Buy PI Industries, target price Rs 3156: ICICI Direct

ICICI Direct has buy call on PI Industries with a target price of Rs 3156. The current market price of is Rs 2602.25. Time period given by analyst is one year when . price can reach defined target.

PI Industries Ltd., incorporated in the year 1946, is a Large Cap company (having a market cap of Rs 39611.32 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 31-03-2022, the company reported a Consolidated Total Income of Rs 1415.20 Crore, up 2.38 % from last quarter Total Income of Rs 1382.30 Crore and up 14.01 % from last year same quarter Total Income of Rs 1241.30 Crore. Company reported net profit after tax of Rs 203.80 Crore in latest quarter.

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Investment Rationale
The brokerage remains positive on PI Industries on the back of following reason. CSM business has a strong order backlog of around US$ 1.4 billion, providing a revenue visibility of more than two years. This provides CSM business to grow in high teens CAGR for the foreseeable future. Apart from this, the company also plans to expand its presence into pharma domain by inorganic route, any success around that can diversify revenue stream to a large context. Moreover, pharma business is expected to drive higher margins than agro CSM and thus, higher share of pharma over long term to improve operational performance and thereby return ratios. It values PI Industries at 40x P/E FY24E EPS to arrive at a target price of Rs 3155/share. It maintains BUY rating on the stock.


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.

(Disclaimer: Recommendations given in this section or any reports attached herein are authored by an external party. Views expressed are that of the respective authors/entities. These do not represent the views of Economic Times (ET). ET does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same. Please consult your financial adviser and seek independent advice.

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