Buy PI Industries, target price Rs 3450: Prabhudas Lilladher

Prabhudas Lilladher has buy call on PI Industries with a target price of Rs 3450. The current market price of PI Industries Ltd. is Rs 3138.65. Time period given by analyst is one year when PI Industries Ltd. price can reach defined target.

PI Industries Ltd., incorporated in the year 1946, is a Large Cap company (having a market cap of Rs 47646.32 Crore) operating in Pesticides/Agro Chemicals sector.

PI Industries Ltd. key Products/Revenue Segments include Agri inputs, Export Incentives, Sale of services and Scrap for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 1567.30 Crore, up 10.75 % from last quarter Total Income of Rs 1415.20 Crore and up 28.31 % from last year same quarter Total Income of Rs 1221.50 Crore. Company reported net profit after tax of Rs 258.50 Crore in latest quarter.

Investment Rationale
PI Industries (PI) 1QFY23 results were better 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. It broadly maintains FY23/FY24 EPS. It expects PI to report revenue/PAT CAGR of 19%/ 25% (FY11-22, 20%/26%) over FY22-24E. It maintains BUY with revised TP of Rs3,450 (earlier Rs3,340) based on 40xFY24 EPS.

Promoter/FII Holdings
Promoters held 46.74 per cent stake in the company as of 31-Mar-2022, while FIIs owned 23.1 per cent, DIIs 18.66 per cent.