PI Industries Q4FY17 Concall Summary

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Financial Highlights

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  • Revenue stood at Rs. 627 Crores, higher by 4% over the last quarter figures with EBITDA at Rs. 154 Crores, up by 42% having EBITDA margins at 24.5%
  • PAT has also increased by 41% to Rs. 135 Crores due to better tax figures for the company for the 4th quarter.
  • Overall on the FY basis, Revenues increased by healthy 8.4% to Rs. 2383 Crores with EBITDA at Rs. 551 Crores (up by 28% on a Y-o-Y basis)
  • Tax rate has also been reduced due to investment tax rebates and other factors offering a PAT of Rs. 457 Crores, up by 48% Y-o-Y basis
  • Based on a sound financial performance, the company has announced a quarterly dividend of Rs 2.50 making dividend of Rs 4.00 per share for the whole year
  • Debt to Equity position stood at 0.50x
  • Better utilization of credit line and cash has kept the trade payables for FY17 down to Rs. 288 Crores from Rs. 366 Crores.
  • Other Expenses has been down by 12% compared to Q4FY16 figures.
  • Tax rate can be expected to be in the range of 20% in the future years as currently there is a lot of saving in the company due to existing benefits on SEZ’s and on R&D spending and Investment allowances for PPE
  • In the other income section new gains has been transferred due to Ind-As standards of financial reporting
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Global Industry Outlook

  • Global industry is perceived to have a turnaround in the upcoming financial year due to increased inventory for major global players
  • These are few triggers, the inventory in the channel, inventory with the companies and also commodity prices
  • The commodity prices for the last three-four years have been declining, but there is wellhope for revival trend in terms of commodity prices also
  • Exports are currently growing at a rate of 11% for the company which is expected to keep at 10% level in spite of an expected slump in the following 2 Quarters.

Strategic Partnership With BASF

  • Under a new agreement with BASF, PI industries is going to co-market latest innovative fungicides and herbicides with 4 new molecules
  • Two out of these 4 molecules are going to be newly launched in crop segments in India – one is in the rice category and other one in maize category
  • Multi-Pronged approaches have been taken by the company to increase distribution network for better market penetration for these products.

CAPEX Plan 

  • Company has expected for a cap ex of Rs. 200 Crores for the FY18 and is going to setup new investment opportunities
  • 50% of this capex will be targeted towards revenue generation and 25-30% towards technological upgradation
  • The plant in Jumbasar is also expected to run on a higher capacity than currently (60%) and new capex can be scheduled in this arrangement
  • This financial year has marked full operations of 2 plants in Jumbasar for four molecules where there is enough land to set up 6 more plants
  • There is going to be some investment in one of the MPPs that is currently in progress.
  • The company is also looking at some refurbishing of the earlier assets, some expenditure is also going to happen towards ETP & Utilities
  • Plan for the Pharmacy business in final stage and will be communicated by the next financial year

Oreder Book

  • The order book of the company  is in the range of 1 Billion dollars which is up by 25% from the last year
  • Contribution of existing product line coming from Jambusar plant and future product line is present in the new order book

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