Agri-sciences firm PI Industries share has delivered strong returns for investors during last ten years. PI Industries share price which stood at Rs 52.23 on September 30, 2010 rose to Rs 1975 in trade today. An investment of Rs 1 lakh in this stock in September 2010 would have turned to Rs 37.81 lakh today. Stock of PI Industries rose to an all-time high of Rs 2,154 on August 7, 2020.
Over the years, share price of PI Industries has outperformed benchmark Sensex. The index managed to gain a mere 90% compared to 3,681% rise in stock.
During the last one year, PI stock gained 50.78%. In comparison, the benchmark Sensex lost 1.75% during the period.
Comparison with peers
PI Industries has listed competitors such as UPL Ltd, Bayer CropScience, BASF India and Rallis India among others. The stock has outperformed its peers in terms of returns during the last ten years.
While UPL has gained 318% in last 10 years, Bayer CropScience share price has risen 490.51% during the period. BASF India and Rallis India shares have gained 126% and 103%, respectively during the same period.
PI Industries has a price to earnings (PE) ratio of 44.49 compared to the industry PE of 25.26. On the other hand, its peers UPL Ltd, Bayer CropScience, BASF India and Rallis India have PE ratios of 63.06, 44.64, -325 and 26.77, respectively. PE ratio is calculated by dividing the market price of a share by earnings per share. If a stock has PE ratio of 25, it means one needs to invest Rs 25 in the share to earn Rs 1.
Strong financial performance
In Q1 of current fiscal, PI Industries reported a 43.21% rise net profit. Share price of PI Industries rose 7.34% intra day to fresh 52-week and all-time high of Rs 1,966 on August 5 , 2020.
The manufacturer of popular adhesive Fevicol reported a 43.21% rise in Q1 net profit to Rs 145.50 crore against Rs 101.60 crore net profit in the corresponding quarter of previous fiscal.
Sales climbed 40.58% to Rs 1060 crore in Q1 against sales of Rs 754.10 in corresponding quarter of 2019-2020.
Profit before tax (PBT) jumped 43% to Rs 189.90 crore in Q1FY21 versus Rs 132.80 crore in Q1FY20. EBITDA rose 55% to Rs 236 crore in Q1 compared to Rs 153 crore in same quarter of the preceding fiscal.
During the period of 10 years too, the firm has shown significant improvement in its financial performance. For fiscal ended March 2020, the firm logged Rs 3,366 crore in revenue compared to Rs 599.08 crore for fiscal ended March 2010. Net profit rose nearly ten times during the period. For fiscal ended March 20120, the firm logged Rs 455.20 crore in net profit compared to Rs 40.95 crore for fiscal ended March 2010.
Brokerages are bullish on the stock.
Angel Broking has given a buy rating to PI Industries with a target price of Rs 2416. The stock's last traded price was Rs 1948.85. The firm is a market leader in fast growing custom manufacturing space catering to leading agrochemical companies globally.
Motilal Oswal gave a target price of Rs 2270 for the stock on August 31. It was a 16% upside to the CMP of Rs 1967 at that time.
"PI Industries has levers in place to sustain growth momentum in the near term, led by: (a) its recently established two multi-purpose plants ramping up operations, (b) revenue from the Isagro acquisition, (c) sustained growth momentum in the CSM business on account of a strong USD1.5b order book, and (d) product launches in the domestic market (two-three annually) providing earnings visibility. We expect a revenue/EBITDA/PAT CAGR of 30%/38%/49% over FY20-22E," Motilal Oswal said.
16 of 28 brokerages rate the stock 'buy' or 'outperform', nine 'hold', one 'underperform' and two sell, according to analysts' recommendations tracked by Reuters.
PI Industries Limited 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 fertilisers and hybrid seeds.