Subscribe to India Pesticides: Motilal Oswal

Motilal Oswal has attain out with its myth on India Pesticides. The study agency has suggested to ''Subscribe'' the IPO in its study myth as on June 22, 2021.

Broker Analysis

June 23, 2021 / 12: 17 PM IST

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Motilal Oswal IPO myth on India Pesticides

India Pesticides Ltd (IPL) is one amongst the leading agro-chemical producer of Technicals (79% of FY21 gross sales) with a rising Formulations alternate. Main producer of Technicals with tons of portfolio: IPL is the sole Indian producer of 5 Technicals and amongst the leading producers globally for Captan, Folpet and Thiocarbamate Herbicide, in terms of manufacturing ability. Both Technicals and Formulations portfolio are successfully tons of amongst fungicides/herbicides/insecticides alongside with APIs (10% of income); thus de-risking its alternate mannequin. IPL derives 57% (FY21) of its income from exports while high 10 customers moreover make contributions 57% of gross sales.

Valuation and Outlook

The drawback is fairly valued at 25.3x FY21 P/E on post drawback foundation, vis-à-vis peers (avg. gaze P/E of 36.4x), while it enjoys better RoE of 36% (avg. gaze RoE of 21%). Hence, we counsel Subscribe.

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