Prabhudas Lilladher's research report on P.I. Industries
PI Industries (PI) 1QFY23 results were better that our and consensus estimates. Revenue/EBITDA/PAT grew 29%/39%/40% YoY. Key highlights are: (a) CSM revenue grew 42% YoY to Rs11.4bn (volume/price growth of 30%/12% YoY); (b) domestic revenue grew 4% YoY to Rs4.0bn (largely drive by prices); (c) Gross margins remained flat YoY to 43.8% YoY primarily led by better product mix and price hikes in the recent past; (d) CSM order book remains steady at USD1.4bn, flat sequentially; (h) launched 3/1 new products in domestic/exports market during 1QFY23; to launch 2/6 more in subsequent quarters. Citing the robust demand momentum, PI has guided for +20% YoY growth in revenues with margins likely to improve from current levels primarily led by strong enquiries in the CSM business and new launches in the domestic segment. We broadly maintain FY23/FY24 EPS.
Outlook
We expect PI to report revenue/PAT CAGR of 19%/ 25% (FY11-22, 20%/26%) over FY22-24E. Maintain BUY with revised TP of Rs3,450 (earlier Rs3,340) based on 40xFY24 EPS.
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