PI Industries posted a healthy set of earnings in Q2 with margins and profit meeting street expectations.
In an interview to CNBC-TV18, Mayank Singhal, MD & CEO of PI Industries said that margins were driven by good product mix.
PI Industries will see average growth of 15 percent going ahead, he added.
Q: A 20 percent topline growth and 80 percent bottomline growth and super margins coming in. Can you replicate this performance in the second half of the year?
A: The first half of the year has been good for us and that has been backed due to very good product mix that we have had in the first part of the year but as we will see going into the year, as stated that we would see that this is not something what we would replicate in the year but we will average out to the estimates that we have given of about 15 percent growth going ahead.
Q: Let me break it down to segments, will the second half be better for agrochemicals?
A: The domestic market has good set of rains and there is good water in the reservoir specifically in the south part of the country except certain states but it is expected to be a better half and a better quarter going into the future.
Q: Can you give us some numbers, overall revenues from agrochemicals?
A: The overall revenue for the agrochemicals that we are looking at is about 15 percent of growth.
Q: What about on the margin front. What caused such a big jump in margins this time to almost 23 percent and what is the outlook for the second half?
A: This has been driven by good product mix that we have had and also focus on the operational efficiencies. So we have had a good healthy product mix in the first half.
Q: Coming to your debt, you have reduced it considerably; Rs 122 crore has become Rs 104 crore. Will there be more reduction?
A: The debt would come down as we repay, so we will practically a debt free company in balance sheet.
Q: Are you seeing any kind of slowdown in the export market because your export revenues have been growing at a steady pace but most people we speak to from your industry indicate that export markets are not doing as well?
A: Yes that is primarily true as we have had some preponement of certain orders in the first part of the year and so we have been able to have good number in the first part of the year.
However, if you look at the global agrochemical industry, the crop prices are not at its best and productivity and other challenges to do with the weather conditions. So it is expected that in the next one-one-and-a-half years will be little challenged and the agri industry is cyclical. Hence, I expect that it will continue to go back into good footing going ahead in 2018.
Q: Two numbers, for the full year and for FY18. Can we work with about 20-22 percent margins and 20 percent topline?
A: I would not say that because as said earlier that we would look at around 15 percent of growth and margins in line to that.