Hi Mahesh,
What is your take on Sabero Organics ?
Thanks,
Vinod
**PI Industries receives the âBest Supplierâ award at Agrow Awards 2013 _
Nominated for âBest Marketing Campaignâ for Nominee Gold
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Gurgaon, November 09, 2013: PI Industries Limited (PI), a leading Indian Agri-Input and Custom Synthesis company was bestowed with the **âBest Supplierâ **award for its Fine Chemicals exports at the Agrow Awards 2013 held at Amsterdam, the Netherlands recently.
PI was also nominated under the category of **âBest Marketing Campaignâ **where it shared nominations with BASF Corporation, Arysta LifeScience and Dow AgroSciences amongst others.
The Agrow Awards are recognized as a significant achievement amongst the global crop protection industry and have been instituted since 2008. The recognition provided by Agrow Awards reaffirms PI as a significant player in the global agrochemicals industry. PI enjoys a unique and differentiated positioning in the crop protection space based on its respect for IPR and relationships with global innovators.
ï* _In the domestic market the Company enjoys a premium positioning based on its brand building capabilities, robust distribution network, unique delivery mechanism and sharp marketing & communication initiatives.
ï* _In the custom synthesis exports, PI focuses on early-stage partnerships with innovators where it acts as âthe preferredâ supplier. Here, PI has the ability to handle complex chemistries, to synthesize & scale-up the process within short span of time, to ramp up capacities at short notice and to supply high quality product on consistent basis. _
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**
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Nominated for âBest Marketing Campaignâ for Nominee Gold
_
Gurgaon, November 09, 2013: PI Industries Limited (PI), a leading Indian Agri-Input and Custom Synthesis company was bestowed with the **âBest Supplierâ **award for its Fine Chemicals exports at the Agrow Awards 2013 held at Amsterdam, the Netherlands recently.
PI was also nominated under the category of **âBest Marketing Campaignâ **where it shared nominations with BASF Corporation, Arysta LifeScience and Dow AgroSciences amongst others.
The Agrow Awards are recognized as a significant achievement amongst the global crop protection industry and have been instituted since 2008. The recognition provided by Agrow Awards reaffirms PI as a significant player in the global agrochemicals industry. PI enjoys a unique and differentiated positioning in the crop protection space based on its respect for IPR and relationships with global innovators.
ï* _In the domestic market the Company enjoys a premium positioning based on its brand building capabilities, robust distribution network, unique delivery mechanism and sharp marketing & communication initiatives.
ï* _In the custom synthesis exports, PI focuses on early-stage partnerships with innovators where it acts as âthe preferredâ supplier. Here, PI has the ability to handle complex chemistries, to synthesize & scale-up the process within short span of time, to ramp up capacities at short notice and to supply high quality product on consistent basis. _
_
PI Industries Limited (PI), a leading Indian Agri-Input and Custom Synthesis company was bestowed with the **âBest Supplierâ **award for its Fine Chemicals exports at the Agrow Awards 2013 held at Amsterdam, the Netherlands recently.
PI was also nominated under the category of **âBest Marketing Campaignâ **where it shared nominations with BASF Corporation, Arysta LifeScience and Dow AgroSciences amongst others.
The Agrow Awards are recognized as a significant achievement amongst the global crop protection industry and have been instituted since 2008. The recognition provided by Agrow Awards reaffirms PI as a significant player in the global agrochemicals industry. PI enjoys a unique and differentiated positioning in the crop protection space based on its respect for IPR and relationships with global innovators.
ï* _In the domestic market the Company enjoys a premium positioning based on its brand building capabilities, robust distribution network, unique delivery mechanism and sharp marketing & communication initiatives.
ï* _In the custom synthesis exports, PI focuses on early-stage partnerships with innovators where it acts as âthe preferredâ supplier. Here, PI has the ability to handle complex chemistries, to synthesize & scale-up the process within short span of time, to ramp up capacities at short notice and to supply high quality product on consistent basis. _
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**âBest Marketing Campaignâ **where it shared nominations with BASF Corporation, Arysta LifeScience and Dow AgroSciences amongst others.
