Prabhudas Lilladher's research report on P.I. Industries
We interacted with senior management of PI Industries (PI) to take an update on the business and outlook ahead. Key highlights: (a) The company remains confident on achieving growth guidance of 18-20% YoY for FY23 in both exports and domestic segment (supported by lower base of last year); (b) remunerative commodity prices bode well for domestic market; (c) delayed monsoons have an impact on placements; however, remains hopeful of monsoon revival; (d) to launch 5-6 products in domestic market in FY23; (e) CSM business continues to be the shop stopper with mix changing to 80:20 for Agri and non-agri, going forward; (f) Pharma acquisition still in evaluation stages; likely to be done in next couple of quarters. Going forward, PI remains confident on the core business and its growth guidance with margins likely to improve from current levels, primarily led by strong enquiries in CSM business and new launches in domestic segment. We believe, the stock has corrected ~35% from its recent highs, thus providing a good entry point with strong earnings visibility in its core business.
We broadly maintain FY23/FY24 EPS. We expect PI to report revenue/PAT CAGR of 18%/ 23% (FY11-22, 20%/26%) over FY22-24E. Maintain ‘BUY’ with unchanged TP of INR3,340 based on 40xFY24 EPS.
At 11:12 hrs PI Industries was quoting at Rs 2,551.50, up Rs 63.25, or 2.54 percent.
It has touched an intraday high of Rs 2,553.15 and an intraday low of Rs 2,488.70.
It was trading with volumes of 2,378 shares, compared to its thirty day average of 6,419 shares, a decrease of -62.95 percent.
In the previous trading session, the share closed down 2.30 percent or Rs 58.45 at Rs 2,488.25.
The share touched its 52-week high Rs 3,533.30 and 52-week low Rs 2,334.35 on 14 September, 2021 and 27 January, 2022, respectively.
Currently, it is trading 27.79 percent below its 52-week high and 9.3 percent above its 52-week low.
Market capitalisation stands at Rs 38,710.88 crore.
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