PI Industries gains after decent Q3 performance

On a consolidated basis, PI Industries reported 12.4% rise in net profit to Rs 121.10 crore on a 20.1% increase in net sales to Rs 849.80 crore in Q3 December 2019 over Q3 December 2018.

The increase in revenues is driven by good recovery in domestic business with 24% improvement and continued ramp up in exports with 19% Y-o-Y growth. Higher acreages across key crops during Rabi helped PI's portfolio of brands deliver healthy volume gains. Newly launched wheat herbicide 'Awkira' showed promising acceptance. Exports continued to report scale-up, as per plan.

Profit before tax or PBT in the December quarter stood at Rs 169.80 crore, up by 21.7% from Rs 139.50 crore in Q3 December 2018.

EBITDA jumped 24.6% to Rs 186 crore in Q3 FY20 from Rs 149 crore in Q3 FY19. EBITDA margin stood at 21.9% in Q3 FY20 as compared to 21% in the same period last year. Enhanced product mix and moderation in cost of inputs supported the earnings momentum.

Commenting on the performance, Mayank Singhal - vice chairman & managing director, PI Industries, said: "Our Q3 performance remains on trend, where a 20% blended increase was delivered. Domestic sales benefited from higher acreages across all major crops. 'Awkira', our new-gen. herbicide has found great acceptance and we are focusing on building the brand strongly within Wheat, Maize and Soybean.

Exports present an attractive runway for growth. We have added 3 new molecules to our commercialized portfolio this year. The business is seeing timely addition of capacities at Jambusar and we should operationalize new plants in the present quarter. The order book position stands robust and we are getting good quantum of fresh enquires from innovators.

Our strategic objective is to sustain current growth momentum, diversify into niche business areas beyond agchem where we can leverage our current capabilities & reach and also de-risk our current business operations. In the last decade, we have demonstrated our capabilities to develop, successfully scale up and market high-end technologies mainly in Agchem space. The new decade will see PI replicate this performance in high growth, niche business areas, beyond Agchem."

On the outlook front, the company maintained its FY20 guideline for approximately 20% improvement in performance Y-o-Y backed by healthy order position, commissioning of additional capacity and contribution from newly launched brands.

Meanwhile, the company's board approved fund raising of upto Rs 2,000 crore through a qualified institutions placement (QIP) to support next leg of growth strategy for business. This is an enabling resolution and the actual investment will depend on the plans as they get firmed up.

PI Industries manufactures agricultural and fine chemicals, and polymers. The company produces fine chemicals, crop protection, plant nutrients, and seeds, and engineering plastics for use in the automobile, electrical, and home appliances industries.

Shares of PI Industries rose 1.7% to hit the day's high at Rs 1584.55. It was currently trading 0.67% lower at Rs 1547.55.

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