The Agrow Awards are recognized as a significant achievement amongst the global crop protection industry and have been instituted since 2008. The recognition provided by Agrow Awards reaffirms PI as a significant player in the global agrochemicals industry. PI enjoys a unique and differentiated positioning in the crop protection space based on its respect for IPR and relationships with global innovators.
ï* _In the domestic market the Company enjoys a premium positioning based on its brand building capabilities, robust distribution network, unique delivery mechanism and sharp marketing & communication initiatives.
ï* _In the custom synthesis exports, PI focuses on early-stage partnerships with innovators where it acts as âthe preferredâ supplier. Here, PI has the ability to handle complex chemistries, to synthesize & scale-up the process within short span of time, to ramp up capacities at short notice and to supply high quality product on consistent basis. _
_
_In the domestic market the Company enjoys a premium positioning based on its brand building capabilities, robust distribution network, unique delivery mechanism and sharp marketing & communication initiatives.
ï* _In the custom synthesis exports, PI focuses on early-stage partnerships with innovators where it acts as âthe preferredâ supplier. Here, PI has the ability to handle complex chemistries, to synthesize & scale-up the process within short span of time, to ramp up capacities at short notice and to supply high quality product on consistent basis. _
_
ï* _In the custom synthesis exports, PI focuses on early-stage partnerships with innovators where it acts as âthe preferredâ supplier. Here, PI has the ability to handle complex chemistries, to synthesize & scale-up the process within short span of time, to ramp up capacities at short notice and to supply high quality product on consistent basis. _
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Commenting on the development Mr. Mayank Singhal, Managing Director & CEO, PI Industries Ltd., said;
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“We are very pleased to receive the âBest Supplierâ award in the fine chemicals exports category at the Agrow Awards. This is the recognition of hard efforts put in by our team in achieving high levels of customer satisfaction. With respect for IPR deeply ingrained in its DNA, I feel PI has always stood tall in a highly competitive marketplace for agrochemicals. Thanks to a clear vision early-on and consistent delivery of superior performance in both focus markets of domestic agri-inputs and custom synthesis exports, we have set high expectations for ourselves. With the visibility afforded by the key drivers of businesses I am confident that PI is poised to scale greater heights.”
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Hi Vinod,
Not tracking Sabero closely.
Rgds.
Saw Mr. Singhal’s interview on CNBC,a few moments back.He is very bullish & has guided for ‘atleast’ a 40% growth YoY,over FY13.The order book on CSM front stands at 350 million USD,where they are focused on sustainability.
Nothing that hasn’t already been said by the ever informed Maheshji.Just a reminder of times to come,for PII 
Kotak has covered PI Ind. under its recent most promising export-oriented opportunities companies and exhibited it to eminent fund managers…
Deutsche Bank also seems to have covered PI Ind. and rated it amongst good play on Indian agriculture space…
Stock going into MSCI index from 26th November 2013…
One more good qrtr. and further rerating ingredients seem to be inplace…
Rgds.
Discl. - Hold
[ Comment too short ]
Here is the mgt interview link-
Based on the interview, here are the estimates-
| FY12 | FY13 | 1H13 | 2H13 | 1H12 | 2H12 | g- 2H13 | ||||
| Sales | 1246 | 1744 | 869 | 875 | 538 | 708 | 24% | |||
| EBDITA | 189 | 297 | 171 | 126 | 93 | 96 | 31% | |||
| 15% | 17% | 20% | 14% | 17% | 14% | |||||
| d | 22 | 30 | ||||||||
| i | 22 | 15 | ||||||||
| PBT | 146 | 252 | 157 | 94 | 71 | 75 | 26% | |||
| t | 49 | 84 | 53 | 31 | 22 | 27 | ||||
| 33% | 33% | 34% | 32% | 30% | 36% | |||||
| PAT | 97 | 168 | 104 | 64 | 49 | 48 | 34% |
So, PAT of 168crs for FY14, 2H14 Pat of 64crs... 34% growth YoY.
