P.I. Industries (PI IN) – Company Initiation – Awaiting the next spark – HOLD
Published on 26 Sep 2025
In CY11, PI Industries (PI) launched pyroxasulfone (pyroxa) – an event that sparked the interests of investors and offered them a journey of 28% CAGR in market cap based on 19%/23%/26% CAGR in sales/EBITDA/PAT until FY25. However, 7% decline in Kumiai’s (innovator) guidance on sales of pyroxa for Nov’24-Oct’25, is likely to affect PI’s CSM segment with revenue clocking 6% CAGR in FY25–28E compared with 21% CAGR in the past 5 years. The pharma business, still in ramp-up, is projected to grow ~70% in FY26 and break even by FY28 at ~Rs5bn revenue. The domestic business is expected to deliver ~6% CAGR, led by biologicals, while core formulations remain subdued. We estimate consolidated revenue/EBITDA/PAT CAGR at ~7%/8%/7% over FY25–28E, supported by new CSM launches, biologicals and pharma scale-up. At 28x FY27E EPS, the stock is trading slightly above its sector average. While R&D spending (3% of sales) remains strong, we await the next spark that could once again spur investors’ interests. We initiate coverage on PI with ‘HOLD’ recommendation and TP of Rs3,618 (28x Sep’27 EPS).
