PI Industries Q1FY22 Conference Call Highlights

Financial Highlights: PI Industries Share Price

• Revenue from operations stood at 1194 crores rising 12% YOY from 1060 crores declining slenderly by 0.25% QOQ

• Operating Expenses also stood at 945 crores rising 13.7% YOY from 831 crores but declining 2.5% QOQ

• EBITDA stood at 277 crores rising 16.8% YOY from 237 crores & almost 2% QOQ

• EBITDA Margin stood at 23% rising 1% YOY from 22 but standing almost flat QOQ declining 1% due to rising overheads.

• PAT stood at 187 crores rising 28% YOY from 146 crores but declining 3% QOQ

• PAT margin stood at 16% rising 4% YOY from 12% & almost standing flat QOQ

• Net sales to Fixed Asset ratio improved to 1.95 (Jun’21) Vs 1.89 (Mar’21)

• Positive operating Cash flow of Rs. 250 crores

• Surplus cash net of debt of Rs. 2193 crores

Business Highlights: PI Industries Results

• YoY revenue growth primarily driven by:31% growth in Exports contributed by strong volume growth in key products. Exports stood at 807 crores vis a vis 614 crores YOY.

• Domestic business impacted due to higher base and delayed monsoon. Domestic Business stood at 387 crores from 446 crores YOY.

• Overheads increase of 26% is mainly attributable to one-time expenses pertaining to Covid Management and consulting fee and other costs pertaining to several strategic projects

• The company Increased inventory levels to avert supply chain disruptions

• Capacity enhancement up to 5% has been planned

• 3 new products commercialized for exports & >30 active inquiries at different stages

• The company Initiated relationships with new customers in agrochemicals, electronic chemicals & other specialty chemical domains & Order book position stood at > $1.5 billion.

• The company is doing Aggressive placement of rice herbicide (Nominee Gold) maintaining the premium over generics & Expansion of herbicide business in Corn & Molluscicides expansion in horticulture segment

• 1 new product launched (fungicide for Sheath Blight control to improve yield)

• The business outlook remains positive backed by normal monsoon for 3rd year in a row

• 3 new products are expected to be launched in Q2 which would strengthen the position in the rice, cotton, and horticulture portfolio as per the management

• Products transition to new packaging in ~Q2, to improve efficiency & branding

• 6 new molecules are planned to be commercialized in FY22. Commissioning of 3 new molecules is in progress

• Order book continues to remain robust @ $1.5bn with high visibility of sustainable growth for the next 3 years

• 90% Custom Synthesis Manufacturing revenues from patented molecules; 60%+ domestic revenues from in‐licensed molecules

• ISAGRO ASIA merger activities. i.e Domestic Marketing Piece to be merged with JIVAGRO (100% Subsidiary of PI) & Manufacturing Piece to be merged with PI are expected to be completed in Q3 FY 2022. NCLT demerger order has been received, the integration of Isagro & Jivagro has been successfully accomplished

• PAN India sales permission on Jivagro brand name has been obtained and back end IT & regulatory integration has been completed Jivagro products available in new packs in Q2 FY22

• Jivagro will introduce 12 co-branded and 2 new products in Q2 FY22

PI Industries board approves acquisition of API & Intermediate business of Ind-Swift Laboratories Limited.

• PI Industries Limited (PI), yesterday executed a Business Transfer Agreement (BTA) with Ind-Swift Laboratories Limited (ISLL) for the acquisition of their API and Intermediates business undertaking on a slump sale going concern basis.

• The acquired business with a revenue scale of ~Rs. 860 crore and EBIDTA margin of 23%, access to strong customer franchise in the regulated/ROW markets/product portfolio, accredited manufacturing facilities, and experienced management team will help PI to build a differentiated scale play in pharma in an expeditious manner as per the management.

• The acquired business undertaking has a diversified portfolio of 20+ products with leadership positions (global top 5) in several of them and good R&D product pipelines.

• The acquired undertaking has cGMP compliant manufacturing facilities with approvals for US (USFDA), European, Japanese, Europe (EDQM), Japan (PMDA), Brazil (ANVISA), Korea (KFDA), and other markets.

• The overall purchase consideration for the target undertaking is to be INR 1530 crores on a debt and cash-free basis subject to closing adjustments.

• The target undertaking is planned to be acquired through PI’s Fully owned subsidiary.

• The purchase consideration will be paid in all cash and funded from the proceeds of the completed Qualified Institutional Placement (QIP) and internal accruals. The transaction is expected to be earnings accretive with immediate effect.

Management Update: PI Industries Valuation

• Due to personal reasons, Mr. Rajiv Batra, Group Chief Financial Officer (KMP) of the Company has relinquished his office w.e.f. closing hours of July 31, 2021, & based on the recommendation(s) of the Nomination & Remuneration Committee & Audit Committee, the Board of Directors in its meeting held on July 30, 2021, has approved the appointment of Mr. Manikantan Viswanathan as Chief Financial Officer (“Key Managerial Personnel”) of the Company w.e.f. August 01, 2021.

ABOUT INVEST YADNYA

Invest yadnya provides the best website to learn how to build an investment portfolio for beginners in India. It is the  best technical analysis book. It is one of the best websites for the fundamental analysis of Indian stocks. They are also the best website for the portfolio in India. Invest Yadnya gives the best books on mutual fund investing so that anyone can invest in their website. They provide financial analysis best books and free books on mutual funds to their investors. They have a special free stock screener in India which gives a very exact and illustrated analysis of companies. Not only it is a ready-made portfolio website but investors can also get information about financial advice services. 

There are also various articles on different sectors like Model portfolios, Hindustan Unilever, Tata Consultancy Services , Tata Power Company, Kotak Mahindra Bank, Bandhan Bank, HDFC Bank etc.