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CSEC Research
PI Industries (Outperformer)
CMP: ₹750.05
Target: ₹836
PI Industries was incorporated in 1947 (as Mewar Oil & General Mills) with its registered office in the lake city of Udaipur, Rajasthan.
PI Industries currently operates three formulations and two manufacturing facilities as well as eight multi-product plants under its three business units across Gujarat. Revenue grew by 15.4 per cent y-o-y (+12.9 per cent q-o-q) at ₹683.4 crore aided by the CSM (certified scrum master) business which grew by 20 per cent y-o-y to ₹340 crore; despite delayed monsoon and high channel inventory, revenue from domestic agri inputs grew by 10 per cent to ₹343 crore.
We are positive on the long-term fundamentals of the company, given its strong link with global innovators and strong product pipeline, among others.
Risks: Increasing competition in the herbicide product segment, accounts for 30 per cent of domestic business. Pesticide demand is linked to monsoons and in years of poor monsoon demand goes down drastically.
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