Fertilizer and explosives business IPL has fallen over -20% in 2023, and its recent 1H23 earnings miss of around 7-10% continues to weigh on the stock i.e. the weak keeps getting weaker. The stock is now relatively cheap trading on an 8x PE for 2023 but the downside momentum suggests a test of $2.50 is a strong possibility as the stock plumbs fresh multi-month lows. On Tuesday IPL was hit with the fresh news that Jeanne Johns will be stepping down from her role as CEO at the end of this month. The business could still add value by demerging its explosives and fertilizer operations but while we believe this corporate move will at least raise its head again it may not be until 2024.
- We see no reason to catch this falling knife in today’s market environment in which investors aren’t chasing turnaround stories.
MM is neutral to bearish on IPL
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