Sharekhan's research report on PI Industries
Q1 performance was robust with stronger-than-expected CSM revenue growth (ex-pharma) of 33% y-o-y and 149 bps beat in OPM to 24.5% (up 166 bps y-o-y) despite one-time expenses related to pharma acquisition. Thus, consolidated PAT of Rs. 383 crore (up 46% y-o-y) was 21% above our estimate. Revenue growth of the CSM business was led by 29% volume growth and 4% benefit of price/currency/product mix. However, domestic revenue declined by 13% y-o-y as volume was impacted by delayed monsoon. Higher margin reflects the benefit of operating leverage and better product mix. Q1 pharma revenue stood at Rs. 44 crore. Management maintained its revenue growth guidance (ex-pharma) of 18-20% for FY2024 and expects to sustain the current margin. Although the company is not seeing any impact on demand for its products from global inventory destocking in the agrochem industry, it is cautiously optimistic on growth in the backdrop of the current challenging industry environment.
Outlook
We maintain our Buy rating on PI Industries with a revised PT of Rs. 4,500. Pharma foray to diversify the earnings stream and drive meaningful medium to long-term earnings growth; surplus cash of Rs. 2,807 crore to help pursue organic/inorganic growth opportunities. The stock trades at 33x its FY2025E EPS.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
