Accumulate PI Industries; target of Rs 620: Dolat Capital

741 Investors following PI Industries. Share this News with them.

0

Like this story, share it with millions of investors on M3

Accumulate PI Industries; target of Rs 620: Dolat Capital

Dolat Capital is bullish on PI Industries and has recommended accumulate rating with a target of Rs 620 in its February 20, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Infinite Computer; target of Rs 120: Emkay Buy Reliance Power; target of Rs 155: Emkay Buy CESC; target of Rs 350: PINC Research ALSO READ See previous views by Dolat Capital See what other Experts & Brokerages are saying about PI Industries See messages about PI Industries PI Industries BSE | NSE 30/05/12 Are Mutual Funds betting on PI Industries?

Dolat Capital is bullish on PI Industries and has recommended accumulate rating with a target of Rs 620 in its February 20, 2012 research report.

"PI Industries' Q3FY12 revenue stood flat YoY at Rs 1.91bn. On a like-to-like basis (excluding polymers) revenue growth stands higher at 11% YoY. The agri-input business (54% of sales) grew 16% YoY to Rs 1.02bn. Growth was impacted by erratic north-east monsoons and poor crop conditions, which is synonymous with the trend outlined by the peer group companies. The custom synthesis manufacturing (CSM) segment grew by a muted 5% YoY to Rs 880mn on account of higher base effect. However, healthy order book position (USD 340mn) continues to ensure higher revenue visibility going forward. Jambusar SEZ plant will go on-stream during Q2FY13E. EBITDA margins (adjusted for forex items) stood at 16.1% (up 240bps YoY) on account of favourable sales mix. Raw material costs reduced to 53.6% of sales (down 750bps YoY) while employee & other expenses increased. Forex loss for the quarter stood at Rs 64.6mn, of which Rs 58.5mn was unrealized loss on foreign currency exposure."

"Outstanding debt as of December 2011 increased to Rs 2.5bn (Rs 1.8bn - Sep'11) as the company had raised ECB of USD 20mn. Adjusted for forex item, PAT stood at Rs 179mn, up 58% YoY. The management has guided revenue growth for FY13E in the range of 30- 35%. We have lowered our FY12E/13E revenue estimates by 3.3% respectively, factoring in lower contribution from agri-inputs segment. We, however, expect new product launches and timely execution of orders in the CSM business to continue to accelerate earnings growth momentum." 

"We expect 25% revenue CAGR over FY11-13E, aided by rising contribution from CSM (from 33% in FY11 to 43% of sales, excluding polymers in FY13E). Divestment of polymers has boosted overall operating performance. Going forward, a better Kharif season and commencement of new plant at Jambusar shall accelerate earnings growth momentum. We expect 31% earnings growth over FY11-13E assuming non-dilutive capex. At CMP, the stock trades at 16.9x FY12E and 12.4x FY13E earnings. We recommend Accumulate with a revised target price of Rs 620 (14x FY13E earnings)," says Dolat Capital research report.     

FIIs holding more than 30% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment