MOSL: PI INDUSTRIES (Buy)-CSM strength intact
PI INDUSTRIES: CSM strength intact
(PI IN, Mkt Cap USD3b, CMP INR1547, TP INR1800, 16% Upside, Buy)
Revenue/EBITDA in-line; PAT below estimate
- PI maintained its strong performance, driven by both CSM/domestic agri businesses. Notably, CSM revenue grew by 19% YoY off a very high base (+40% YoY in 3QFY19). EBITDA margin improved led by operating leverage.
- Revenue/EBITDA was in line, but PAT was a miss mainly due to higher-than-expected tax rate. We broadly maintain our estimates and reiterate Buy.
CSM/domestic businesses drive growth
- Standalone revenue increased 20% YoY to INR8.5b (our estimate: INR8.3b) in 3QFY20. EBITDA grew 25% YoY to INR1.86b (our estimate: INR1.9b), with the margin expanding 80bp YoY to 21.8% (our estimate: 22.9%) led by operating leverage. However, adj. PAT grew at a lower rate of 12% YoY to INR1,204m (our estimate: INR1,306m) on account of higher depreciation, interest cost and tax rate (due to change in SEZ share to overall business), although higher other income provided some support. For 9MFY20, revenue/EBITDA/PAT grew 23%/32%/21% YoY.
- CSM revenue grew 19% YoY to INR6.4b off a high base (+40% YoY in 3QFY19) on the back of continued ramp-up in exports. In 9MFY20, PI commercialized three new molecules, taking the number of total molecules to 20+. CSM order book was flat QoQ at USD1.4b.
- Domestic business revenue grew 24% YoY to INR2.1b, mainly led by growth in volumes due to higher acreages across key crops during Rabi. Additionally, newly launched wheat herbicide ‘Awkira’ was well accepted in the market.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.