PI Industries - Buy with target price of Rs. 148 - Dolat Capital

We expect uptick in volume growth in the Agri-inputs business to be mainly driven by scale up in new launches. The Jambusar SEZ (CSM exports) has gone onstream in Q3FY13E and we estimate contribution of Rs. 1152mn and Rs. 1872mn to the topline in FY14E & FY15E respectively. Order book position stands comfortable in the range of USD 305-308mn. So far 14-15 products have been commercialized.

- We expect 23% revenue CAGR over FY13-15E, aided by rising contribution from CSM (from 43% in FY12 to 57% of sales in FY15E). We however have built in a conservative view on the Agri-inputs segment, given the near term 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, OSHEEN and BIOVITA (PGN).

- The company successfully concluded QIP of Rs. 1.17bn (post dilution equity now at Rs. 135.46mn). The QIP proceeds shall be utilized towards capex and working capital requirements and also latent inorganic opportunities.

- We expect 32% earnings growth over FY13- 15E assuming a non dilutive Capex. At CMP, the stock trades at 11.3x FY14E and 8.9x FY15E earnings. Recommend 'Buy' with a target price of 148 (11x FY15E earnings).

Source : Equity Bulls

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