Their products, Fevicol or Dr Fixit, have strong brand recall. Furthermore, your plumber or carpenter will ask for trusted brands, and will not risk experimenting with cheaper alternative. They don’t have to pay for it, and you, the buyer, won’t go against professional advice unless there is big difference in price.
PE derating could also happen via strong growth. We are seeing that in Dmart and Asian Paints. While the rest of the world is going into stagflation, Indian companies are showing strong recovery coming out of the effects of demonetisation and lockdowns. Hoping for good numbers tomorrow.
Disclosure: Invested in Dmart, Asian Paints, and Pidilite. Biased.
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