Introduction
Founded in 1987 as M/s. H.P. International, the company evolved from a partnership firm into HP Adhesives Private Limited in 2019, and subsequently into HP Adhesives Limited, a public limited company, in 2021. Specializing initially in solvent cement products, HP Adhesives has expanded its offerings to include a diverse range of adhesives and sealants for various industries such as plumbing, construction, automotive, and more.
The company’s manufacturing processes are automated, with infrastructure designed for scalability to accommodate future growth. The facility features multiple modular manufacturing lines, collectively capable of producing over ~13,000 metric tonnes per annum (MTPA).
With a robust distribution network comprising 4 depots and over 750 distributors serving 50,000+ dealers across India, HP Adhesives operates from its manufacturing facility in Village Narangi, Raigad (Maharashtra), continuing to grow its market presence.
Significant equity issuances have marked the company’s journey, including the allotment of over 12 million equity shares in 2019 and subsequent issuances in 2021. In December 2021, HP Adhesives launched a successful Rs 125.96-crore public issue, listing IPO shares on the BSE Ltd and NSE.
Founded by the Motwani family, HP Adhesives has prioritized quality and innovation, leveraging a collaborative research and development team to enhance its product range and maintain global standards. With a focus on customer-centricity and reliability, the company has cultivated strong relationships with customers and employees alike, reflecting its commitment to growth, innovation, and customer satisfaction.
As a leading global adhesive manufacturer, HP Adhesives Limited boasts a strong presence in over 40 countries, underlining its commitment to international collaboration and market expansion. Leveraging partnerships across Asia, the Gulf, the United States, Africa, and Europe, the company competes on a global scale, showcasing its diverse product portfolio to compete against the industry’s best.
With an unwavering dedication to quality, HP Adhesives Limited prioritizes consistency across all its products, employing stringent quality control and testing measures to adhere to international standards such as ISO 9001:2015 for quality management, ISO 14001:2015 for environmental management, and ISO 45001:2018 for occupational health and safety management. This commitment to quality reflects the company’s global standing and reliability.
Through extensive research and development initiatives and a comprehensive product range, HP Adhesives Limited addresses the unique requirements of its customers spanning various industries. With over 35 years of industry experience, the company focuses on delivering innovative solutions, positioning itself for continued growth and success as a premier global adhesive manufacturer.
Business Products
Solvent cement
Solvent cement, a widely used adhesive in plumbing and piping applications, is formulated from a blend of solvents and resins. This mixture effectively dissolves and bonds plastic pipes and fittings, ensuring a durable and watertight connection. Ideal for PVC, CPVC, and ABS materials, solvent cement offers an efficient and cost-effective alternative to welding and other adhesive methods. By softening the surfaces of pipes and fittings, the solvent facilitates resin penetration, resulting in a permanent bond once the solvent evaporates. Renowned for its durability, ease of application, and rapid drying, solvent cement finds extensive use across industries such as construction, plumbing, and engineering.
Silicone Sealants
Silicone sealants, a prevalent adhesive type in construction, automotive, and household applications, excel in performance against temperature variations and weathering. Renowned for their flexibility and durability, they provide a steadfast seal that remains unaffected by shrinking, cracking, or yellowing over time, particularly suitable for high-stress and high-temperature environments. Waterproof by nature, silicone sealants find ideal placement in damp or wet areas like bathrooms and kitchens. Supplied in paste form, they are easily applicable using a standard caulking gun and can be painted over once cured, offering convenience alongside reliability.
Contact Adhesives And PvA AdhesIves
Contact adhesive finds widespread application across various industries such as furniture construction, automotive, aerospace, footwear, foam, and furnishing. PVA adhesives, alternatively known as white glue or Carpenter’s glue, are water-based and enjoy extensive usage in both households and industries for carpentry and woodworking purposes. They establish effective bonds, particularly with absorbent materials like wood and laminates, ensuring robust and water-resistant attachments.
White Glue / PVA
Polyvinyl acetate (PVA) adhesives, also referred to as white or school glue, are water-based adhesives extensively utilized in households and diverse industries, including woodworking, paper crafting, and textile manufacturing. With their milky appearance, low toxicity, and easy cleanup with water, PVA adhesives offer convenience and safety. Renowned for their versatility, they are favored for bonding porous materials like paper, cardboard, and wood, forming durable bonds resistant to water and aging. While they can be easily sanded or painted over, PVA adhesives exhibit limitations such as slow drying times, limited heat resistance, and reduced bond strength on non-porous surfaces such as metal or plastic.
Epoxy Putty
The StrongTite GP Epoxy compound consists of two components: RESIN and HARDENER, each provided in separate, sealed packages in equal proportions. These components are meant to be combined in a 1:1 ratio by volume or weight, ensuring ease of use for DIY enthusiasts.
This versatile putty serves various purposes, including sealing, bonding, attaching, and insulating a wide array of surfaces. Compatible surfaces range from ferrous and non-ferrous metals to materials such as porcelain, ceramic, marble, granite, ivory, asbestos, glass, wood, leather, and select plastics.
