PI Industries Ltd. share price target

PI Industries manufactures plant protection & speciality plant nutrient products and solutions under its agri-inputs business. The company is also one of India's leading custom synthesis (CSM) companies engaged in providing contract research and contract manufacturing services to global innovators. PI Industries' strong capability in research & manufacturing and non-competing business model with IP protection makes it a preferred outsourcing partner for global innovators for custom synthesis. It has a robust product portfolio of more than 30 products under its kitty. Further it...

PIs Q1FY18 revenue and PAT declined by 13% YoY and 21% YoY. Domestic agrichem revenue declined 15% (much weaker than peers), whereas CSM# revenue de-grew 12%. Despite weak Q1, management maintained its FY18 guidance

Revenue decreased by 8.66% to Rs. 553.17 Cr in Q1FY18 when compared to the previous quarter Revenue decreased by 8.66% to Rs. 553.17 Cr in Q1FY18 when compared to the previous quarter

Maintain BUY with a TP of Rs 950/sh (25x FY19E EPS). PI Industries (PI) 1QFY18 revenue declined by 13% YoY to Rs 5.5bn. Weakness in the global agrochemical market impacted exports (-12% YoY). Domestic business (-15% YoY) was affected by channel de-stocking, ahead of GST. EBITDA was at Rs 1.3bn (-21% YoY), owing to higher employee cost (+8%) and other expenditure (6%). PAT was Rs 1.0bn.

Strong CSM franchise; maintain BUY: PI's CSM businessto benefit from (a) order book at USD 1 bn, ~4.5x FY17 CSM revenue, (b) recovery in global agrichem market from H2FY18, and (c) success in CSM-pharma.

Revenue increased by 24.13% to Rs. 605.59 Cr in Q4FY17 when compared to the previous quarter.

Likely flat profitability in FY18: Management guided for 10% revenue growth, flat EBITDA margin and 20% tax rate (vs. 9% in FY17), which will lead to flat EPS YoY. However, in FY17, PI delivered 370 bps expansion in EBITDA margin vs. its earlier guidance of 150-200 bps.

PI Industries (PII) reported a 4% YoY decline in revenues during 4QFY17. Growth during the quarter was muted due to dull global market conditions. Domestic business was muted due to delayed and uneven rainfall distribution as well as lower pest infestation in India. At the operating level however, PII continued to perform well as its EBITDA margins came in at 25.4% during 4QFY17 as compared to 18.6% in the corresponding quarter last year (21.2% margins in 3QFY17). Margin expansion was led by favourable product mix and leverage. For the full year FY17, revenues came in higher by 8% YoY led by an 11% YoY increase in exports while domestic business rose by 5% YoY. PII has been able to...

PI Industries (PI) 4Q revenue growth was muted at Rs 6.1bn (4% YoY), owing to flat domestic sales. A better product mix (CSM share is 71% in Q4 vs. 62% in FY17) and operating leverage led to EBITDA margin of 25.4% ( 682 bps). EBITDA was Rs 1.5bn ( 42%). PAT was at Rs 1.4bn ( 41%), owing to tax benefits.

Considering the cautious stance, we have revised our revenue estimates downwards by 4% with a marginal increase in the earnings factoring lower tax rate. We maintain our Accumulate rating with a...