Analyst Concall
PI Ind FY25 revenue guidance cut amid weak global landscape
This story was originally published at 19:54 IST on 14 November 2024
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--PI Ind: Jul-Sept exports revenue INR 17.6 bln, up 8% on year
--CONTEXT: PI Industries mgmt's comments in post-earnings investor call
--PI Ind: Jul-Sept domestic revenue INR 4.6 bln, down 5% on year
--PI Ind: FY25 revenue growth guidance down to high single digit from 15%
--PI Ind: Revenue guidance down "in view of global industry landscape"
--PI Ind: Revenue guidance revision as customers in wait-and-watch mode
--PI Ind: Jul-Sept gross margin 52%, up 519 bps YoY on favourable pdt mix
--PI Ind: Softness in pharma products revenue due to inventory build-up
--PI Ind: See pharma pdt inventory levels normalising in coming quarters
By Ketan Barot
MUMBAI – PI Industries Ltd has revised its revenue growth guidance downwards to high single digit from 15% in view of the current global industry landscape, the management said in a post-earnings conference call with investors and analysts Thursday. In the earnings investor presentation, the company said elevated inventory levels were leading to a slowdown in product offtake in custom synthesis and contract manufacturing segment exports.
The management said Thursday that the realignment of revenue growth was on the back of this inventory buildup but said this appeared to be a short-term phenomenon that will clearly be there for another two quarters. Customers "are in a wait-and-watch mode... (and) everyone is monitoring their inventory levels," the management said.
The management said the inventory issue was affecting existing products and this was due to a "general pressure on companies (customers) to rationalise their working capital."
In the September quarter, revenue increased to INR 21.31 billion from INR 19.69 billion. The company's export revenues were up 8% to INR 17.6 billion and domestic revenues were down 5% to INR 4.6 billion in Jul-Sept.
The gross margin of the company expanded 519 basis points to 52% from 47% on year and its earnings before interest, tax, depreciation, and amortisation was up 14% on year to INR 6.29 billion from INR 5.53 billion. The company said the improvement in these margins was on account of a favourable product mix consisting of new and existing products in exports during the quarter.
The company's pharmaceuticals business saw soft revenues, the management said. The company said the softness is temporary and the key reason behind it is low inventory picking level. One of the company's customers filed for bankruptcy, causing the company to hold the products supplied to them, subsequently increasing inventory, the company said. The company expects inventory levels for pharmaceutical products to normalise in the coming quarters. End
Edited by Deepshikha Bhardwaj
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