PI Industries may test Rs 660, says Ravi Shenoy

Ravi Shenoy of Motilal Oswal Securities told CNBC-TV18, "We like the business of PI Industries because there are two sets of businesses with the same chemistry scale that the company has. One is the domestic agrochemical business which depends upon monsoons. In the last two years, we have had pretty bad monsoons and that has impacted agri production and demand for PI Industries' products. This year we are expecting what is known as La Nina effect and we are starting to see effects of that starting now. So, as that effect becomes stronger we are expecting monsoon in India to be better and probably that is likely to boost demand for PI's products within India itself.""The second part is that the custom synthesis business which is also known as the cramps business in the pharma world, PI Industries does custom synthesis on the agro chemical side and it is sitting on large book. So, today its book is about 3x its revenue. This business is about 60 percent off its total revenues. So, we are expecting almost 26 percent kind of compound annual growth rate (CAGR) because of growth in both businesses," he said."On one side you have a stable cramp sort of a business. On the other side you have a slightly volatile domestic agro chemical business which is likely to have tailwinds from good monsoon coming in. So, that is a hope play for us. We would bet on the stock with a target of Rs 660."