Stock Review: PI Industries

PI Industries is into agro-chemicals, specialty chemicals and agricultural inputs like seeds. The company's performance has been good for FY11. The company has recently gone for a stock split. They have three plants, one each in Udaipur, Ankleshwar, and in Jammu.

In the Q1 results of FY12, the company had included an odd gain worth Rs 30 crore through the sale of polymer compounding business because it was unrelated to their core business and hence, they knocked it off. They posted a PAT of Rs 48 crore for first quarter on a lower equity base of Rs 12.5 crore. 

However, traditionally Q2,Q3 and Q4 have been always the better quarters for the company. And the company has been steadily growing its research and development (R&D) arm. It has now set up an R&D center in collaboration with Sony Corporation and they will be ramping it up over the next couple of years. They have recently entered into a distribution agreement with an MNC as well for distribution of agro chemicals.

Hence, taking all these into consideration, the company is likely to post an EPS of Rs 42 to Rs 44 for FY12 on a recently reduced face value of Rs 5. I see tremendous value because of the positive view on the agri inputs company and specifically, on this stock if somebody can keep a view of about one year, they should be able to see a price target of Rs 750.