PI Industries Ltd. share price target

Nominee Gold has some new competition on the block We recently interacted with the management of PI Industries (PI) after the granting of certificate of registration for Herbicide Bispyribac Sodium...

According to IBEF, specialty chemicals market has expanded at a CAGR of about 12% over FY0711; the figure is expected to rise to 13% over the next five years to reach USD 45 billion by FY17....

8 Gross margins expanded due to favourable product mix/weak INR and propped up EBITDAgrowthby11%yoy;lowertaxdrivesPATfurther(up18%)albeita3%miss 8 CSMrevenuesgrewadismal9%yoyfollowingclientdeferments(weakconsideringthe...

PI Industries' is one of the leading players in the Crop protection industry. Company largely operates under two main segments a) agriculture inputs, b) custom synthesis and contract manufacturing. Company has a niche portfolio of 34 products, which includes 5 in-licensed products and 7 co-marketing products in tie up with MNCs such as Bayer, BASF & Kumiai chemicals. Company currently operates three manufacturing sites in Gujarat, having three formulation units and six multiproduct plants for manufacturing, active ingredients and intermediates. PI has a strong distribution network of 8,000 dealers / distributors; 35,000 retailers and 27 stock points....

PI Industries (PI) reported a revenue growth of 1.2% YoY owing to muted agri-commodity prices and unfavourable weather conditions. This was led entirely by the custom synthesis segment. Lower other expenses and a better product mix led to an EBITDA margin of 21% ( 187bps) and EBITDA of Rs 1048mn ( 11%). APAT was Rs 704mn ( 19% YoY).

Revenue growth below estimate: PI reported overall revenue of INR5,110m (est. INR6,261m) in 3QFY16, a 1.2% YoY growth led by CSM business which grew 9% while agri business de-grew 13% due to lower acreages in rabi. CSM business...

Revenue growth has been weaker than expected in the CSM segment. This also shows up in weak growth in the order book from the last 4 quarters. Order book growth has been especially weak post Q4FY15. FY16E revenue estimates: CSM revenue is expected to be around Rs. 12990 Mn as against our earlier expectation of Rs. 13440 Mn. Domestic Agri business contribution is expected to be around Rs.8470 Mn as against our earlier expectation of Rs. 8811 Mn. FY17E estimates are expected to see a downward revision of Rs. 540 Mn in CSM segment and Rs. 544 Mn in Domestic Agri segment.

PI Industries (PI) reported a revenue growth of 5% YoY despite muted agri-commodity prices and unfavourable weather conditions. This was led entirely by the domestic business. Lower other expenses and better product mix led to an EBITDA margin of 19% ( 198bps) and EBITDA grew to Rs 848mn ( 17%). APAT was Rs 550mn ( 21% YoY).

PI Industries' is one of the leading players in the Crop protection industry. Company largely operates under two main segments a) agriculture inputs, b) custom synthesis and contract manufacturing. Company has a niche portfolio of 29 products, which includes 5-6 in-licensed products in tie up with MNCs such as Bayer, BASF & Kumiai chemicals. Company manufactures products from its three formulations & two technical facilities based in Jammu and Panoli. PI has a strong distribution network of 8,000 dealers / distributors; 35,000 retailers and 27 stock points. Company derives 80% of its agrichemical revenue from its top 10 products. Its key products are...