Citi initiates coverage on PI Industries with ‘buy’

MUMBAI: Citigroup has initiated coverage on PI Industries with a buy rating and a target price of Rs 1,060 citing strong long term growth prospects.

PI Industries is involved in the agrochemicals, and the custom synthesis and manufacturing businesses. The brokerage said the company’s domestic agri input business is seeing a structural demand growth and near term demand uptick driven by good monsoon this year.

Citi said the strong order book of $850 million of PI Industries’ custom synthesis and manufacturing business adds a clear revenue visibility of three to four years.

"A low pesticide consumption in India provides a multi-year growth opportunity to established players (like PI) with a pan-India presence," said Citi in a report.

Citi has also resumed coverage on UPL. UPL's ability to grow ahead of industry and improve margins over the past two years, despite tough industry dynamics and currency volatility, demonstrates the resilience of its business model, the brokerage said. Citi has a buy rating on the stock and a target price of Rs 860.