PI Industries - Q2FY21 Result Update - ICICI Securities

PI Industries reported topline growth of 28% YoY to Rs. 1158 crore, led by an improved performance from the CSM business (up 25% YoY) along with domestic formulations (up 33% YoY). Better gross margins along with lower Opex due to operating leverage expanded OPM by 310 bps YoY to 24.2%, leading to EBITDA growth of 46% YoY to Rs. 280 crore. Higher other income and lower taxes (17% vs. 27% in Q2FY20) improved bottomline growth by 77% YoY to Rs. 218 crore.

Valuation & Outlook

The company generated CFO to the tune of Rs. 544 crore (14% of TTM sales), largely on the back of a better operational performance and control on the working capital. We believe that with an increase in revenue from value added segments over the medium term, there is high visibility of margins expansion and thereby return ratios, FCF. We value the company at 35x PER of FY22E (~1x PEG). We arrive at a target price of Rs. 2540. We have a BUY recommendation on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_PIInds_Q2FY21.pdf

Shares of PI Industries Ltd was last trading in BSE at Rs.2200 as compared to the previous close of Rs. 2164.05. The total number of shares traded during the day was 33513 in over 2227 trades.

The stock hit an intraday high of Rs. 2237.5 and intraday low of 2142.5. The net turnover during the day was Rs. 73576954.

Source : Equity Bulls

Keywords