PI Industries Q4 Review: Dolat Capital Downgrades To 'Reduce', Cuts Target Price On Cautious Growth Outlook

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Dolat Capital Report

PI Industries Ltd.’s Q4 revenue/Ebitda at Rs 17.9 billion/Rs 4.6 billion (+3%/+3% YoY) was impacted by weak agchem exports, but was more than offset by growth in domestic business, driven by strong Rabi season. PAT declined 11% YoY to Rs 3.3 billion due to ETR of 23.6% (10.2% in Q4 FY24).

Management guided a mid-single digit revenue growth for FY26 (4% YoY growth in FY25) owing to pressure in custom synthesis and manufacturing exports due to inventory destocking, coupled with uncertain US tariffs and persistent pricing pressure in generics in domestic business.

The Pharma business is expected to grow >75% in FY26, with Ebitda break-even a few years away. Biologicals business to grow at 5x over the next five years.

We trim our FY26/FY27E EPS by 7%/8% owing to pricing pressure stemming from input cost softening, slowing volume growth and gradual ramp-up in pharma business.

We resume coverage with a ‘Reduce’ rating with a target price of Rs 3,800 (30x FY27E EPS).

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