Midcap Agri Sciences Stock You Can Buy For Good Returns In 2023 & Beyond

Sharekhan has recommended certain stocks in the month of December. We have picked a stock called PI Industries from their report where there is a good potential for the stock to give good gains. The company is a top player in the agrochemicals and agri sciences business.

Commercialization of new molecules

According to Sharekhan PI Industries' new molecule commercialisation is expected to remain robust as the company targets to commercialise 7 new molecules (1 molecule already commercialised in H1FY23) in CSM in FY23 post commercialisation of record 9 new molecules (which would witness ramp-up in coming years) in FY22. Additionally, the company have more than 40 new products at different development stages of which > 35% is in non agrochemicals.

Increase in order book

"The company also saw a sharp increase of $400 million in its CSM order book to ~$1.8 billion (~$1.4 billion in Q1FY23) and the same bodes well for sustained growth in export business. The rise in CSM order book was led by higher order from existing agrochemical products and commercialisation products in last 3-4 years. Continued scale-up in demand of the existing products and a robust R&D focused approach here to drive incremental business. Overall, we expect 22% CAGR in CSM revenues over FY22-25E and growth could further accelerate with likely launch of non-agrochemical products," Sharekhan has said.

New launches

According to Sharekhan, Domestic biz sees strong product launches - expect 17% revenue CAGR over FY22-25E. The company has launched 5 new products in the domestic market in H1FY23 and targets to launch 2 more products in Q3FY23. Moreover, the Additionally, PI has 17 new products at various stages of development and registration in the domestic market. Ramp-up of new products, higher growth for existing products and solid demand for Rabi season are key drive for PI's domestic agrochemical business. "We expect domestic formulation to business to register industry leading revenue growth of 17% over FY22-25E," the brokerage has said.

Buy Industries for a price target of Rs 4200

According to Sharekhan, Demand remains encouraging in both domestic (strong Rabi season outlook) and export markets (order book of $1.8 billion) and the company has guided for 20%+ revenue growth and higher margins for FY23.

"Commissioning of additional capacity and contribution from newly-launched brands would fuel growth. Moreover, the Rs. 2,000 crore raised via the QIP is expected to be deployed for acquisition of pharmaceutical assets and drive inorganic growth over medium to long term, apart from diversifying its business and enhancement of technological capabilities," the brokerage has said. It has recommended buying the stock of PI Industries with a price target of Rs 4200 on the stock.

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.