Buy P.I. Industries; target of Rs 4850: Prabhudas Lilladher

Prabhudas Lilladher is bullish on P.I. Industries has recommended buy rating on the stock with a target price of Rs 4850 in its research report dated August 10, 2023.

Broker Research

August 15, 2023 / 14:47 IST

Buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on P.I. Industries

PI Industries (PI) 1QFY24 results were better than our and consensus estimates with Revenue/EBITDA/PAT growth of 24%/35%/46% YoY (PLe 17%/21%/22% YoY) led by robust performance in the exports segment. CSM revenues were up 37% YoY to Rs15.6bn (Excl. Pharma revenue of Rs443mn at Rs15.2bn up 33% YoY) (PLe Rs13.93bn) (Volume/Price growth of 29%/4%). Domestic revenues remained subdued and were down 13% YoY to Rs3.47bn (PLe Rs4.1bn), as focus was largely towards efficient WC management than that of volume growth. Gross margin improvement of 270bps YoY to 46.5% was partially offset by higher opex & one-off expense pertaining to pharma business restricting EBITDA margin expansion of 210bps YoY to 24.5% YoY (PLe23.2%). CSM order book position stood at USD1.8bn (+29% YoY and flat sequentially). Citing robust demand momentum, PI continues to guide revenue growth of 18-20% YoY along with consistent margin improvement primarily driven by strong enquiries in CSM business and new launches in domestic segment. The twin pharma acquisition announced recently (in April’23) is also anticipated to support overall growth (target revenue of Rs5bn in FY24E).

Outlook

We increase our EPS estimates for FY24/25E by 6% each factoring in robust performance in 1Q’24 and expect Revenue/PAT CAGR of 21%/23% (FY11-23, 20%/28%) over FY23-25E. Maintain ‘BUY’ with revised TP of Rs4,850 (earlier Rs4,560) based on 40xFY25 EPS.

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