India Pesticides listed on BSE at 22 per cent premium

NEW DELHI: Agrochemical firm India Pesticides (IPL) shares listed today at Rs 360 - a 21.62% premium over its issue price of Rs 296 - on the BSE. However, the stock fell 4.68 to Rs 343.15 at the session’s closing, primarily due to profit booking.

Analysts are optimistic about the stock to fetch good long-term returns for investors due to its strong fundamentals and overall growth of the pesticide industry. IPL’s revenue & profit grew at a CAGR (Compound Annual Growth Rate) of around 38% and 75% over FY19-FY21, respectively, while global agrochemicals market is expected to grow at 7% CAGR to $86 billion by 2024. 

“We like IPL given its presence in fast growing agrochemical space, diversified product portfolio and robust financials. Expanding product portfolio, growing customer base and increasing wallet share of existing customers can help IPL maintain its growth momentum. It is reasonably valued at 30.8x FY21 P/E (price earning ratio), vis-à-vis peers, while it enjoys higher RoE (return on equity) of 36%,” said Sneha Poddar, AVP, Research, Broking & Distribution, Motilal Oswal Financial Services.

The Rs 800-crore IPO (initial public offering) of India Pesticides was subscribed 29 times during June 23-25.