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.
FY24Q3
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PI now in top 3 agchem CSM companies globally, their results are superior to peers due to focus on early stage patented
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60%+ growth in Q3 was from new products (commercialized in last 3 years) - agchem CSM grew by 13%
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One time higher 3% higher EBITDA margins due to recovery of theft material (41 cr. inventory, sale price was 70 cr.; 41% gross margins)
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Sustainable EBITDA margin is 25-26%
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Non-agchem should contribute 20-25% revenues in 4-5 years
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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)
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Pyroxasulfone : formulation has seen 10-15% price erosion (not technical). Formulation market size is $600-700mn
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R&D
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Pipeline : 50 new molecules
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Nonagchem share in new enquiries have grown to 30%
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800+ scientists, filed 155 patents
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Domestic
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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)
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Focused on product mix rather than volumes
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Biological and bionutrients : Portfolio of 8 products, 2 are entrenched over 2 decades. Launched a new brand AMINOGROW
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Disclosure: Invested (position size here, bought shares in last-30 days)