Buy PI Industries; target of Rs 941: Cholamandalam Securities

Cholamandalam Securities is bullish on PI Industries has recommended buy rating on the stock with a target price of Rs 941 in its research report dated October 05, 2018.

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October 05, 2018 / 17:03 IST

26 Aug, 2025 12:21

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Cholamandalam Securities' research report on PI Industries

During the last season, Bispyribac Sodium’s market size has grown by around 43% YoY to ~1,000KL and over the next two years, it is expected to grow at a CAGR of ~40%+ to reach ~2,000KL, largely led by deeper penetration. However, due to generic competition the price of Bispyribac Sodium has corrected by ~15-20% from its peak and management expects the pricing delta between company and generic player will remain stable going forward. PI currently has 65-70% market share in the Bispyribac sodium market, through its brand Nominee Gold and it is available in 60,000+ counters in all major rice belts. Osheen, a broad spectrum insecticide (launched in FY13) continues to be a blockbuster product for PI Industries and it has been growing at a CAGR of 80%+ over the last two years as the company expands its offering to multiple crops. Management expects Osheen growth to continue in the range of 35-40% till FY20 and expect to return to stable growth of 15-20% from FY21 onwards.

Outlook

We are positive on the long term fundamentals of the company, given its strong link with global innovators, strong product pipeline, comfortable order book position and capacity addition in the CSM business. At CMP of INR 698, PI Industries is trading at 23.1XFY19E and 19.3XFY20E earnings. We are valuing the stock at 26XFY20E EPS to arrive at a target price of INR 941 and maintain BUY rating.

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