Prabhudas Lilladher is bullish on P.I. Industries has recommended buy rating on the stock with a target price of Rs 1278 in its research report dated July 26, 2019.
Prabhudas Lilladher's research report on P.I. Industries
PI Industries's (PI) results and management commentary on future outlook indicates robust business momentum and clear growth visibility for 2-3 years, despite gloomy agchem environment globally and negative business outlook from one of its key clients. Sizeable sustained capex guidance (Rs4.0-4.5bn p.a. for the next 2-3 years) for investment in 4 new plants (2 in FY20 & FY21 each), increasing number of products moving from R&D stage to commercialisation and continued demand traction for existing products gives us comfort of superior earnings growth visibility for the next 2 years. Domestic business is expected to see tepid growth due macro headwinds but outperformance is likely to continue with the launch of 2 potential-blockbuster products i.e. PB Rope L and Pyroxasulfone. On the CSM side, PI is also building blocks for diversification from agchem to electronic chemicals, magnetic chemicals and early stage intermediates of pharma to maintain its growth momentum over the next decade.
Outlook
Topline/EBITDA/PAT are expected to grow at a CAGR of 20%/27%/24% driven by superior earnings growth visibility on the back of sustained business momentum. Maintain BUY with target price of Rs1278 based on 28x FY21E earnings.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More
