Live bseVolume Todays L/H - nse Live Volume TodaysIndia Pesticides, an agrochemicals company, saw its shares rise as high as 24 percent against the issue price at Rs 296 on July 5.Experts say the stellar debut on bourses was expected given the fair valuations of the issue, which attracted strong investor interest. Investors are advised to remain invested for the long-term due to the strong fundamentals and bullishness in the agrochemicals industry.Moneycontrol was told by Prashanth Tapse (VP Research, Mehta Equities), that India Pesticides is a competitive product with a wide range of products and strong presence in the domestic and export markets. High margins and a healthy return-on-net worth (RONW), make it a good investment option for investors.India Pesticides was founded in 1984. It is an R&D-driven, agrochemical manufacturer of Technicals. The company also has a growing Formulations business. It operates two manufacturing plants in UP, with a combined capacity of 26,000,000,000 tonnes (MT).Click Here to See All IPO Related NewsAstha Jain, Hem Securities, believes that a listing premium exceeding 20 percent is a way to take some of the company's profits. Despite this, she is still optimistic about India Pesticides' future growth.She explained that the stock was held because 19 Technicals will be off-patent in 2019-2026, and that a company with a market value of more than $4.2 billion by 2026 is likely to take advantage of this opportunity."The company is cost-competitive globally, which allows it to post superior margins. She said that the future prospects for the company are strong because of its focus on expanding its product range, geographical presence, and plans to add customers for newer molecules.Also, read - Primary Market Action this Week: 2 IPOs will hit the Street for Rs 2,500 Crore cumulative fund raisingIndia Pesticides boasts a robust product portfolio, including registrations and licenses for 22 Agrochemical Technicals, 125 formulations available for sale in India, 27 Agrochemical Technicals, and 35 formulations that can be exported.Its revenue and PAT grew at a CAGR around 38 percent to 75 percent between FY19-FY21, mainly due to an increase in exports, higher demands for agrochemical technical product & improved operating performance.Due to economies of scale, competitive pricing, and higher yields from research & development (R&D), the company had superior EBITDA margins (28%) and PAT margins (27%) in FY21.As of FY21, the company's balance sheet was healthy with a debt-to-equity ratio of 0.02x. The company's return on equity (RoE), and return on capital utilized (RoCE), remain healthy at approximately 28 percent and 17 percent, respectively (the 3-year average).Tapse states that investors can make a new entry to the stock at Rs 350 levels.: Investment tips and opinions expressed by Moneycontrol.com's investment expert are his and not those of the website or its managers. Moneycontrol.com recommends that users consult certified experts before making any investment decisions.
