It looks like the PI Industries story is NOT discovered [fully] by market participants YET.
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As CSM revenues contribute 60% to PI revenues and are not dependent on domestic rainfall, the deficit rainfall impact on PI is not as much as it would likely seem. More over, PI has sufficient brand pull and farmer connect that its domestic agri business is less impacted when compared to its peers – Key differentiator when compared to its peers.
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Looking into future, the contribution of CSM is going to go up which should further delineate PI business from monsoon vagaries though complete non-dependency is NOT possible.
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Further confirmation on CSM revenues visibility should lead to PE re-rating of PI (compared to PE at the current price of 600)
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The current Rupee depreciation should provide a bit fillip to its bottom line though I do not want to depend on such forex benefits as they are not sustainable in nature.
The current market price is surely a very good opportunity for accumulation and since I did not allocate fully, I’m buying into PI at this price by re-allocating capital from my existing portfolio (disclosure).
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