PI Industries - Superior Business Model

My Q3FY14 estimates for PI Ind. are given below :

( fig. in Rs. cr. )

Q3FY14e

Q3FY13

Revenue

Agri-Inputs

CSM

374 â 394

132-138

242-256

282

110

172

EBITDA

71.6 â 76.8

45.3

PAT

43.5 â 48.1

23.96

PI Industries launches new Product Melsa .

PI Industries recently introduced MELSA for Wheat farmers of North India for aiding weed management in Wheat.

MELSA is systemic, post emergence herbicide with superior performance across a broad spectrum of grass weed species. The innovative product belongs to the phenlypyrazolin chemistry and is globallydeveloped for use in cereal crops. MELSA has excellent control of Phalaris minor & Avena spp. and is safe to Wheat crop.

Rallis has come out with pretty robust numbers today: Sales up 17%,PAT up 38%.They say the performance from international markets has been robust.
Looks like we shall have another strong quarter for PII.Mahesh bhai has already put up pretty high expectations. :slight_smile:
Coming to the stock price Mahesh bhai,do you feel the stock can re-rate further if performance stays robust?(90-100% EPS growth) Its been on a tear of late,but such strong growth & quality of earnings may lead to a further leg-up.What do you say?

Sagar, It seems market knows somthing about PI. Stock was down considerably with good volumes inspite of good rallis result.

Looks like that only…we need to see the results and then probably come to know what’s cooking.

Q3FY14 results out…

Revenue at 363.38 cr…a slight disappointment v/s our estimates of 374-394 cr.

Ebitda at 62.68 cr…well below our estimate of 71.6-76.8 cr.

Pat at 34.70 cr…again well below our estimates of 43.5-48.1

Need to wait for press release to check individual segment contribution as also where the company missed…

On current appreciated price, a clear disappointing results…

Rgds.

Discl.- hold

Q3 results out.
Sales up 29% (YoY) from 281 Cr to 362 Cr
NP up 45% (YoY) from 23.9 Cr to 34.7 Cr

Press release out…

Reading between the lines it seems Agri contributed 133 cr. while Csm slightly disappointed and contributed 230 cr…this is understandable as delivery schedules normally decide quarterly Csm revenue trend…debt reduction is a good news…

At cmp., pi is at best a hold…looking forward to concall commentary to be held tomorrow at 11…

Rgds.

The senior management team of ‘PI Industries’ will host a conference call for analysts and investors__to discuss the performance and opportunities going forward.The dial-in numbers are+91 22 3065 0122and+91 22 6629 0301.

Mahesh bhai,as you said,the numbers from PII were a tad disappointing.But the management has kept its guidance of around 1600cr. topline & 11.5% PAT margins for Fy14.Seems 215 & below would still be a good buying opportunity,given the high revenue visibility on CSM & also,exports looking up.Eagerly awaiting the Concall release & your views.

Keytakeaways from Q3FY14 concall :

Debt at 95 cr. for 9MFY14.

Jambusar facility contributed 90 cr. in 9MFY14

Order book at USD 365 mn.

30 % growth p.a. Guided over next two years.

For Q3 Agri contributed 129 cr. while CSM contributed 234 cr.

For 9MFY14, Agri contributed 543 cr. while CSM contributed 689 cr.

Inlicensed products contributed ~65 % to 9MFY14 Agri revenues.

Herbicides contributed 35 %, Insecticides 50 % while Fungicides & others contributed 15 % to 9MFY14 Agri revenues.

Top 5 products in Agri space contributed to ~55 % revenues.

Top 5 customers contributed 55-60 % to CSM revenues.

Hi Sagar,

There is little downside to the stock based on the current results as also future guidance…However, upsides will also be capped unless some major trigger comes…It should remain rangebound for the time being. You are right, below 215 it might be great to add this co. but I doubt whether such valuation will come irrespective of any specific negative trigger…the best strategy will be to absorb profits and staying put in remaining quantities…When the second phase of jambusar commences production that will be key thing to monitor.

Rgds.

Mahesh,

Request you to also update the Dhanuka thread with your take on latest results and concall updates.

thanks in advance!

Hi HG,

Hitesh has already shared his view post results and I more or less agree with him…Dhanuka is a Hold for now and a good buy at 160-165…Wait for the monsoon forecast due within two months…pure domestic agchem players are a good buy in bad phases of monsoons and good sell or hold in best phases of monsoon…

Rgds.

My Q4FY14 & FY14 estimates for PI Ind. :

( fig. in Rs. cr. )

Q4FY14e

Q4FY13

Revenue

Agri-Inputs

CSM

398 â 412

126-132

272-280

330

105

225

EBITDA

70.8 â 73.4

41.37

PAT

48.2 â 51.5

23.09

( fig. In Rs. cr. )

FY14e

FY13

Revenue

Agri-Inputs

CSM

1630 â 1644

669-675

961-969

1148

553

595

EBITDA

304.4 â 307.1

180.90

PAT

186.7 â 190.0

100.54

“PI is targeting 40 percent revenue growth in the financial year ending March 2014. This is driven by rapid growth in CSM exports and a relatively good domestic crop season” says a write up on Business excellence. http://www.bus-ex.com/article/pi-industries-0

Hi,

Results are out, seems below expectation on first look, Mahesh and seniors any views?

i think they r way below on sales growth but good thing is net profit is almost double.

that thing can hold stock.

management was confident to get 30% growth. lets see how seniors guys and market take this result.

PI Industries Q4 & FY2014 Earnings Conference Call

Thursday, May 22, 2014 at 04:00 pm IST

The management team of PI Industries â one of Indiaâs leading Agri-input and Custom Synthesis companies, will participate in a conference call for analysts and investors on Thursday, May 22, 2014 at 04:00 pm IST.

The call will commence with a brief management discussion on the Q4 & FY2014 results, followed by an interactive Question & Answer session.

Mr. Mayank Singhal, Managing Director & Group CEO and Mr. Rajnish Sarna, Executive Director, PI Industries Limited, will represent the management team on the conference call.

Details of the conference call are as follows:

Timing

04:00 pm IST on Thursday, May 22, 2014

Conference dial-in Primary number

+91 22 6746 8354/ +91 22 3938 1071

India Local access Number

6000 1221 (Accessible from all major carriers except BSNL/MTNL)

3940 3977 (Accessible from all carriers)

Hong Kong Local Access Number

800 964 448

Singapore Local Access Number

800 101 2045

UK Local Access Number

0 808 101 1573

USA Local Access Number

1 866 746 2133

Hi Anil & Gaurav,

Yes…Results are below our expectations…evenother research houseslike edelweiss (394.9 cr. – 70.7 cr. – 41.1 cr.) and IDFC (421.1 cr. – 70.30 cr. – 40.80 cr.) were expecting much higher growth and profitability…only Dolat (367.4 cr. – 49.3 cr. – 31.4 cr.) was expecting muted performance…

Since press release is still not out we are not able to get hold of the breakup so lets wait for that…

Primafacie, the results are below expectations and unless its one-off (on topline front I am talking about) or management gives strong guidance for FY14, the stock should consolidate in the range of 206-245 before the start and stabilisation of second phase at Jambusar…however, lets wait for concall commentry and press release before putting final judgement…

Today’s concall commentry will be key monitorable.

Rgds.

Discl. - Hold