Prabhudas Lilladher has given Buy recommendation for P.I. Industries with a target price of Rs. 3340 in its research report issued on May 18, 2022

Prabhudas Lilladher’s research report on P.I. Industries

PI Industries (PI) 4QFY22 results were in line with our and consensus estimates. Revenue/EBITDA/PAT grew 17%/34%/14% YoY. Key highlights are: (a) CSM revenue grew 11% YoY to Rs11.1bn (FY22 +20% YoY to Rs39.9bn); although on a higher base; (b) domestic revenue grew 47% YoY to Rs2.8bn (FY22 +4% YoY to Rs13.0bn); (c) Growth of 17% YoY in 4QFY22 was largely driven by volume/price growth of 10%/7% YoY respectively (FY22 Volume/Price growth of 13%/3% YoY); (d) Gross margins improved by 200bps YoY to 44.1% YoY which negated the inflated RM cost and lower export benefits; (e) CSM order book remains steady at USD1.4bn, flat sequentially; (h) launched 4/9 new products in domestic/exports market during FY22. Going forward, PI has guided for 18-20% 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. We broadly maintain FY23/FY24 EPS.

Outlook

We expect PI to report revenue/PAT CAGR of 18%/ 23% (FY11-22, 20%/26%) over FY22-24E. Maintain BUY with unchanged TP of INR3,340 based on 40xFY24 EPS.

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