Strong manufacturing capabilities and deep relationships with global agrochemical companies is PI Industries strength; recent acquisition is highly value accretive

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PI Industries manufactures agrochemicals for domestic market and contract manufacturing for exports. The major strength of the company is its relationship and trust of large global agrochemical companies for whom the company undertakes contract manufacturing post R&D on new molecules. Recent acquisition of Ind Swift’s bulk drugs business is highly value accretive and opens up huge market for the company which it can access through its superior technical strengths. There is also the CRAMs opportunity which the management will pursue. Main risk is volatility in earnings due to uncertain supply contracts and failure of monsoons for domestic business. We have an over weight view on the stock due to decent earnings visibility and fair valuations – 09-08-2021 Price: 3140.45 Rating: Over Weight Recommendation: Buy

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