Around 1300% return in 10 years! Here's why Axis Securities is bullish on PI Industries

Shares of PI Industries have delivered around 1300 per cent return in the last 10 years. The multibagger stock is also up around 300 per cent in the last 5 years. According to Axis Securities, the momentum is likely to continue going forward as well.

 The brokerage firm has recommended a 'Buy ' rating on the stock as the stock witnessed a recent price correction due to news of Chinese players entering the Pyrosulphane business, one of the key products for PI Industries. It believes that patent protection till FY27-28 in PI key markets and on combination products will help continue to protect the CSM book.

It noted that PI has spent a total of Rs 763 crore (Pharma acquisition of Rs 497 crore) and plans further Rs 800 crore investments in new capacities. The company also has committed Rs 80-100 Cr annually to upgrade Pharma facilities and develop technological capabilities.

Moreover, PI is also looking to expand inorganically to strengthen its pharmaceuticals business. The company is also considering onshore expansion to create production capacity close to its customer markets (USA or Europe).

The brokerage firm has a target price of Rs 3,750 per share. If we look at the current share price, the stock is hovering around Rs 3400 levels. The stock hit its 52-week high of Rs 4010 on June 21, 2023, and 52-week low of Rs 2,870 on March 28, 2023.

Axis Securities said that PI Industries launched three new molecules in the quarter and plans to introduce two more in the second half of FY24, aligning with its strategy to launch 4 to 5 new molecules each year commercially.

"The company remained resilient to global macro headwinds, focusing on biological and bio-stimulant products, identifying new chemistries, and building blocks to drive future growth and this was despite certain pressures in generics," the brokerage firm added.

About the company

PI Industries is a prominent player in the agrochemicals sector and has a presence in over 30 countries and four global offices in India, Japan, China, and Germany. The company's export markets include the USA, Brazil, and Saudi Arabia, among others. 

It also owns and operates five formulation facilities and thirteen multi-product plants, producing agricultural chemicals such as insecticides, fungicides, herbicides, and speciality chemicals for use in farms. 

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