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Informist, Friday, Feb. 7, 2025

By Noopur Bhandiwad

MUMBAI – The capital expenditure for PI Industries Ltd.'s agrochemicals segment is expected between INR 8 billion and INR 10 billion, its management said in a post-earnings analyst call Friday. This vertical accounts for almost 97% of the company's overall revenues of INR 18.38 billion. 

The agro chemicals manufacturer also maintained its revenue growth guidance of high single digit for 2024-25 (Apr-Mar) announced during the September quarter, when it had slashed the guidance from 15%. Commenting on its outlook for FY26, the management said there will be better visibility and understanding in the next three to four months, given the global situations, including US policies on tariffs and others. The company said its current order book is INR 1.4 billion. The company continues to gain customer traction in the pharma vertical and added 5-10 new customers.  

PI Industries Thursday reported a net profit of INR 4.24 billion for the December quarter, down 13% on year, but beat analysts' estimates of INR 4.07 billion. The company's revenue for the same quarter was INR 17.80 billion, up 3.4% on year but lower than Street's prediction of INR 19.4 billion.

The margins of 48-50% for the pharma business have been maintained in the December quarter on a yearly basis, the management said. However, margins will improve over time as it builds and develops more contract research, development, and manufacturing organisation projects, which will reflect in the financials in the next one to one-and-a-half years.

The company also said it is on the 'right scale of path' when it comes to both the pharma and biologicals business areas. Once the revenue and business model in these segments are stabilised in the next one year or so, it will grow 20-25% in the coming period, the company said. The biologicals segment contributes to around 15% of its total revenues, the management said, and added that it is positioned very well and aims to become a dominant player in this space. The revenue from this vertical grew at a 20% compound annual growth rate over the last three years, according to an investor presentation released by the company.

The inventory scenario for the speciality chemicals business is mixed, the management said. While inventory levels have normalised for the segment, certain products are still facing an inventory stocking kind of situation. Therefore, it is difficult to summarise the pricing and inventory scenario at this stage, but the overall industry should be in a better position in the next two quarters, the management said. 

Coming back to the agro chemicals business, the company said it aims to build two new multi-product plants to meet the future requirements and the visibility of the business. Providing an update on acquisitions, the company said the large scale of acquisition is the reason why it expects investments in such acquisitions to show meaningful results in the next three to four years. The company said it will be in a much better position to sustain the kind of growth it has delivered over the last two decades, backed by a strong balance sheet and by adding two or three verticals such as pharma and biologicals.

On Friday, shares of the company closed at INR 3,543.85 on the National Stock Exchange, down 2.7%.  End

Edited by Deepshikha Bhardwaj

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