PI Industries Ltd. share price target

PI is all set to ride the multi-year growth in the CSM segment as its enhanced Change in Estimates | Target | Reco R&D; capabilities, supply scarcity related issues in China and increased focus on outsourcing by the innovators are bearing fruit in the form of big product...

13 September 2019 Agrochemicals PI Industries has announced the acquisition of Isagro Asia from Isagro S.p.A for INR3.5b. Isagro Asia operates in India and is engaged in contract manufacturing, local distribution and exports of agrochemicals. PI will acquire 100% shareholding held by Isagro S.p.A in Isagro Asia, either directly or through a subsidiary. The deal has taken place at a valuation of ~15x P/E FY19. PI will fund the acquisition partly through internal accruals and partly through debt. Company remains confident of integrating Isagro Asias operations with itself in FY20. Isagro Asia generated revenue of ~INR3b in FY19; of this, 65% was contributed by the domestic formulation business and balance came in from the contract manufacturing business. In the domestic formulation business, Isagro sells in-licensing products, generics products and proprietary patent products. Three key in-licensing products include (i) insecticide mitigate, (ii) fungicide domark, and (iii) biostimulants siapton.

PI Industries manufactures plant protection and speciality plant nutrient products and solutions under its agri-inputs business. It is also one of India's leading custom synthesis and manufacturing companies providing contract...

Sector: Agrichemical /Small-Cap | Earnings Update 1QFY20 Background: PI Industries' is one of the leading players in the Crop protection industry. Company largely operates under two main segments a) agriculture inputs, b) custom synthesis and contract manufacturing. Company has a niche portfolio of 45 products, which includes 5 in-licensed products and 7 co-marketing products in tie up with MNCs such as Bayer, BASF & Kumiai chemicals. Company currently operates three manufacturing sites in Gujarat, having three formulation units and 8 multiproduct plants for manufacturing, active ingredients and intermediates. PI has a strong distribution network of 10,000 dealers / distributors; 40,000 retailers and 30 stock points....

Beat on revenue; EBITDA/PAT in-line: Revenue increased 25% YoY to INR7.5b (our estimate: INR7.1b) in 1QFY20. EBITDA grew 28% YoY to INR1.5b (our estimate: INR1.4b), with the margin expanding 60bp YoY to 20.1% (our estimate: 19.9%). Adj. PAT was up 23% YoY to INR1b (in-line). Product mix change dents gross margin: CSM revenue grew 59% YoY, led by increased requirement for commercialized molecules and addition of a new molecule (was commercialized during the quarter). Domestic revenue declined 13% YoY owing to erratic/delayed advent of the south-west...

Strong results, ahead of estimates: PI Industries continued to deliver strong results with revenue, EBITDA and PAT registering robust growth of 24.5%, 28.4% and 23.6% y-o-y, respectively, in Q1FY2020. The improved performance was been led by a 59% y-o-y growth in the exports business as domestic business declined by 13% y-o-y. The management guided that the growth in exports is quite steep and hence might not sustain. However, it stated that a growth of 2025% is achievable on a sustainable basis for the next 3-5 years. The management reiterated its guidance for revenue growth of more than...

PI Industries's (PI) results and management commentary on future outlook indicates robust business momentum and clear growth visibility for 2-3 years, despite gloomy agchem environment globally and negative business outlook from one of its key clients. Sizeable sustained capex guidance (Rs4.0-4.5bn p.a. for the next 2-3 years) for investment in 4 new plants (2 in FY20 & FY21 each), increasing number of products moving from R&D; stage to commercialisation and continued demand traction for existing products gives us comfort of superior earnings growth visibility for the next 2 years....

Sector: Agrichemical /Small-Cap | Earnings Update 4QFY19 Background: PI Industries' is one of the leading players in the Crop protection industry. Company largely operates under two main segments a) agriculture inputs, b) custom synthesis and contract manufacturing. Company has a niche portfolio of 45 products, which includes 5 in-licensed products and 7 co-marketing products in tie up with MNCs such as Bayer, BASF & Kumiai chemicals. Company currently operates three manufacturing sites in Gujarat, having three formulation units and 8 multiproduct plants for manufacturing, active ingredients and intermediates. PI has a strong distribution network of 10,000 dealers / distributors; 40,000 retailers and 30 stock points....

account of i) lower channel inventory levels as compared to previous years, ii) demand offtake seems to be healthy in various geographies on account of favourable climatic conditions, and iii) innovators seem to have started focusing on developing and introducing new molecules and products after a gap of 2-3 years, as they were involved in large M&A; activities and integration...