Buy PI Industries - Dolat Capital

- PI's complementary business model - domestic agri business and custom synthesis focused on export market, positions it well to capture the structural opportunity playing out in the Agrochem space in India and globally. We also view this model as good hedge and achieve to earnings stability with strong visibility on high margin CSM business.

- We expect uptick in volume growth in the Agri-inputs business to further accelerate for the rabi season (2HFY13E). The Jambusar SEZ (CSM exports) is expected to commercialize in Q3FY13E and we estimate a contribution of ' 500mn to the topline in FY13E.

- We expect 27% revenue CAGR over FY12-14E, aided by rising contribution from CSM (from 43% in FY12 to 50% of sales in FY14E). We however have built in a conservative view on the Agri-inputs segment, given the underlying market conditions.

- The management aims to replicate its success story over Nominee Gold with gradual new molecule additions which primarily shall be tie up based (65% of agri sales). Some of the other established brands are ROKET, SIMBAA, CLUTCH and BIOVITA (PGN)

- We expect 33% earnings growth over FY12- 14E assuming a nondilutive Capex. At CMP, the stock trades at 11.9x FY13E and 8.9x FY14E earnings. Recommend 'Buy' with a target price of Rs.646 (11x FY14E earnings).

Source : Equity Bulls

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