Available at 18 forward PE.
Request Mahesh & others to share their views on these estimates. Can they beat their own estimates?
Jatin…If company can maintain EBITDA margins then 168 cr. PAT is easily doable…
If you ask me, I expect CSM segment to turn out minimum 500 cr. in 2H and agri to register minimum 260 cr…on that co. will score 1630 cr. revenues for FY14 which is ~41 % YoY increase over FY13 (figures given by you in your postseem incorrect) which are inline withMr. Singhal’sestimates and…I expect co. to maintain 10.5 % PAT margin in 2H down from 11.95 % registered in 1H…hence, I expect co. to turn out a PAT of minimum 183 cr. for FY14…
Rgds.
Mr. Singhal on CNBC Awaaz.Interested people can tune in.
Yes, Mahesh. My sales number are wrong... Taken them from Screener, they have captured it wrongly.
Here are the correct estimates then-
| FY12 | FY13 | 1H13 | 2H13 | 1H12 | 2H12 | g- 2H13 | ||||
| Sales | 1151 | 1611 | 869 | 742 | 538 | 613 | 21% | |||
| EBDITA | 189 | 290 | 171 | 119 | 93 | 96 | 24% | |||
| 16.4% | 18% | 20% | 16% | 17% | 16% | |||||
| d | 22 | 30 | ||||||||
| i | 22 | 15 | ||||||||
| PBT | 146 | 245 | 157 | 88 | 71 | 75 | 18% | |||
| t | 48 | 81 | 53 | 28 | 22 | 27 | ||||
| 33% | 33% | 34% | 31% | 30% | 35% | |||||
| PAT | 98 | 164 | 104 | 60 | 49 | 48 | 25% | |||
| PAT margin | 8.5% | 10.2% | 11.9% | 8.1% | 9.2% | 7.9% |
So, 164 crs PAT now. While you are expecting 183 crs.
That mgt interview points to 1.5% ebidta increase, so I have assumed that.
Either mgt is trying to sound conservative or your are a bit more optimistic :). Lets see.
Meanwhile stock up another 10%. 245/- now
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CRISIL has upgraded its ratings on the bank facilities of PI Industries Ltd (PI; part of the PI group) to âCRISIL AA-/Stable/CRISIL A1+âfrom âCRISIL A+/Stable/CRISIL A1â. |
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The ratings upgrade reflect CRISILâs belief that the PI groupâs credit risk profile will continue to benefit from the groupâs increasing presence in the custom synthesis and contract manufacturing (CSM) business, and established presence in the domestic agricultural (agri)-inputs business. CRISIL expects the PI groupâs revenues from CSM (which contributes about 50 per cent of its overall revenues) to register a healthy growth of over 25 per cent per annum over the medium term; this business registered a compounded annual growth rate of 46 per cent between 2008-09 (refers to the financial year, April 1 to March 31) and 2012-13. Further, the PI groupâs prospects in the domestic markets will continue to be supported by its wide geographic reach and increasing proportion of in-licensed and co-marketed products in its product portfolio. The PI groupâs agri-inputs business is also expected to benefit from steady demand prospects in the domestic market. |
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PIâs standalone revenues have registered a year-on-year growth of about 62 per cent to Rs.8.69 billion in the six months ended September 30, 2013, supported by healthy off-take for agri-inputs and strong growth in CSM exports. Its standalone operating profitability too has improved to about 20 per cent in this period from about 17 per cent in the corresponding period of 2012-13. CRISIL believes that PIâs operating profitability will stabilise at about 18 per cent over the medium term. |
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The rating upgrade also factors in the significant improvement in the PI groupâs financial risk profile, marked by comfortable gearing (0.48 times at March 31, 2013) and debt protection metrics. The improvement was driven by the companyâs healthy cash flows from operations and equity infusion of Rs 1.17 billion in 2012-13. CRISIL believes that the PI group will sustain its financial risk profile at a comfortable level over the medium term, supported by prudent capital spending, and steady cash flows from operations. |
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The ratings continue to reflect the PI groupâs established position in the domestic agro chemicals business, and itâs increasing presence as one of Indiaâs major players in CSM, marked by strong tie-ups with global innovators. The ratings also reflect the groupâs healthy financial risk profile, marked by its comfortable gearing and debt protection metrics. These rating strengths are partially offset by the PI groupâs working-capital-intensive operations and its exposure to risks related to cyclicality in the agrochemicals industry. |
