Axis Direct's report on PI Industries
Management cuts FY17 revenue guidance to 12% (15% earlier), as domestic agrichemsegment (40% of revenue) was hit by weak Southern monsoon and cash crunch. Likely to report higher growth in FY18 (our expectation at 17.5%), as CSM segment continues traction and domestic segment recovers.
Outlook
Recovery in global agrichem market or success in pharma CSM will materially improve PI’s earnings, margins and return ratios, as share of CSM (high-margin) in overall revenue mix increases. Maintain BUY with TP of Rs 1,000 (27x FY18E EPS).
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