To add to Hitesh’s points, PI is placed at an interesting juncture right now…..so far management has delivered excellently by not faltering on any of its commitments given to investor community and there is no reason to believe that in future such trend won’t continue….order book of CSM is also healthy and is maintained at 2-2.5 years which is very commendable at this scale….the rich valuations that we see is all the result of these….because of its exceptional past track record, minor uncertainties or falterings might be taken lightly by the markets and in such events it might only experience a time correction rather than a significant price correction……
However at the current scale of CSM, how long can it sustain 25 % p.a. growth that needs to be seen….if it can sustain for next six to seven years even a 20% growth its valuation multiples might be in a different orbit altogether and it might get very richly valued much richer than current multiples……for that first it will have to invest more as Jambusar might not be able to serve that kind of growth for more than next 3 years…..secondly, with only agrochemical sector exposure, how scalable is the opportunity that needs to be seen as company’s attempts to diversify seems to have met with limited success so far.
Rgds.
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