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Buy PI Industries; target of Rs 3550: Sharekhan

Sharekhan is bullish on PI Industries has recommended buy rating on the stock with a target price of Rs 3550 in its research report dated August 04, 2022.

August 06, 2022 / 10:39 PM IST
Rama Steel Tubes: Nomura Singapore buys 1 lakh shares in Rama Steel Tubes. Nomura Singapore bought 1 lakh equity shares in the company via open market transactions on June 15. These shares were acquired at an average price of Rs 371 per share.

Rama Steel Tubes: Nomura Singapore buys 1 lakh shares in Rama Steel Tubes. Nomura Singapore bought 1 lakh equity shares in the company via open market transactions on June 15. These shares were acquired at an average price of Rs 371 per share.

 
 
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Sharekhan's research report on PI Industries


Revenue/OPM of Rs. 1,543 crore/22.4%, up 29%/155 bps y-o-y was significantly above our estimates led by phenomenal growth in the CSM business. PAT grew by 40% y-o-y to Rs. 262 crore (19% above estimate), aided by a lower tax rate. CSM segment’s revenues grew by 42% y-o-y to Rs. 1,142 crore supported by high volume growth of 30% y-o-y and favourable pricing and currency impact of 12% y-o-y. However, domestic revenue growth was muted at 4% due to delayed monsoons. Management guided for 20% plus revenue growth (versus 18-20% earlier) for FY23 as for CSM biz. PI sees strong demand traction and domestic growth to pick-up in Q2FY23 with ramp-up of new products. Capex guidance upped to Rs. 650 crore on strong demand traction in CSM. We have increased our FY23-24 earnings estimate to factor higher revenue growth and a lower tax rate.



Outlook


We maintain a Buy on PI Industries with a revised PT of Rs. 3,550. A potential acquisition in the pharma space would improve long-term earnings growth outlook and makes us constructive on the stock. At CMP, the stock trades at 42x/34x FY23E/FY24E EPS.

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PI Industries - 050822 - khan

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first published: Aug 6, 2022 10:39 pm
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