We remain optimistic on PI; however, current valuations seem to have factored in these positives. Accordingly we recommend a NEUTRAL rating with a TP of Rs 885/sh (25x FY20E EPS). PI Industries (PI) reported disappointing results for 4QFY18 with revenues growing 3.2% YoY to Rs 6.25bn. Growth was largely driven by the domestic business (+10.4% YoY, ~30% revenue), and weakness in exports weighed on overall performance (CSM segment +0.4% YoY, ~70% revenue). EBITDA de-grew 12.3% YoY to Rs 1.34bn and EBITDA margin stood at 21.5% (-382bps YoY). The drop was largely on account of lower gross margins (-136bps YoY to 48.4%), higher employee costs (+120bps YoY) and higher operating expenses (+127bps YoY). Higher tax rates led APAT to decline by 22.0% YoY at Rs 1.05mn.