Fundamentally strong stock to buy now for an upside of more than 20%

PI Industries is engaged in the business of – Agri inputs, fine chemicals, and (CRAMS) contract research and manufacturing services. and it is a leading player in the agrochemicals space, having a solid presence in domestic and export markets.

Shares of PI Industries Ltd. were trading at ₹ 3455.10 gaining 1.06 % on Thursday’s trading session from the previous close price of ₹3415. The company has a market cap of ₹ 52,420 crore.

Having a quick walkthrough of the financials, their operating revenues decreased from  ₹ 1,613  crores in Q3 to ₹1,565 crores in Q4. Similarly, having a YoY comparison of the metrics, the revenues significantly increased by 22.5 percent from ₹ 5,299 crores during FY 21-22 to ₹ 6,492 crores in FY 22-23.

The net profits of the company, during the previous quarter, declined from ₹351 crore in Q3 to ₹279 crore in Q4. For YOY comparison, PAT numbers have significantly increased by 45 percent, from ₹ 840 crores during FY 21-22 to  ₹ 1,222 crores in FY 22-23.

Having a positive outlook for the company, here are the targets given by analysts:

Axis Securities

The brokerage has given a buy call on PI Industries Ltd. with a target price of ₹ 4000. The brokerage recommended that a stop-loss be kept at ₹2850. This is an upside of 16%.

Sharekhan brokerage 

The brokerage has recommended a buy call on PI Industries Ltd. with a target price of ₹ 4200 indicating an upside of 21%.

The rationale behind giving such a recommendation is 

• To integrate its R&D capabilities, PI Industries completed the twin acquisition through PI Health Sciences Ltd., a 100% subsidiary of PI.
• In Hyderabad, a new pharmaceutical research centre is being built. The management estimates a topline of 550-600 Cr with EBITDA margins of 15-18%.

• Working capital improved to 75 days in FY23 vs. 94 days YoY.
• 4 new molecules were launched in FY23, & plans are to launch 5 new molecules in FY24, with 40+ products in development stages.

According to the latest data pertaining to the shareholding pattern, promoters of the company hold a 46.09 percent stake, and foreign institutional investors (FIIs) hold an 18.59 percent stake in the company for FY 22-23.

Written by Omkar C

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