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Informist, Tuesday, Aug. 12, 2025

By Eshitva Prakash

MUMBAI – PI Industries Ltd. is expected to post a year-on-year decline in its bottom line for the June quarter, according to brokerages tracking the company. PI Industries, like other companies in the sector, is likely to see volume growth but a compression in margin due to increase in prices of raw materials such as sulfur and rock phosphate. A higher tax rate will also hurt the company's net profit despite sales of new molecules and robust domestic demand contributing to a healthy growth in top line.

The company's standalone net profit for the June quarter is expected to be INR 4.70 billion, down 5.9% from the year-ago quarter but up over 21% on quarter, according to the average of estimates from nine brokerages tracking the company. The highest estimate for net profit is INR 5.27 billion from Emkay Global Financial Services Ltd. while the lowest is INR 3.89 billion from Motilal Oswal Financial Services Ltd.

The agrochemicals producer is expected to post net sales of INR 22.80 billion, up 13% from the year-ago quarter and up 38% sequentially. The company had posted net sales of INR 20.12 billion in the year-ago quarter. The highest estimate for the company's net sales is INR 24.41 billion from Nuvama Wealth Management Ltd. while the lowest estimate is INR 21.06 billion is from Motilal Oswal.

PI Industries is an agrochemical company with manufacturing facilities in Gujarat. The company specialises in crop protection products, specialty plant nutrients, and custom synthesis manufacturing. The company develops and manufactures custom molecules for global agrochemical players and exports them to over 60 countries. Its product portfolio includes insecticides, herbicides, fungicides, and custom chemicals for various industries.

The outlook for exports has improved as the phase of inventory destocking appears to be largely over and fresh demand is now driving growth, brokerages said. However, analysts expect the agrochemical sector as a whole to see a surge in raw material prices for sulfur and rock phosphate due to geopolitical conflicts in West Asia as well as export curbs from China.

Analysts expect higher tax expenses to drag down the company's net profit for the June quarter. The company's effective tax rate is expected to climb to 23% from 21% in the year-ago quarter, according to Nirmal Bang Equities Pvt. Ltd. Uncertainties over US tariff are expected to lower the company's export earnings.

The domestic agrochemical business is set for a strong quarter, with projections of 15% on-year revenue growth, according to Emkay Global. The brokerage attributed this growth to early rainfall, better sowing trends, and robust product placement driven by expectations of a normal monsoon, which could lead to sharp consumption growth at the farm level, according to Elara Securities (India) Pvt. Ltd.

Analysts agree that PI Industries' custom synthesis and molecules vertical will continue to lead its performance, despite the expected flat on-year volumes of pyroxasulfone, which is a herbicide. "PI has witnessed a price correction of up to 7 to 8% in pyroxasulfone vs last year, while volumes are stable," Emkay Global said.

"PI Industries is likely to gain from higher sales of Pyroxasulfone to the US, driven by concerns over potential reciprocal tariffs. However, we believe this growth may be short-lived, given unchanged guidance from Kumiai Chemicals (innovator of Pyroxasulfone) coupled with high base in the last year," Dolat Capital Market Pvt. Ltd. said. The company's custom synthesis and molecules vertical is expected to grow on the back of on-year non-pyroxasulfone sales growth and increased sales of new and existing molecules.

The company's long-term growth prospects remain strong, supported by a development pipeline of over 90 molecules and the eventual ramp-up of its pharma segment, according to Motilal Oswal. The pharma segment contributed to 5% of the company's revenue in the trailing quarter. PI Industries will announce its June quarter earnings Tuesday. Analysts are monitoring new orders in the custom synthesis and manufacturing segment, demand for pyroxasulfone, and the performance of the pharmaceutical segment.

The company is expected to post earnings before interest, tax, depreciation, and amortisation of INR 6.29 billion. The company's highest EBITDA is estimated at INR 7.10 billion by Emkay Global and the lowest is estimated at INR 5.27 billion by Motilal Oswal. "We expect EBITDA margin of 30% on better operating leverage," Emkay said.

At 1201 IST, shares of PI Industries traded at INR 3,860.90 on the National Stock Exchange, up 0.2%. The shares have risen more than 2% since the company announced its March quarter earnings. Of the 16 brokerage reports available on the company with Informist, nine have a 'buy' recommendation on the stock with an average target price of INR 4,460. Four brokerages have a 'sell' recommendation while three brokerages have a 'hold' recommendation.

Following are the Apr-Jun earnings estimates for PI Industries based on reports from nine brokerages in the descending order of the net profit:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Ashish Shirke

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