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For arriving at its ratings, CRISIL has combined the business and financial risk profiles of PI and its wholly owned subsidiaries, PIIL Finance & Investments Ltd (PFIL), PI Life Science Research Ltd (PLSRL), and PI Japan Co Ltd (PJCL), together referred to as the PI group. PLSRL handles the contract research and development (R&D) activities, and PJCL carries out the groupâs marketing activities in Japan. |
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Outlook: Stable |
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CRISIL believes that the PI groupâs business risk profile will remain healthy over the medium term driven by its healthy revenue visibility in the domestic agri-inputs and CSM businesses, as well as steady profitability, leading to stable cash flow generation. CRISIL also expects the PI group will sustain its comfortable financial risk profile, in the absence of significant capital spending. The outlook may be revised to âPositiveâ in case of higher-than-expected sustainable improvement in the PI groupâs revenues and profitability, resulting in better-than-expected cash flows and credit metrics. Conversely, the outlook may be revised to âNegativeâ if the PI groupâs revenue growth and profitability weakens considerably impacting cash flows, in the event of stretch in its working capital levels, or if the group undertakes significant debt funded capital spending or acquisitions, impacting its key credit metrics. |
Custom synthesis boost for PI Industries
While most farm inputs stocks are struggling to hold on to their gains, PI Industries stocks doubled in the past one year
PUBLISHED:SUN, DEC 15 2013. 05 03 PM IST
PI Industries Ltdis one of the few outliers in the farm inputs stocks. While most stocks are struggling to hold on to their gains, PI Industries stocks doubled in the past one year. What is driving the stock? In short: strong financial performance and business prospects.
Revenues in the first half of the current fiscal year surged 62%. The growth is led by custom synthesis. Production ramp-up of existing molecules doubled revenues at the segment. The domestic agriculture inputs business registered healthy double-digit growth rates. But with exports increasing at a faster pace, the company also benefited from a weak rupee. Hence, operating profits jumped 84% and profits after tax zoomed 111% toRs.103 crore.
Whatas more, the management expects the custom synthesis business to continue to deliver strong performance. Custom synthesis is similar to contract research and manufacturing services undertaken by the pharmaceutical companies. PI Industries focuses on patented molecules and looks for tie-ups in the early stages of product life cycles. From $307 million in June, orders for this increased to $334 million by the end of September.
Encouraged by order inflows, the management increased its revenue guidance for the current fiscal year. Against the earlier growth of 30%, the management expects the revenues in the current financial year to increase by about 40%, broking firmPrabhudas Lilladher Pvt. Ltdsaid in a note. More than the revenue upgrade, what analysts are enthused about is the opportunity the custom synthesis offers.
According toEdelweiss Securities Ltd, PI Industries has 13-14 products that are in the early stage of their life cycles. One product has been commercialized in the first half of the current fiscal year and the company is estimated to commercialize two more in the rest of the year. As the company launches new products and production at the new facility (Jambusar special economic zone in Gujarat) gathers steam, the business is expected to enter strong growth phase over the next couple of quarters.HDFC Securities Ltdexpects the segmentas revenues to double in two years.
aHere again the rate of commercialized molecules are increasing and we are witnessing strong and consistent growth. The Jambusar SEZ facility is an additional trigger that will keep supporting growth. We are enthused by the uptake in the first phase and we have initiated the next phase that will be implemented over the coming few quarters,aMayank Singhal, managing director and chief executive officer of PI Industries, said in a statement.
