Pidilite Industries stock is at a record high in the first week of the year 2022. It rallied around 11 percent odd.

There are two factors that are leading this rally. The first, the expected rebound in demand in the Q3 is what the street is working with and the company has taken price hikes alongside all the other paint companies. So any sort of stability in the raw material environment would only support their margins.

Importantly, some positions added in the Futures and Options (F&O) as well as the cash market space. So on a Friday, January 8, the January Futures open interest added 9 percent in its open interest, and that's suggesting that a lot of long positions were added even at a record high.

Also, the cash market delivery, on Friday, was close to 4 lakh; all of last week it was close to around 3.5 lakh on a daily basis compared to a 3-month average of just around 2.5 lakh. So more people buying at record highs as well.

Also Read: Pidilite Industries Q2FY22: MD says demand environment robust, higher prices may disrupt it

The only fly in the ointment would be the valuations at around 80 times FY23 earnings.

Watch the accompanying video of CNBC-TV18’s Mangalam Maloo for more details.

First Published:Jan 10, 2022 10:41 AM IST