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Market experts suggest investors should stay put in the company and can add more in case of any meaningful correction in the counter
Shares of India Pesticides Ltd on Monday got listed at Rs 360, registering a gain of 21.62 per cent against the issue price of Rs 296 on the BSE. At 12:05 pm, the stock corrected a little and quoted Rs 349.40 apiece marking a premium of 18.04%.
Listing strategy
Most brokerages had a subscribe rating on the IPO. Yash Gupta of Angel Broking suggests investors book partial profits in counter. “India Pesticides is still having the potential to touch the levels of 390-400. The company is trading at P/E (Price to Earning) of 30 times and EV/EBITDA (Enterprise Value to Earnings Before Interest Tax Depreciation & Amortization) of 22 times which is still better than the peers. On the return ratio front also, it is better off than its peers, as it has ROE (Return On Equity) of 34% and ROCE (Return On Capital Employed) of 45%,” added Gupta.
Likewise, even Saurabh Joshi of Marwadi Shares & Finance advises to stay invested in the company from a long term perspective and in case of any meaningful correction, investors can add more. “The company is one of the fastest-growing agrochemicals company in terms of volume of Technicals manufactured. They are the sole Indian manufacturer of five Technicals and among the leading manufacturers globally for Captan, Folpet and Thiocarbamate Herbicide, in terms of production capacity,” said Joshi.
About India Pesticides
India Pesticides is one of the leading agrochemicals manufacturers in India. The company operates in two business verticals; technicals and formulations. It manufactures herbicide, fungicide Technicals, and Active Pharmaceuticals Ingredients (APIs). It operates out of two manufacturing facilities in Lucknow and Hardoi in Uttar Pradesh, having an aggregate capacity of 19,500 MT for technicals and 6,500 MT for the formulations vertical.
It has registrations and licences for 22 agrochemicals technical and 124 formulations for sale in India, and 27 agrochemicals technical and 34 formulations for exports.
On the financial front, the company reported total revenue of Rs 655.37 crore in FY21 compared to Rs 346.04 crore in FY18. Whereas its profit after tax grew to Rs 134.53 crore versus Rs 43.92 crore during the same period.