will it ever stop? Will the company continue to grow and reward its investors for the next 10-20 years?
That’s the question every old and new investor of Pidilite will have in mind – as the company enters a new decade.
In the chart above, we have removed the price movement that takes place throughout the year. We have included only the year-end share price.
This gives a clear picture on how the stock and the company have performed over the last quarter of a century.
The stock under-performed between 2000-2001. Crashed with almost every other company in the 2008 bear market. Consolidated in the year 2011 and for two more years between 2015-2016 – when the returns were low or negative.
This goes to show that even the best of companies give opportunities. A patient and experienced investor knows how to grab such opportunities when they come. There is no real need to buy such companies when they are continuously rising.
Learn to be patient. There will always be opportunities in the stock market.
Wait for the price to correct or the stock to stagnate (time correction, like it happened in 2015-16). Track the fundamentals carefully and if you haven’t, do learn technical analysis. This will help you get entry into outstanding companies like Pidilite at the right levels.
A lot of experts will tell you, it’s impossible to time the market. Do not believe them. It can absolutely be timed. With knowledge of technical analysis and a bit of common sense, you can buy such companies at the right price and more importantly at approximately the right time.
All you need is courage to buy in a falling market and the conviction to know such companies will eventually rebound.
Barring those few years which we have mentioned, Pidilite has been a strong compounder. It has never given negative returns in the last 10 years.
In other words, if you bought Pidilite on a random date like 1st of January, it has never given negative returns at the end of the year – since 2011!
Detailed year-ending share price of Pidilite Industries.
|Pidilite||Price||Rise / Fall|
|1995 Share Price||3.8|
|1996 Share Price||3.9||2.6%|
|1997 Share Price||4.25||9%|
|1998 Share Price||6.3||48%|
|1999 Share Price||16.7||165%|
|2000 Share Price||12.4||-26%|
|2001 Share Price||8.6||-31%|
|2002 Share Price||11.4||33%|
|2003 Share Price||18.7||64%|
|2004 Share Price||18.8||0.5%|
|2005 Share Price||40.7||116%|
|2006 Share Price||61.3||51%|
|2007 Share Price||97.3||59%|
|2008 Share Price||54.1||-44%|
|2009 Share Price||97.6||80%|
|2010 Share Price||152||56%|
|2011 Share Price||144||-5.3%|
|2012 Share Price||218||51%|
|2013 Share Price||286||31%|
|2014 Share Price||543||90%|
|2015 Share Price||552||1.7%|
|2016 Share Price||590||6.9%|
|2017 Share Price||902||53%|
|2018 Share Price||1108||23%|
|2019 Share Price||1387||25%|
|2020 Share Price||1766||27%|
|2021 Share Price||1933||9.5%|
From just ₹ 4 at the end of the year 1995 – Pidilite Industries has gone from single digits to a four-digit stock today.
It’s important to note that the share price has been adjusted for bonus shares and splits.
- 1:1 Bonus in October 1996.
- 1:1 Bonus in January 2000.
- 1:10 Split in July 2005.
- 1:1 Bonus in January 2010.
In short, if you bought 100 shares of Pidilite in the year 1995, you would have 8000 shares today.
Those 100 shares would have cost you around ₹ 32,000 back in 1995. And after all the splits and bonuses, the 8000 shares you have today would be valued at 1.55 crore!
And yes, without including the dividends!
This is the power of the equity market. And this is the power of investing in identifying good companies. It can change your life. Forever.
The tragedy is, most people enter the market with a mindset of making quick money. They chase fancy stocks. They cannot handle the short-term volatility. And the market throws them out in the first downcycle itself.
The goal of our website here is to educate investors to learn to invest in the right way.
Make no mistake, it isn’t easy. The article and the numbers above might make it seem like investing is easy. But it really isn’t.
Even if you had bought Pidilite in 1995. You would be tested by the under-performance of the stock in 2000 and 2001, when it lost nearly 50% of its value. Again in 2008 it lost 45% of all the gains it made in 13 years.
That’s a terrible feeling.
