I have been invested in PI and following the developments esp of forming JVs with global majors. This seems to be a well thought out move in an attempt to strenghthen the business and enhance the run way. Govt's focus on domestic production should provide the co with more orders from its foreign partners.
The domestic agrochem scene might be good atleast for the season with very good monsoon progress. How PI utilises this opportunity needs to be seen.
The order book of 1 billion USD inspite of consistent growth in the CSM business is quite encouraging. But management has guided for a soft h1 fy 18.
Capex announcement of close to 400 crores gives comfort about business prospects.
In the near term the key to watch out would be the first half results which the management has indicated would be soft. Any positive surprise on this front could be interesting.
Another risk factor could be pressure on its leading product nominee gold due to competition coming up. And the higher tax outgo during the year fy 18 would also affect earnings for the year on a comparative basis.
Regulatory risks remain for companies involved in exports and that applies to PI too.
Technically since past few weeks, levels of around 800 are offering support during declines. Another interesting level to watch out for is its earlier high of 787 posted back in April 2015. Here the change of polarity principle could come into play where the region of earlier resistance/top will act as a support once stock price crosses it convincingly and suffers subsequent mild declines. In this case, the stock price crossed earlier top level of 787 in Aug 2016 and has been consolidating above these levels barring the brief dip during the demonetisation time correction in Nov 2016 to levels of 730-750 from where it quickly bounced back. I would be keenly watching the levels of around 780-800 and how the stock prices behaves around these levels. Strength would be back once it closes consistently above 830-35 levels.