Aligned with our enduring vision and commitment, this product was launched during the first quarter of FY 2023-24, catering to the diverse needs of our customers.
Spray Paint
- Fast-drying, multi-purpose spray paint suitable for both exterior and interior applications.
- Can be used on a variety of surfaces including furniture, toys, lamps, cabinets, bicycles, doors, picture frames, vases, and lampshades.
- Cost-effective method to renew old or outdated items.
- Popular medium for artists and crafters, used for stenciling, graffiti art, and abstract paintings.
- Suitable for automotive projects such as painting car parts, rims, and body panels.
- Used in industrial applications for touch-up painting and safety marking.
- Versatile spray paint usable on wood, metal, acrylic, and other surfaces.
- Wide range of shades available to meet specific project requirements.
- Offers convenience, ease of use, and smooth finish.
Drainage Solution
HP Adhesives Limited solvent cements have always been well accepted due to superior quality and consistency with a wide product range to choose from.
Plumbing Accessories
A ball valve functions as a shut-off valve regulating water flow via a rotary ball mechanism. Known for their durability, they offer reliable sealing even during prolonged periods of inactivity. Ball valves are primarily used for shutting off water flow during cleaning or maintenance of inlet or outlet lines. To meet demand efficiently, we outsource the manufacturing of ball valves, adhering to our specifications, and distribute them under our brand to customers.
Financials
For the Year ended March 23
- In March 2023, Net Sales soared to Rs. 233 crore, reflecting a robust growth of 41% compared to Rs. 165 crore in March 2022.
- Net Profit for March 2023 surged to Rs. 11 crore, marking a significant increase of 83% from Rs. 6 crore in March 2022.
- EBITDA for March 2023 reached Rs. 19 crore, demonstrating a substantial rise of 72% from Rs. 11 crore in March 2022.
- AAs of March 2023, the company allocated Rs. 17 crore for capital work in progress. The Return on Capital Employed (ROCE) of the company remained steady at approximately 11%.
- Over the three-year period, the company achieved a sales compound annual growth rate (CAGR) of 40% and a profit CAGR of 64%.
For Q3FY24
- In September 2023, Net Sales amounted to Rs. 54.75 crore, showing a marginal decrease of 0.7% compared to Rs. 55.17 crore in September 2022.
- Quarterly Net Profit for September 2023 stood at Rs. 5.24 crore, marking a substantial increase of 70% from Rs. 3.10 crore in September 2022.
- EBITDA reached Rs. 7.34 crore in September 2023, demonstrating a notable rise of 29% from Rs. 5.69 crore in September 2022.
- The EPS (Earnings Per Share) of HP Adhesives increased to Rs. 5.24 in September 2023 from Rs. 3.10 in September 2022.
Management’s comments
No information about the management’s comments.
Sectorial Outlook
Indian Adhesive Market
The Indian construction industry is experiencing rapid growth driven by economic development, urbanization, and government investments. This growth is fueling demand for adhesives and sealants across various construction sectors. Demographic shifts, rising incomes, government initiatives, and infrastructure projects are key drivers. These factors contribute to a surge in demand for housing, commercial spaces, and infrastructure development, creating significant opportunities for the adhesive industry.
Construction and Housing
The adhesive and sealants industry offers a diverse range of products catering to various industries. Water-based adhesives are suitable for porous and non-porous substrates, while solvent-borne adhesives provide high bond strength despite higher costs. Hot melt adhesives are cost-effective with limited VoC emissions, crucial in construction bonding.
Sealants, such as silicone, acrylic, and epoxy, serve versatile purposes, offering flexibility, water resistance, and durability. The market is projected to reach USD 3.8 billion by 2028, driven by the booming construction industry in India. Urbanization fuels demand for construction projects, enhancing the adoption of adhesives and sealants. Green building initiatives and construction quality emphasis further drive market growth, promising significant sales and usage expansion in the sector.
Wood working and Foam & Furnishing
In 2020, the Indian furniture and furnishing industry achieved a market size of approximately USD 32 billion. It is anticipated to expand at a compound annual growth rate (CAGR) exceeding 15% until 2025, attributed to real estate expansion and increasing requests for tailored interiors. PVA adhesives and Contact adhesives find extensive application in furniture, carpentry, mattresses, upholstery, among others. Positioned as an emerging contender in this sector, HP Adhesives is primed for growth due to its diverse product portfolio and expansive distribution network.
Conclusion
HP Adhesives Ltd, a 37-year-old debt-free company, specializes in manufacturing adhesives and sealants. Offering a diverse range of products including PVC, cPVC, and uPVC solvent cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket shellac, and PVC pipe lubricants, the company caters to various consumer needs. Additionally, it supplies ancillary products like ball valves, thread seals, tapes, and FRP products for drainage and architectural solutions. With capital work in progress amounting to around 18 crores, up from 17 crores in the previous year, and a sales compound annual growth rate (CAGR) of 40% over a three-year period, HP Adhesives looks worth exploring for long term.