PI Industries - Superior Business Model

PI continues delivering extraordinary results, given the pain across the agchem sector. Sales grew by 17.6%. and EPS by 27.5%. New products are driving near term growth and they continue investing in longer term growth drivers (electronic chemicals, pharma, process efficiency). Concall notes below.


  • PI now in top 3 agchem CSM companies globally, their results are superior to peers due to focus on early stage patented

  • 60%+ growth in Q3 was from new products (commercialized in last 3 years) - agchem CSM grew by 13%

  • One time higher 3% higher EBITDA margins due to recovery of theft material (41 cr. inventory, sale price was 70 cr.; 41% gross margins)

  • Sustainable EBITDA margin is 25-26%

  • Non-agchem should contribute 20-25% revenues in 4-5 years

  • 9MFY24 Capex : 900 cr. including pharma acquired assets of 497 cr. Will continue incurring 600-800 cr. organic capex (expected asset turns: 2-2.25x)

  • Pyroxasulfone : formulation has seen 10-15% price erosion (not technical). Formulation market size is $600-700mn

  • R&D

    • Pipeline : 50 new molecules

    • Nonagchem share in new enquiries have grown to 30%

    • 800+ scientists, filed 155 patents

  • Domestic

    • Launches : 5 in 9MFY24 (CLARET for paddy, patented herbicide EKETSU for rice, fungicide KADETT for soyabean and groundnut, Bio-fungicide PIILIN for grapes and Chili)

    • Focused on product mix rather than volumes

    • Biological and bionutrients : Portfolio of 8 products, 2 are entrenched over 2 decades. Launched a new brand AMINOGROW

Disclosure: Invested (position size here, bought shares in last-30 days)