Pidilite shares: Fevicol maker almost touched Rs 3K level in Sept 2022; why the target looks distant now?

Shares of Fevicol maker Pidilite Industries Ltd almost touched Rs 3,000 level in September 2022. They hit a 52 week high of Rs 2,916.85 on September 15, 2022. However, the stock was trading at Rs 2414 in the current session, falling 17.21% or Rs 502 during the period. The weakness in the stock can be attributed to high inflation which raised raw material costs for the firm, according to analysts. In fact, the stock has managed to gain a meager 4% in a year but fallen 5.36% in 2023. In comparison, Sensex has gained 5.69% in a year but lost 1.91% this year.

The stock has gained 64% in the last three years.

In the current session, Pidilite stock lost 0.61% to Rs 2414.90 today against the previous close of Rs 2429.75 on BSE. The stock has fallen after four sessions. Market cap of Pidilite fell to Rs 1.22 lakh crore on BSE.

Total 3708 shares changed hands amounting to a turnover of Rs 89.90 crore on BSE. The stock hit a 52-week low of Rs 1988.60 on June 17, 2022.

In terms of technicals, the relative strength index (RSI) of Pidilite stands at 67.5, signaling it's neither trading in the overbought nor in the oversold territory. The stock has a beta of 0.7, indicating very low volatility in a year. Pidilite shares are trading higher than the 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages.

Here’s look at what analysts said on the outlook of the stock.

Abhijeet from Tips2trades said, "Despite consistently strong fundamentals, higher raw material costs over the past year has severely dented operating margins which has resulted in a below average returns for Pidilite industries in FY23. Technically, Rs 2390 acts as a strong resistance on the Daily charts. Investors should buy near a dip close to support zone of Rs 2250-2270 for higher targets of Rs 2390- 2564 in the coming weeks."

Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher said, “The stock has witnessed a decent erosion from near the Rs 2920 zone of September 2022 and has bottomed out near the Rs 2250 zone with consolidation witnessed for quite some time with a gradual rise seen since the last 3 months resisting near the 50EMA level of Rs 2360-2370 zone. A decisive move past the Rs 2400 level is much needed to improve the bias further and strengthen the trend to anticipate for further rise with initial target of Rs 2500-2550 levels and further strength can carry the stock to touch the second target of Rs 2770-2800 levels. The stop loss should be maintained near the long term trendline support of Rs 2290 level as of now.”

Pidilite Industries is engaged in the manufacturing of adhesives, sealants, waterproofing solutions and construction chemicals, arts & crafts, industrial resins and polymers.