The 15 to 20 pc top line guidance should result in 20 to 25 pc bottom line growth on the back of stable to slightly improved margins and a marginally lower tax rate. If the monsoon is good, the domestic business may kick a bit more. Capital efficiency is also good with a 30 to 35 pc Roce; the company is expected generate in excess of 100 cr of cash net of capex, next year. The current market decline presents a good opportunity to add to Pi… A steady compounder with a robust business model, clean balance sheet and run way.
In my view there are more extrinsic reasons for the fall today, there seem to be plenty of good opportunities out there which contributed to the fall. Now the question is for new investors to enter steady compounder or invest in relatively more undervalued/under-appreciated stocks which are much more plenty now.
Discl. Not invested, tracking
Conference call takeaways:
CSM order book has recorded strong growth of 24% qoq to $780mn led by increased order from existing clients and commissioning of two new facility at Jambusar in the past six months.
Execution period for the orders three to four years. The order book is dominated by 5-6 products which comprise of 60-70% of the total order book. While CSM order book remains robust, revenue recognition during the past two quarters has been weak as clients deferred orders on the back of tepid demand and excess inventory in the global markets. The end‐user demand environment seems unencouraging. Thus cut revenue growth guidance for FY16E to 11% from 18‐20%; maintained FY17E growth at 18‐20%.
Management has indicated that generic version of Nominee Gold could hit the market as early as the upcoming kharif season. Nomimee Gold is the marquee brand of PI Industries and the highest revenue contributor to the domestic business. Launch of generic product will not only hurt sales of the company but also adversely impact the margins due to likely reduction in realizations. The company is already in negotiations with the innovator for the pricing of Nominee Gold as some amount of price erosion is expected once the generic is launched.
New products to drive domestic growth PI’s domestic business declined 14% yoy as lower acreages during rabi and mild pest occurrence impacted demand adversely. During the quarter, PI introduced two new products – Biovita X and Vibrant and has received encouraging response from farmers.
discl: not invested
2 Likes
@Vaibhav1512 @hitesh2710 … hitesh bhai , any idea what % of revenue is from csm and agri based produced ? what is the break up like ?
for the current quarter csm was 366cr and agri was 144cr source cancall
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Certainly the report is incorrect one way or the other.
Few thoughts on PI results in spite of tough industry scenario, the company is able to grow its NP 17% YoY on back of improved business mix & the strategy of SEZ playing out. With expectation of better than last year Agri scenario (if not the best) across the world (Gartner report), one can imagine the benefits the company can accrue. Only negative aspect is, the mgmt. was expected to be very transparent and walk the talk, which is missing since last two quarters but a good business can take care of itself without expert intervention of mgmt. - this is what I see in case of PI Ind. I am still learning the art of investing, hence look forward to seniors to correct me wherever required and help in the journey of learning.
Disc : Among top 4 holdings of my portfolio.
Cartica still owns 77,58,037 shares which shoes up in 31-Dec filing on the NSE
guys what value additions are you doing in this thread? you are just cluttering the thread with unnecessary shareholding patterns. how does it impact PI Ind business if Cartica moves out? does it change the fundamentals of the business. We have had similar conversations in Kitex & Kaveri threads and they were blocked by admin for more than a month.
Please add some value to the conversation. Make yourself and other people understand more about business.
Questions that you should ask are:
- is the business model still intact? If yes, then don’t worry about exits by FII or DIIs?
- What headwinds do you see going forward? Will company continue to grow at 20-25% as guided by the management.
- Why CSM revenue has been deferred for 2nd quarter in a row? Why the client is deferring it? Order book of USD790m is still strong. Gives lot of revenue visibility.
If you are comfortable with all these questions, then its individuals call when to buy this beautiful business.
Discl: invested
8 Likes
After a long spell of El Nino, monsoon is expected to revert to normal/ good level this year. El Nino will recede giving way to its counterpart - La Nina post June. I think that’s good news for Agri sector globally and PI Industries of course.
Rajnish Sarna, PI Industries, CFO in an interview with ET Now.
I would slightly disagree here with these thoughts. If a promoter buying or FIIs entering interesting stock story, it is equally important to discuss when they exit. In a way they should be much more informed about the company or changing fundamentals which we cant foresee for now since as somebody also indicated management has not been so transparent in the last 2-3 quarters. If that has happened such exits make us better informed and vigilant. I am still struggling to figure out if anything has changed or not but its not utterly wrong or value destroying to discuss about this.
Discl. Not invested, tracking closely
3 Likes
can any one of the broaders give details of agri and csm break up last year this is
AGRI CSM
Q1 271 285
Q2 250 260
Q3 144 366
looking at the current break up agri has slumped drastically q on q
monsoons are expected to be good this year as per news item of yesterday. Thats good news for agri based cos.
can any of the broaders come on this, mgt announce 790mn dollars order in case of csm,how much is executed and how much of it outstanding
790 (or i think 780) million USD is the unexecuted order book according to q3 concall.
PI to consider second interim dividend. It’s raining dividends.
http://www.bseindia.com/corporates/anndet_new.aspx?newsid=a881822b-0df9-44b0-89ea-1526f39409bf
I am sorry if this seems awkward here , but will you kindly let me know where did you get this pending order book figures?
Thanks
Order figures are given by the management in the conference call.
1 Like