PI Industries Ltd. share price target

The stock currently trades at 32x at FY23E EPS, which we believe is attractive, and revise our estimates and ratings to BUY (HOLD earlier) with a target price of Rs 2460 (Rs 2169 earlier)

CSM molecules portfolio consists of around 25 molecules currently. The company is in advanced stages for around five to six molecules, which are expected to get commercialised in the next fiscal. This should boost order book growth further in years to come. The order backlog remains at $1.5 billion at present, which provides revenue visibility for the next three years at least. Going ahead, since the new MPP is expected to get commissioned by Q4FY21 along with two new MPPs that are planned to come on board by next fiscal, we expect better execution to lead to strong topline growth in...

PI reported better than expected results driven by strong demand for key commercialised molecules and Isagro's performance. Prudent raw material management, traction for branded portfolio, higher utilisation rates and better contribution from ISAGRO drove better than expected EBITDA growth of 34% to Rs 2.8 bn (PLe Rs 2.4 bn). We believe ramp up of 4 recently commercialised molecules and pipeline of +40 products (5-6 molecules in FY22, 12-15 molecules in the next 2 years) will drive growth in coming years, along with...

Our Top Picks: PI Industries, NOCIL, Mold-Tek Packaging

PI Industries manufactures plant protection & specialty plant nutrient products and solutions under its agri-inputs business. It is also one of India's leading custom synthesis (CSM) companies engaged in providing contract...

Revenue beat was driven by strong out-performance in domestic business (33% y-o-y growth) and exports (25% y-o-y increase). Gross margin expansion and higher operating leverage led by sharp improvement in EBITDA margin. Robust order book position of $1.5 billion in CSM business and decent growth in domestic market bodes well for sustained strong revenue growth for PI Industries. Management maintained its FY2021E growth guidance of 20%. Focus on acquisition in high RoCE business of Pharma and specialty chemicals would boost yield on QIP funds and improve margin and return profile of PI Industries in the...

Strong order backlog likely to sustain CSM growth momentum CSM business has order backlog of $ 1.5 billion, which represents TTM book to bill of more than 4x. The revenue from CSM remained at | 1413 crore during H1FY21 against | 1136 crore in H1FY20, registering growth of 24% YoY. The management expects the CSM business to report 20% YoY growth for FY21, leading to H2 growth of 16%. We believe the guidance is conservative and there is high probability of growth crossing over 20% YoY for this fiscal. Going ahead, since a few molecules are in advanced stages of...

Background: Incorporated in 1947, PI (erstwhile Pesticides India) focuses on agri-input, custom synthesis and polymer compounding with strength of over 1,100 employees. The company currently operates three formulation and two manufacturing facilities as well as five multi-product plants across Gujarat and Jammu, and one R&D; unit in Rajasthan at Udaipur. PI is one of India's leading players in the agri-input industry, primarily dealing in agro-chemicals, specialty fertilizers, plant nutrients and seeds. The company has a strong product portfolio as a result of exclusive tie-ups with leading agro-chemical, pharmaceutical and fine chemical...

PI Industries (PI) reported a good Q2 beat. Revenue/EBITDA grew 28%/46% YoY, ahead of our estimates by 7%/13%.

The company reported a consolidated sales growth of 27.6% YoY to Rs 11.5bn. A strong sales growth in the CSM business (up 25% YoY to Rs 7.98bn) coupled with improving contribution from ISAGRO (Rs 996mn from domestic business, Rs 109mn from exports) led to a beat on our sales estimate of Rs 10.5bn. EBITDA growth of 45.5% YoY to Rs 2.8bn came in from an improvement in gross margins of 170bps YoY with improved business mix and product mix coupled with easing input costs....