HDFC Securities is bullish on PI Industries has recommended buy rating on the stock with a target price of Rs 900 in its research report dated 07 Aug 2018.
HDFC Securities' research report on PI Industries
PI Industries’ (PI) 1QFY19 Sales/EBITDA/PAT are not comparable on a YoY/QoQ basis due to change in the accounting standards to modified retrospective approach. The numbers hereon till 4QFY19 will not be comparable on a YoY basis. Though the gross margins were under pressure due to supply constraints and China’s situation, PI has been trying to de-risk its procurement by moving away from the Chinese sources.
Commercialization of 3-4 molecules every year is likely to propel the domestic growth. PI also has a strong capex plan of ~Rs 2.5 bn (asset turns of 1.5x) and is expected to add 2 multipurpose plants by end of FY19. We remain positive on PI and Maintain BUY with a TP of Rs 900/sh (25x Jun’20EPS).
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