Buy PI Industries; target of Rs 4600: Anand Rathi

Anand Rathi's research report on PI Industries

PI Industries is one of India’s fastest-growing, globally-integrated, highly-innovative agri-science-solutions companies. We believe Indian companies are attractively placed due to lower labour and manufacturing costs, strong R&D backup and good relations with global manufacturers/innovators, which would eventually support growth of domestic Contract Research and Manufacturing Services (CRAMS)players.

Outlook

The stock traded at an average24x over FY11-17.It was re-rated from FY18 mainly supported byCSM business picking up well. For the last six years, it has been trading at an average 41x P/E. We value the company at 35x FY26e EPS (a ~15% discount to the last six years’ trading multiple) with a TP of Rs4,600, considering its foray into pharma, recovery in the domestic market and strong growth in itsCSM business.

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