PI Industries’ opened flat at Rs 3,851.7 even after it reported a 46-percent growth in net profit Year-on-Year (YoY) to Rs 382 crore in the April-to-June quarter.
Revenue was up 24 percent YoY at Rs 1,910 crore in the same period. EBITDA was up 35 percent YoY at Rs 472 crore in Q1FY24.
Domestic revenues were subdued due to a delayed monsoon, which lead to volumes falling by around 13 percent in the quarter, said the management in its investor presentation for Q1FY24. PI Industries saw a 33-percent growth YoY in exports, excluding pharma, driven by volume growth, currency, and a favourable product mix.
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Motilal Oswal has maintained a buy rating on the stock with a target price of Rs 4,560. The brokerage firm expects PI Industries to sustain growth in the near-term due to consistent growth momentum in the CSM business, driven by a strong order book. It is also seeing commercialisation of new molecules and a sales ramp-up in existing molecules. Motilal Oswal expects the recent acquisition in the pharma API and CDMO segments to be one of the key growth pillars for the company in the future.
CSM or Custom Synthesis Manufacturing business saw healthy exports this quarter and the management sees limited impact on its CSM exports from the ongoing agrochemical destocking.
Jefferies has maintained a buy rating with a target price of Rs 4,430. The foreign brokerage firm said that PI Industries’ strong near-term growth visibility in CSM limits earnings downside from global agro chemical destocking. “Pharma CDMO diversification reduces agro chemical concentration risks and PI Industries’ surplus cash presents inorganic opportunities to grow which positions the company well for long-term growth,” said Jefferies in a report dated August 10.
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