Motilal Oswal has given Buy recommendation for PI Industries recommended buy rating on the stock with a target price of Rs 3280 in its researc with a target price of Rs. 3280 in its research report issued on May 18, 2022

Motilal Oswal’s research report on PI Industries

PI Industries (PI)’s consolidated revenue growth was primarily driven by the domestic Crop Protection segment (up 47% YoY) in 4QFY22 with CSM segment rising 11% YoY. EBITDA margin expanded 290bp YoY to 21.9% with gross margin expanding 200bp YoY. The management remains confident about delivering 18% – 20% revenue growth in FY23E with continued improvement in margins and returns. The FY23E growth momentum will be propelled by better demand for Agrochemicals in domestic business owing to robust commodity prices and normal monsoon predictions. The CSM business should grow on continued demand improvement of existing products. We retain our earnings estimates for FY23/FY24 and maintain our BUY rating on the stock.

Outlook

We maintain our earnings estimates for FY23/FY24. We value the stock at 38x EPS (in line with its three-year avg. one-year forward P/E) to arrive at our TP of INR3,280. Maintain BUY.

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