Anand Rathi Research has upgraded PI Industries to 'Buy' with target price of Rs 1,058 in its report.

Commenting on the investment rationale, Anand Rathi said, ''De-monetization, lower exports and scanty rains in south India hurt PI Industries’ Q3 revenue, which declined 4.5% yoy. But a favourable product-mix and operating leverage led to the margin improving 101bps yoy to 21.2%. Launches of products/molecules and constant capacity expansion would propel top-line and margin growth. On rolling over valuation to FY19, we upgrade our recommendation.

''PI has been generating positive cash flows over the years and has maintained the growth momentum over the quarters. Robust export growth, product launches and a visible pipeline of high-margin in-licensed products could lead to a 20% EPS CAGR over FY16-19.''

''We upgrade the stock to a Buy on account of rolling forward our PE multiple to FY19, and assign a PE of 23x FY19e. We arrive at a target price of Rs 1,058 (earlier Rs 824). Risks. Mounting competition and disruption in demand,'' it added.

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