The optimism has driven up the stock and valuations. The stock is now valued at 14 times one-year earnings estimates. WhileRallis India Ltdis trading at an estimated price to earnings multiple of 18 times (2014-15), for PI Industries to close the valuation gap, the company needs to continue to deliver strong growth in earnings.
Thanks to you sirji,I got in after Q1 results and the going has been really good.
The emergence of big positives: the reducing dependence on Agro-chem business(& thus monsoons),decrease in Debt,rise in exports & high,continuing growth in CSM,should help the multiple to sustain at or around the 20X mark.As the sustainability improves,we can see better multiples still.Looks a pretty safe bet now,even at 19-20X TTM.And though the biz. seems better than that of Rallis,the discount is still decent.So,as you said,if valuations reach 18X forward,that would be 300 flat for PII!
Ashish this side…I wanted to purchase 250 to 300 shares of PI Industries…I a0m convinced on the Fundamental side…My problem or you can say confusion is I don’t know whether I should get in the bus tomorrow at 236 levels or should I wait for it to come to 215 levels…The basic confusion is chances can be that it never comes to 215 levels…I am ready to hold the scrip for next 2 to 3 years…Please guide and advise…I had a gut feeling that around Christmas the stock would be available at 200 to 215 levels…but I feel once anything with respect to Tapering starts and market corrects then it would be difficult to get quality n fundamental strong stock like PI at those levels…please advise…I am trying to study technical analysis whenever I get free time…so as per current knowledge of Technical analysis unable to decide my Entry into PI currently…I strongly feel the stock would touch 370 to 400 by the time March 2014 results come out…
Hi Sagar…its not my saying of 18 multiples (300 rate) but its just a mint newspaper article I have reproduced for members’ ref.
Rgds.
Hi Ashish,
Its never a good idea to buy anything into desperation…you seem desperate to enter PI Ind and thats not the way investing should be made as if ‘if I will not enter today i will not get it tomorrow’…PI is a great story and in the long run there is high probability that it will create wealth from here on too, but, for that you need to build your own conviction…just spend some days and go through the entire thread here and go through management Q&As and articles and links published…if any questions arise don’t hesitate to ask…but invest only after understanding the business properly and if you and only you feel that story is good to invest in…don’t act on anybody’s advice or postings including mine.
Rgds.
Dalal street magazine has come out with recommendation of PI Industries.
My notes on PI industries and Indian Agri-CSM business
http://www.docstoc.com/docs/165808848/PI-Industries---Summary
Guys,
If you have anything to add to the ongoing discussion, its a good idea to list out/discuss here. If it’s a voluminous doc posting a brief (executive) summary and/or qualifying comments (what you liked really about teh doc, what can one expect out of it, etc.) along with link is the proper thing to do.
Subash - It’s not a good idea - just to point to an external resource (even if your own) without qualifying it first.
This is certainly not mandatory, but a useful thing to keep in mind. Those looking to add value to the community, certainly wouldn’t mind taking the trouble.
If you have conviction about 400 levels, it does not matter whether you get the stock at 215, 236 or 250. I’d argue it is a mistake to wait for the stock to correct. On the other hand, if you don’t have 100% conviction of a 2 x returns there is no reason to buy it first place.
Alternatively, you could buy 50%, and wait for sometime. If it goes down, you average it. And if it goes up - well, you’d already have some gains and you don’t have to see too much red if it falls ~10% from your second purchase.
Personally, if i have conviction of 2x returns, I’d buy 100% at the market price and won’t worry too much about +/-15%.
Disc: Invested in PI.