Sharekhan's research report on PI Industries
Q3 adjusted PAT grew by 13% y-o-y to Rs. 379 crore (in-line) led by robust growth in the CSM business, beat in margin which offsets subdued domestic business performance. CSM business revenue growth of 13% y-o-y to Rs. 1,631 crore, was led by volume growth and newly commercialised products. Domestic revenues fell due by 6% y-o-y given deficit monsoon in the South, depleting reservoir level, elevated inventories and pricing pressures. The management has maintained a revenue growth guidance of 18-20% (including pharma) for FY24 and believes 25-26% to be long-term sustainable OPMs.
Outlook
We maintain our Buy rating on PI Industries with an unchanged PT of Rs. 4,000. Pharma foray to diversify earnings stream and drive meaningful medium to long-term earnings growth; surplus cash of Rs. 3,296 crore to help pursue organic/inorganic growth opportunities. Stock trades at 24x its FY2026E EPS.
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