We recommend a BUY on Punjab Chemicals & Crop Protection (PCCPL), an integrated player in the agro-chemical space, which by virtue of its integrated approach and well spread distribution network is ready to exploit the promising outlook for the domestic agrochem markets. Also, PCCPL's foray into the regulated markets of Europe and South America enriches the earning visibility in near future.  Moreover, PCCPL's efforts to accquire product basket in US and consequent foray to US remains a trigger point in near term.

PCCPL is one of the leading integrated agrochemical player with a stronger presence across the agro-chem value chain i.e intermediates, technical bulk, branded formulation and wide distribution network. Apart from Agro-chemicals, it has respectable presence in Pharmaceutical Intermediates, API's, Phosphorous Derivatives and Specialty Chemicals. In the Agro chemical space, PCCPL is proud to be the largest manufacturer and exporter of oxalic acid and its derivatives in the world.  It exports technical bulk and formulations to across 60 countries.

Looking at promising outlook for the domestic agrochemicals industry and PCCPL's focus on growth through organic as well as inorganic efforts, we believe the company is well placed for stronger growth in near future. Hence we recommend a BUY on PCCPL with a 12-month target price of Rs.392. At our target price, the stock would discount FY10E EPS and EV/EBITDA by 7x and 6x respectively. At the CMP of Rs 285, PCCPL Stock trades at 5x and 6x of its FY10 EPS and EV/EBITDA respectively, which looks attractive.

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