Pidilite Industries , a leading manufacturer of adhesives and construction chemicals, has announced its decision to acquire the remaining 40% stake in its subsidiary, Pidilite C-Techos Walling Limited (PCTWL). This move will transform PCTWL into a wholly-owned subsidiary of Pidilite Industries.

Transaction Details

The company has agreed to purchase 7,27,200 equity shares of PCTWL from the existing shareholder, Chetana Exponential Technologies Private Limited. The transaction, valued at Rs 72,720, will be executed through a cash deal. Upon completion, Pidilite's shareholding in PCTWL will increase from the current 60% to 100%.

About PCTWL

Pidilite C-Techos Walling Limited, incorporated in March 2020, operates in the construction sector. The company specializes in:

• Construction of building works and structural projects using C-Techos wall technology
• Manufacturing of ACC panels

Financial Performance

PCTWL's recent financial performance has been as follows:

Transaction Timeline and Impact

Pidilite Industries expects to complete this acquisition on or before November 11, 2023. The company has stated that this transaction does not constitute a material transaction for Pidilite Industries, suggesting that it will not significantly impact the parent company's overall financial position.

Strategic Implications

This acquisition aligns with Pidilite's strategy to strengthen its position in the construction and building materials sector. By gaining full control of PCTWL, Pidilite may be looking to:

1. Streamline operations and decision-making processes
2. Potentially integrate PCTWL's technology and products more closely with its existing portfolio
3. Capitalize on future growth opportunities in the construction technology space

As the construction sector continues to evolve with new technologies and materials, this move could position Pidilite to better respond to market demands and innovations in building techniques.

Investors and industry observers will be keen to see how Pidilite leverages this full ownership to drive growth and innovation in its construction-related product lines.

Pidilite Industries , a leading manufacturer of adhesives and construction chemicals, has projected revenue growth of 10-11% for FY26 while aiming to maintain EBITDA margins at 24-25%. The company has reported strong double-digit growth in underlying volume and announced plans to increase its stake in its subsidiary, Pidilite C-Techos Walling Limited (PCTWL).

Growth Projections and Segment Performance

Pidilite Industries expects its consumer and bazaar segment unit volume growth to rise 10%, while the B2B segment shows an 11% improvement. The company's growth strategy includes new product launches under the Fevicol, Roff, and Dr. Fixit brands. Additionally, Pidilite plans to achieve a 70% renewable energy mix and continue sustained marketing investments to drive double-digit volume expansion and maintain margin stability through FY27.

Strategic Move to Strengthen Construction Business

Pidilite intends to purchase 727,200 equity shares from the existing shareholder, Chetana Exponential Technologies Private Limited, increasing its shareholding in PCTWL from 60% to 100%. This acquisition represents a strategic move to consolidate Pidilite's position in the construction chemicals and walling technology sector.

Transaction Details

The company will execute a share purchase agreement with Chetana Exponential Technologies Private Limited and PCTWL to finalize the transaction. The shares will be acquired at a cost of Rs 72,720.00, valuing each share at Rs 10.00.

About Pidilite C-Techos Walling Limited

PCTWL, incorporated on March 5, 2020, specializes in the construction of building works and structural or architectural projects using C-Techos wall technology. The company also manufactures ACC panels and other ancillary products.

Financial Performance

PCTWL reported no turnover for the fiscal years ending March 31, 2022, and March 31, 2021. However, it generated a revenue of Rs 0.47 crores in the fiscal year 2022-23.

Market Impact and Outlook

While the PCTWL transaction is not considered material for Pidilite Industries, it demonstrates the company's commitment to strengthening its presence in the construction technology sector. Pidilite expects better conditions for its domestic operations, anticipating a favorable market environment for its business activities within India.

Conclusion

Pidilite Industries' projected revenue growth, strong volume performance, and strategic acquisition align with its expansion strategy in the construction and building materials sector. By gaining full control of PCTWL and focusing on new product launches and sustainable practices, Pidilite aims to leverage its technology and expertise to enhance its offerings in the construction chemicals market. The company's optimistic outlook and growth initiatives position it well for potential future success in the Indian market.