Numbers make it seem easy, but 25 years is a long-time and the ups and downs will make you take wrong decisions. And the market will make you take these wrong decisions at the wrong times. That’s just how it works, unfortunately. Otherwise, everyone would’ve made money.
It’s easiest to buy in a rising market. It’s very difficult to buy in a crashing market. Most end up selling when the market falls sharply.
Enough of gyaan. Let’s move on to the next section.
Pidilite Share Returns
How much returns has Pidilite Industries given in the last 2 years? What about 3, 5, 10, 20 years?
Check out the table below:
|2 years||26.25%||1.59 times|
|3 years||25.10%||1.96 times|
|4 years||31.53%||2.99 times|
|5 years||26.18%||3.20 times|
|10 years||27.79%||11.62 times|
|15 years||28.57%||43.39 times|
|20 years||28.13%||142.42 times|
|25 years||27.84%||464.74 times|
1 Lakh invested in Pidilite
If you had invested 1 lakh in ‘Pidilite’, how much returns has it given over different time periods?
The table below has the figures:
|Time||1 Lakh Invested|
|2 years||1.59 lakhs|
|3 years||1.96 lakhs|
|4 years||2.99 lakhs|
|5 years||3.2 lakhs|
|10 years||11.6 lakhs|
|15 years||43.4 lakhs|
|20 years||1.42 crore|
|25 years||4.65 crore|
If you had invested 1 lakh in Pidilite 25 years ago, the value of your investment today would be 4.65 crore.
It goes without saying that these returns do not include dividends, which the company has paid out.
If you held shares of Pidilite for a decade (10 years), a 1 lakh investment would be valued at 11.62 lakhs.
Pidilite Shares vs FD Returns
What if you opened a fixed deposit of 1 lakh in a bank and made another investment of 1 lakh in Pidilite Shares. Let’s assume both investments were made in the year 2010 (i.e. 10 years ago).
The results are below.
The chart looks great. But let’s relive the chart through the day to day feelings of an investor.
- A fixed deposit is super safe. The stock market carries risk. Why should I invest my hard-earned money in anything that carries risk?
- This is what most people in India think. Any investment should not carry risk.
- But what about the risk of inflation? If you get 6% from FD and inflation is 6%, the value of your money did not grow at all. Isn’t this a long term risk?
- Sure, but a investor would think. Atleast my money is safe. If the market crashes, my investment in Pidilite could crash by 50%.
- That’s true as well. After all, it has happened in 2000-2001 and again in 2008. What if I am unlucky and the market crashes immediately after I buy? There is no such risk in FD.
- True. And that’s exactly why only risk takers can make out-sized gains and become successful. Applicable to life, business or stock market. It’s just that the risks have to be calculated.
- Next. The year is 2010 and you have 2 lakhs. You decide to risk with 50% and split 1 lakh each between Fixed Deposit and Pidilite.
- In the first year, a full 365 days, the value of your FD goes up and Pidilite falls.
- A year and a half has passed, and the value continues to be low. Most investors lose patience here and sell their shares.
- After all, selling stocks is easy. Selling a fixed deposit prematurely carries a penalty.
- Then when patience runs out, the stock begins to perform and soon it is unstoppable.
- A few who held for 4 years, would now be seeing big profits. 1 lakh investment 3.5 lakhs.
- Pidilite, in fact, has doubled in the last one year. Best time to sell? What if it crashes now? Should I book my gains now? These are the thoughts that go through the mind of every investor, even the best of them.
- The stock consolidates for 2 more years and the remaining few who are still invested lose patience.
- And like it is with most quality companies, a couple of years of consolidation will result in quick rise in stock price.
- Those who held-on for 10 years, would’ve converted 1 lakh to more than 11 lakhs. Life changing wealth for many.
- The fixed deposit would be at 2 lakhs. Most will have no problems holding this, but will find it difficult to hold an investment which went from 1 lakh to 3.5 lakhs in 4 years.
We hope you found this article useful. If you did, do share it with your family and friends. If you have any questions, ask them in the comments section below.
If you can do simialr analysis for
it will help the visitors a lot
Hi Ramesh, thank you. Ideas noted. It’ll be posted in the days to come.