India Pesticides IPO: Brokerage Views

This post on India Pesticides IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to India Pesticides IPO or not.

Related Posts : India Pesticides IPO Review

India Pesticides IPO: Grey Market Premium etc.

  • 23-06-21 GMP Rs. 30

Consolidated Brokerage Views on India Pesticides IPO

Ajcon Global :”At the upper end of the price band of ₹296, the Company’s IPO is valued at P/E multiple of 25x on FY21 earnings which looks decent as compared to Industry Average ‐ P/E of 35x. We recommend to SUBSCRIBE for listing gains”

Angel Broking: “Based on FY-2021 PE of 24.5x and EV/EBITDA of 18.2x at upper band of the IPO price, which is slightly better than the peers companies. Similarly company having one of the best ROE & ROCE of 34% and 45% respectively. Company having avery healthy balance sheet with negative Net Debt to Equity. We expect the upcoming expansion plan and higher capacity utilisation will be the growth drivers for the company in future. We are assigning a “Subscribe” recommendation to the issue.”

Capital Market : ” Score 42/100 ; At the higher price band of R 296, the offer is made at around 25.4 times its EPS of R 11.7 for the period ended March 31, 2021, on a post-issue equity share capital of R 11.52 crore of face value of R 1 each. Listed industry peers of the company are DhanukaAgritech, Bharat Rasayan, UPL, Rallis India, PI Industries and Sumitomo Chemical India. In comparisionDhanukaAgritech trades at 21.7 times its TTM EPS of R 44.6 at the current market price of R 968, Bharat Rasayan trades at 34.4 times its TTM EPS of R 358.4 at the current market price of R 12328, UPL trades at 20.1 times its TTM EPS of R 40.1 at the current market price of R 807, Rallis India trades at 31.4 times its TTM EPS of R 10.9 at the current market price of R 344, PI Industries trades at 58.5 times its TTM EPS of R 48.7 at the current market price of R 2849 and Sumitomo Chemical India trades at 54.6 times its TTM EPS of R 6.9 at the current market price of R 378.”

Geojit Financial: “At the upper price band of Rs.296, IPL is available at a P/E of 25.4x (diluted) which appears to be reasonably priced. We assign a “Subscribe” rating for the issue on a short to long-term basis considering strong R&D, positive agrochemical sector outlook, negligible debt, healthy margins and return ratios of the company.”

KR Choksey: We believe, IPL has a good potential for future and valuation wise also available at a reasonable valuation compared to its peers. As a result, we recommend a ‘SUBSCRIBE’ rating for the IPL IPO.”

Motilal Oswal: “We like IPL given its presence in fast growing agrochemical space, diversified product portfolio and robust financials. Strong R&D, long term relations with MNCs, cost competitiveness and extensive distribution network are some of the other key positives. Expanding product portfolio, growing customer base and increasing wallet share of existing customers can help IPL maintain its growth momentum. The issue is reasonably valued at 25.3x FY21 P/E on post issue basis, vis-à-vis peers (avg. peer P/E of 36.4x), while it enjoys higher RoE of 36% (avg. peer RoE of 21%). Hence, we recommend Subscribe.”

Nirmal Bang: “The company has grown at a CAGR of 37% over FY18-21 which is fastest among the peer. The company commenced manufacturing of Technicals for herbicides in 2018 that are exported which has led to an increase in its EBITDA margins from 19.5% in FY20 to 28.2% in FY21. The management reiterated that the improvement in margins is structural and likely to continue in future as well. IPL stands out among the peer group with robust ROE, fastest sales growth and one of the highest margins. Considering the healthy balance sheet, robust revenue growth and strong cash flow generations we have a positive view on the company. At upper band of Rs 296, the PE comes to 25.4x FY21 earnings, which looks attractive. We recommend “Subscribe”.”

Prabhudas Lilladher: “At upper end price band of Rs 290-296, the issue comes at an indicative rough estimate P/E multiple of 17.1x FY23E EPS of Rs 17.3. On TTM basis, the issue is priced at 24.7x FY21 earnings which is at median valuation compared to its listed peers i.e. Rallis (@30x FY21 earnings), Heranba Inds (@ 18.5x FY21 earnings) and Astec Lifescience (@ 40.9x FY21 earnings). Hence, we recommend investors to ‘SUBSCRIBE’ to the issue.”

SMC: “Score 2.5/5 ; India Pesticides Limited is India’s leading agrochemicals manufacturer. The Company generated strong revenue and margin growth in the last 3 years. With the company’s diversified portfolio of products, long term relationship with key customers, strong sourcing capabilities, extensive distribution network and consistent track record of financial performance among its key strength, it is expected that the company would see good growth going forward. However the issue is largely offer for sale. Along term investor may opt the issue”

SP Tulsiyan Website: “Strong margins, low equity coupled with healthy growth visibility due to expansion make the IPO attractive. We recommend ‘subscribe’. “


Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above information is collated from various online sources and is for educational purpose only. Please visit individual brokerage sites to read the actual reports. Please do not make your investment decisions based on this info as it is not complete and exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.

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