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PI Industries has informed the stock exchanges about an accident that happened in one section of a Multi-Product Plants (MPP) at its Jambusar fine chemicals manufacturing site in Gujarat. "This accident unfortunately resulted in two fatalities and nine others are injured," it said.
"The accident did not result in any fire or hazardous emissions but was limited to one MPP and has not affected operations of the other MPPs at the site," it added.
High deliverable volume
Reacting to this, the stocks of PI Industries opened at ₹1,385 on the BSE and slipped further to ₹1,373.45. However, it currently recovered to rule at ₹1,406, a drop of 0.94 per cent, over the previous day's close of ₹1,419.35.
On the NSE, of the 2.19 lakh shares traded, 2.17 lakh shares (almost 75 per cent) are presented for delivery, signalling value buying.
According to company, investigation has been initiated to determine the root cause of the accident. While the impact of the incident is being ascertained, the damaged equipment are fully covered by way of insurance, it said.
Management has been in touch with its customers and has appraised them of the situation. They do not expect any effect on its order book due to the incident, it further said.
According to Emkay Global Financial, PI’s Jambusar plant is a MPP catering entirely to its custom synthesis segment (exports). The plant has nine MPP, out of which one is affected due to the above incident.
The ₹20-crore hit on PAT
"In our view, a three-month shut down could maximum hit revenue/PAT of ₹60 crore/₹20 crore, which is insignificant. It would also have some inventory (15-20 days) that can be used to service exports during the plant shut down," it said.
"We await further clarity from its management on the timelines for production resumption at the unit," it added.
PI Industries had reported a net profit of ₹122.80 crore on revenues of ₹907.40 crore for the quarter ended September 2019. For FY19, the company had posted a net profit of ₹407.70 crore and revenues of ₹2,840.90 crore.
Though the stock could come under pressure due to this accident, "we believe that any significant correction offers an attractive opportunity," Emkay Globak said while maintaining a buy stance with a target price of ₹1,600, based on 28x Dec-21E EPS.
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