3 INSECTICID share price target reports by brokerages below. See what is analyst's view on INSECTICID share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
Insecticides India’s sharp contraction in gross margin by 740 bps in 4Q took everyone by surprise and was driven by sort of distress sale of generic products & heightened competitive intensity in Thimet & Nuvan (to be banned by 31st Dec 2020). This resulted in EBITDA and PAT loss for the quarter. Amidst COVID, FY21 looks to be a challenging year for INST due to (a) significant reduction in sale of Thimet and Nuvan (FY20- ~Rs 1.7 bn; FY21E Rs 450 mn) (b) INST as well as its suppliers face pressure due to labour unavailability and logistics issues (c) Challenges in the export market. Margins may continue to remain under pressure. However with expectation of several product approvals (~10-12) from CIB in FY21 and commencement of production in new capacities (technicals and export), growth in FY22 is expected to be healthy. We have tweaked our topline/bottomline for FY21E & FY22E by -5%/-29% & +4%/-16% to factor in lower profitability for Nuvan (in FY21), elevated costs due to COVID and negative operating leverage. Maintain Buy with revised target price of Rs 612 (Previous- Rs 730) based on 10x FY22E earnings.
Insecticides India’s Q3 results were impacted by inventory write down (Rs 100 mn) & distress sale of wheat herbicides in the Indian market which was banned by Pakistan, hence company had to divert it here (Rs 80 mn impact) leading to gross margin contraction of 1045 bps YoY to 74%. We have reduced our EBITDA/PAT estimates for FY20E/FY21E by 8.0%/8.5% and 8.1%/6.3% respectively. We roll forward to FY22E earnings and maintain Buy rating with a revised target price of Rs 896 (Previous TP-948) based on 12x FY22E earnings. The strategy of launching new molecules to offset the impact of molecule ban continues with 3 more launches in Q3 (total count in YTDFY20- 8). INST plans to launch 10 new molecules in FY21 most of which are expected to be 9(3). The company has reduced debt by ~Rs 1400 mn in 9MFY20 as the liquidation of accumulated stocks of Thimet and Nuvan continues. It is working on multiple fronts (proprietary off-patent, inlicensing and new discovery) to enrich its product portfolio. Timely execution of this strategy can enable INST to sustain high growth rate over the medium term.
We believe that IIL is well placed to grow in agro chemical sector in the longer run based on strong business model and robust pipeline of new products. Further, IIL is aiming to position itself as niche player by moving backward & forward and adding new products which will drive growth in the long term. We have revised our earnings estimates based on margin concerns in B2B business and lower revenue expected from product getting discontinued. The stock is presently trading at 9.6x/9.2x on FY20E/21E revised EPS of Rs 58 (Vs Rs 61.3)/Rs 60.3 (vs Rs 67.5), respectively. We maintain BUY on the stock with revised target price of Rs 663 (Vs Rs 809 earlier), valuing the stock at 11x FY21E earnings (vs 12x earlier), factoring in lower growth and margins estimates.
INST reported inline set of results driven by growth in Maharatna products. The performance is expected to sustain going forward as well, led by its strong product pipeline. INST is in the midst of transition from a me-too agrochemical manufacturer to a research-driven integrated player with focus on creating brands (+100 branded and +21 technical products) with differentiated products. It is working on multiple fronts (proprietary off- patent, inlicensing and new discovery) to enrich its product portfolio. Timely execution of this strategy can enable INST to sustain high growth rate overthe medium term. INST’s revenue from new launches (8 in FY19, 10 in FY20 and pipeline of 25 products) is expected to neutralize the expected revenue loss from FY22E due to ban of DDVP and Phorate. Backward integration for key inputs will aid in securing supplies for its Maharatna range of products apart from increasing the sale of technicals. We roll over to FY22 earningsand maintain Buy with target price of Rs 948 based on 13x Sept’21 earnings.
We believe that IIL is well placed to grow in agro chemical sector in the longer run based on strong business model and robust pipeline of new products. Further, IIL is aiming to position itself as niche player by moving backward & forward and adding new products which will drive growth in the long term. We have marginally revised our earnings estimates. The stock is presently trading at 10.7x/9.8x on FY20E/21E EPS of Rs 57.6 (Vs Rs 58.3)/Rs 63.4 (unchanged), respectively. We maintain BUY on the stock with an unchanged target price of Rs 762, valuing the stock at 12x FY21E earnings.
INST’s outperformance vis-à-vis domestic industry continued in Q1FY20. Revenue grew by 12.4% YoY driven by formulation business (particularly new launches). The performance is expected to sustain going forward as well, led by its strong product pipeline. INST is in the midst of transition from a me-too agrochemical manufacturer to a research-driven integrated player with focus on creating brands (+100 branded and +21 technical products) with differentiated products. It is working on multiple fronts (proprietary off- patent, inlicensing and new discovery) to enrich its product portfolio. Timely execution of this strategy can enable INST to sustain high growth rate overthe medium term. INST’s revenue from new launches (8 in FY19 and pipelineof 35 products) is expected to neutralize the expected revenue loss from FY22E due to ban of DDVP and Phorate. Backward integration for key inputs will aid in securing supplies for its Maharatna range of products apart from increasing the sale of technicals. We estimate 11% revenue CAGR and 7% PAT CAGR over FY19-21. Maintain Buy with target price of Rs 887 based on 13x FY21 earnings.
We maintain our estimates. The stock is presently trading at 11.1x/10.2x on FY20E/21E EPS of Rs 58.3/Rs 63.5, respectively and is trading at discount to most of its peers. We upgrade our rating on the stock to BUY (Vs ADD), post correction since our last update. We maintain our target price of Rs 762, valuing the stock at 12x FY21E earnings.
Backward integration for key inputs will aid in securing supplies for its Maharatna range of products apart from increasing the sale of technicals. We estimate 11% revenue CAGR and 7% PAT CAGR over FY19-21. Maintain Buy with revised target price of Rs887 (Previous – 896) based on 13x FY21 earnings.
We believe that IIL is well placed to grow in agro chemical sector in the longer run based on strong business model and robust pipeline of new products. We have upgraded our revenue and earnings estimates for FY20E factoring in strong FY19 and improved performance of new products. We have introduced estimates for FY21E, as well. The stock is presently trading at 12.1x/11.1x on FY20E and 21E EPS of Rs 58.3 (Vs Rs 53.3) and Rs 63.5, respectively. We recommend ADD (Vs Buy) on the stock with revised target price of Rs 762 (Vs Rs 692 earlier), valuing the stock at 12x FY21E earnings, as we roll forward our valuations on FY21E.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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