MOSL: PI INDUSTRIES (Buy)-Outperformance on all fronts; Better global sentiment/high-potential new launches reinforce outlook
PI Industries: Outperformance on all fronts; Better global sentiment/high-potential new launches reinforce outlook
(PI IN, Mkt Cap USD1.7b, CMP INR885, TP INR1023, 16% Upside, Buy)
- Beat on all fronts; margin expansion driven by operating leverage: Revenue increased 32% YoY to INR7,075m (our estimate: INR5,943m) in 3QFY19. EBITDA grew 42% YoY to INR1,486m (our estimate: INR1,094m), with the margin expanding 150bp YoY to 21.0% (our estimate: 18.4%). Adj. PAT, thus, increased 33% YoY to INR1,073m (our estimate: INR796m). For 9MFY19, revenue grew 21% YoY to INR20,361m, EBITDA increased 12.3% YoY to INR4,013m (margin contraction of 150bp YoY to 19.7%) and adj. PAT grew 9% YoY to INR2,834m.
- Exports impressive; domestic biz makes good progression against multiple headwinds: CSM business delivered robust growth of 40% YoY, backed by higher demand due to an improvement in global sentiment. PI aims to capitalize on the improved global market by investing INR3b-3.5b per year over the next two years. Domestic business performance was notable in that it grew by 10% YoY, despite facing headwinds in the form of erratic rainfall in key states and poor price realization for key crops, which impacted demand and led to higher inventory levels.
PI Industries Limited is a holding company. The Company is engaged in the manufacturing and distribution of agro chemicals. Its geographical segments include Sales within India and Sales outside India. The Company manufactures agrochemicals, plant nutrients and plant protection, specialty fertilizers and hybrid seeds. It offers insecticides under various brands, including LEPIDO, DODGER, COLT, OSHEEN, COLFOS, FOSMITE, JUMBO, FORATOX, CARINA, MAXIMA and VIBRANT. The Company offers fungicides under brands, which include CUPRINA, LURIT, KITAZIN, SANIPEB, CLUTCH and LOGIK. It offers herbicides under the brands, including SOLARO, NOMINEE GOLD, INRO, BINGO, PIMIX, BUNKER and MELSA. Its specialty products include BIOVITA Granules and BIOVITA Liquid. The Company provides services in various areas, including contract research, process development, analytical method development, process safety data generation and process detailed engineering.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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