Buy PI Industries; target of Rs 894: Motilal Oswal

Motilal Oswal's research report on PI Industries

1QFY18 witnessed deferment in product uptake, despite better monsoon and higher major crop acreages, on account of GST transition. Domestic revenue declined 17% YoY to INR 2,848m, while exports fell 12% YoY to INR 3,000m. PI, however, expects the global companies to pump up their inventory in 2HFY18 as the global agchem market recovers, normalizing exports.

Outlook

We believe PI is well placed to leverage the turnaround in the global agchem scenario on the back of continued investment in R&D and a strong product pipeline. However, with global demand picking up only in 2HFY18, we cut our earnings estimates by 9%/5% for FY18/FY19. We maintain our Buy rating with a TP of INR 894, 25x FY19E EPS.