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Informist, Wednesday, May 20, 2026

 

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--PI Ind: Believe agrochem industry is coming out of downcycle
--CONTEXT: Comments by PI Industries' mgmt in post-earnings analyst concall
--PI Ind: See growth in FY27 led by pharma, biological ops, new chemicals
--PI Ind: Will focus on improving gross margin going forward
--PI Ind: Macro situation volatile, difficult to predict EBITDA margin
--PI Ind: Expect high growth in nematicide pdt, especially in Brazil, US
--PI Ind: Aim for revenue of INR 100 mln from electronic chems in 4-5 yrs
--PI Ind: Prefer to hold mkt shr via volume growth, instead of margin growth
--PI Ind:Aim sales of INR 5 bln-INR 6 bln from pharma ops in couple of years
--PI Ind: Expect to incur capex of INR 7 bln-INR 8 bln in FY27
--PI Ind: Expect high single digit to low double digit revenue growth FY27
--PI Ind: Expect to maintain FY27 gross margin at FY26 levels

 

By Eshitva Prakash and Arya S. Biju

 

MUMBAI – PI Industries Ltd. expects to report a high-single to low double-digit revenue growth in 2026-27 (Apr-Mar), its management said at a post-earnings conference call with analysts. The company's management reiterated that the revenue guidance is contingent on its ability to manage input cost volatility. The recent volatility in the supply of key chemicals for fertilisers and other products, due to the war in West Asia, has hit the company's agrochemical business hard. In FY26, the chemical company reported a near-16?ll in consolidated revenue to INR 67.14 billion and a 20?cline in net profit to INR 13.21 billion.

 

"The conflict in the Middle East (West Asia)... (has) introduced a fresh layer of disruption that the industry was not anticipating," its Vice Chairman and Managing Director Mayank Singhal said. "While the pressures are difficult, they have also reinforced the strategic value for geopolitical diversification... we expect to deliver growth with exposed and global biological instructions, backed by customer momentum, as well as domestic business is expected to gain from the new brand launches," he said.

 

The company sees the agrochemical industry's down cycle coming to an end. Speaking of opportunities unique to the company, its management sees its biological and pharmaceutical contract research and manufacturing services operations, as well as new chemical entities, as key growth drivers going forward. Continued traction in its biggest revenue-generating molecule, Pyroxasulfone, will also support growth.

 

The company's consolidated revenue from operations for the March quarter declined by over 12% on year to INR 15.65 billion. It reported a net profit of INR 2.0 billion for the quarter, down over 39% on year. The company's bottom line and top line missed the Street's estimates.  

 

The company's management said it expects to maintain the gross margin in FY27 at last year's level. In FY26, the company's gross margin was 58%. Citing volatility in supply and, consequently, in input costs, it refused to provide guidance on its earnings before interest, taxes, depreciation, and amortisation margin. "Given the present environment that we're in, given the present demand, the volatility of the various multiple factors, whether it's input costs or whether it's other cost structures and other challenges, I would say our target is always to say how we can continue to manage them (EBITDA margin and gross margin) and beat them better," Singhal said. 

 

The company's consolidated EBITDA margin was 22% in the March quarter, down from 26% a year ago. 

 

"Well, our focus today would be to continue to hold the market share in volume, because the margin could always return if the market swings. That's the business focus, right, given the volatility that we see. And that does not mean that the margin will not come, but they are more volatile in nature right now," Singhal said.

 

The company's management expects to achieve revenues of INR 5 billion to INR 6 billion from its pharmaceutical business. Asked when the company expects the business to turn profitable, an official said that an EBITDA breakeven is likely once the pharma business achieves the aforementioned top line. "Right now, the company is focused on building capabilities, offerings, and building customer confidence (rather than) looking at the value of EBITDA," he said.

 

Regarding other products, the company's management said it has high hopes for its unique nematicide, especially in Brazil and the US. "Most of the nematode products which are there in the world today are mainly applied in the soil... There is hardly any such product which can be a foliar application," an official said. "We have already launched it in Brazil and Mexico, and the US is a third market," he said. "In Brazil, we are basically seeing this year that we should be almost more than tripling our sales for this particular product. It's a product which competes very well with synthetic chemistry products."

 

The company expects to generate revenue of INR 100 million from its electronic chemicals segment over the next four to five years. "Certainly with time, we will definitely look at that target... We would love to do that," a company official said when asked if the electronic chemical business could be an INR 10 billion opportunity for the company.

 

"We should have 700 to 800 crores (INR 7 billion to INR 8 billion) of capex (capital expenditure) this (financial) year as well," the company said. It expects to use these funds to build new capabilities at the manufacturing level, for new launches, research and development spends, and the pharmaceutical and agrochemical business.

 

Wednesday, shares of the company ended over 7% lower at INR 2,901.20 on the National Stock Exchange.  End

 

Edited by Saji George Titus

 

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