PI Industries revenues up 8% in FY2016

Indian agrochemical company PI Industries reported 8.9% rise in sales at Rs 585 crore for the fourth quarter ended March 31, 2016. This was backed by 17% growth in agri-inputs and 6% enhancement in exports. The domestic performance was driven by momentum within the portfolio of in-licensed products in light of the expected good monsoon. The planned scale-up in deliveries against existing molecules combined with commissioning of two new plants at Jambusar facility led to healthy improvement in custom synthesis exports.

Revenues showed 8.1% improvement YoY during FY16 on the back of 6% gains in domestic agri-inputs and 10% improvement in custom synthesis exports. This aligns to the challenging agro-climatic conditions witnessed in the domestic market during the year and softness in global markets.

Full-year EBITDA reported an increase of 16.9% at Rs. 433 crore. This resulted in 156 bps better margins at 20.6%. EBITDA was at Rs. 107 crore in the fourth quarter of FY2016, translating into margins of 18.3%.

Profit Before Tax(PBT) in FY16 were at Rs. 404 crore, up 14.5%. Profit Before Tax showed growth of 12.9% to Rs. 97 crore in the fourth quarter of FY2016.

Profit After Tax(PAT) in FY16 stood at Rs. 313 crore, delivering gains of 28.8% year-on-year. The Company benefitted from better tax planning, on the back of SEZ operations, expansion at Jambusar and extension of the R&D operations. The corresponding Basic EPS was at Rs. 22.90 per share as compared to Rs. 17.84 per share. PAT rose 58% Y-o-Y at Rs. 95 crore. The Basic EPS during Q4 FY16 was at Rs. 6.97 per share in the fourth quarter of FY2016.

Commenting on the performance Mr. Mayank Singhal, Managing Director & CEO, PI Industries Limited, said: “I am proud to present a healthy set of numbers backed by a world-class operation, leading brand position in key categories and a growing exports franchise.

We have an exciting portfolio under domestic agri-inputs, where we focus on getting high-potential patented products into India. Our model emphasizes on creating an entire ecosystem for the farmer, where he can draw in from our agri-expertise, market-related tips and hand-holding in terms of how best to utilize our range of high-performance products in order to drive up his returns. This remains backed by our extensive distribution set-up nationwide.

Brands like Nominee Gold, Vibrant, Osheen, Fluton, Cuprina, Keefun have given us good standing in the sector. In the times to come, I am sure these will continue to drive consumption further and bring benefits of higher yields and productivity to many more farmers.

Our approach to business is disciplined and thus every year you will see incremental additions of brands to our portfolio. We wish to lend each of our products the full support of our marketing machinery and farmer-connect initiatives. This model has worked wonderfully for us and will continue to deliver a broad platform to provide value to our customers.

Our CSM exports business has been delivering largely as per plan. Over time, we have built a steady pipeline of exciting molecules, which when commercialized will cater to markets of a very large order. The pattern of introduction of new molecules each year will continue, thereby giving us a profitable product-mix comprising of relatively newer agrochemicals while insulating us from softer sector dynamics.

What makes all of this possible is our commitment to driving a very efficient balance sheet. We continue to build infrastructure, systems & processes which will deliver superior value to our shareholders in medium to long term. The feather in the cap will be a favourable monsoon this year, which will benefit not just us, but the entire agri-sector at large.”

Outlook

The view on the business is positive, duly supported by favourable expectations of good monsoon in the key domestic market, normalization of momentum in exports and regular introduction of 2 - 3 products in both the segments
1. Growth on the domestic front will be driven by a leading profile of exciting products that have been launched in the past couple of years and augmented by new introductions
• This will be supported by extensive efforts to establish the range of products further, while leveraging the extensive distribution apparatus and farmer outreach initiatives of the Company
• Company to introduce a new herbicide named, ‘Legacee’ during Kharif 2016
2. Custom synthesis exports remains well-placed to deliver robust upsides in the coming year on the back of:
• Growth in requirements for existing molecules and commercialization of new molecules as per plan; continuing strong order book position
• Production scale-up on account of the two newly commissioned plants at Jambusar
• Focus on developing new process technologies through investment in R&D
• Initiated business in the pharmaceuticals segment