Broker's call: PI Industries (Buy)

| Updated on January 23, 2018 Published on August 27, 2015

Dolat Capital

PI Industries (Buy)

CMP: ₹688.45

Target: ₹772

PI Industries’ niche business model insulated the company from the adverse impact of erratic agro climatic conditions in FY15.

Key highlights: a) The volume expansion of key existing products, increased contribution from innovation based products and a high momentum in commercialised molecules led to a 22 per cent y-o-y growth in revenues to ₹1,904 crore; b) Debt-to-equity ratio improved to 0.13 in FY15 from 0.25 in FY14 due to an increase in networth and the reduction in long term borrowing; c) In line with PI’s strategy to launch 1-2 new products each year, the company had launched two new products during FY15. The company has commercialised two new molecules for custom synthesis exports, which are expected to gain traction over the next few years; d) PI has signed three new agreements with the patent holders in the insecticide/ herbicide/fungicide segments to evaluate their potential in the domestic market.

We expect the consolidated revenue to grow by 20 per cent CAGR during FY15-17E on the back of higher contribution from the CSM business (from 60 per cent in FY15 to 63 per cent in FY17).

Published on August 27, 2015
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