PI Industries Limited (PI), a company with an integrated approach to Agri sciences business, announced its financial results for the quarter and half year ended September 30, 2019.
Financial and Operational Commentary for the quarter and half year ended September 30, 2019.
Q2 revenue showed 25% growth on the back of strong 52% improvement in exports more than making up for the adverse trends in the domestic market. New products commercialized in last few years are showing continued momentum with future enquires indicating a healthy trend. Erratic/delayed advent of monsoon and higher trade inventory dampened domestic demand resulting in a decline of 12% in domestic revenue.
H1 revenues showed 25% gains with 55% rise in exports.
Q2 EBITDA showed 43% gains at Rs. 192 crore, with margins coming in at ~21%. Margins have maintained despite softness in domestic market and ramp-up cost in new manufacturing facilities.
H1 EBITDA stood at Rs. 343 crore, up 36% and Margins at ~21%.
Q2 PAT came in at Rs. 123 crore, increasing by 30% YoY. The EPS stood at Rs. 8.9 per share in-line with the performance achieved. H1 PAT stood at Rs. 224 crore, up 27% YoY. Effective tax rate was at 27% due to change in SEZ share to overall business.
Strong Balance Sheet
Sustained gains in performance have resulted in strong operating cash position and a robust balance sheet. The Net Debt to Equity ratio remained at Zero. Cash position as on September 30, 2019 stood at Rs. 171 crore.
Commenting on the performance, Mr. Mayank Singhal - Vice Chairman & Managing Director, PI Industries Limited, said: "We have reported another great quarter backed by strong performance in exports. We are on the verge of commissioning another multi-purpose plant in Jambusar facility to support our ever expanding demand in export business. We are witnessing a healthy increase in number of enquiries and expect to commercialize 2-3 molecules in current year. We have also been able to add new customers to our portfolio as innovator partners seek to benefit from PI's capabilities and experience, backed by the trust we have built with them.
Kharif has seen uneven distribution of rainfall while overall rainfall was near normal. Due to this uneven & erratic spread of monsoon, industry has seen a far softer off-take than expected. On the other hand, with good monsoon and higher water availability in reservoir, we expect a better Rabi season this year. I must add that we have launched 'Awkira', a new generation herbicide to help find better solutions to Indian farmers for resistant weeds.
The process of closing of Isagro acquisition is progressing as planned and consummation is expected to be completed in Q3 FY20. This will add to additional manufacturing capacities to meet growing demand of global customers and strengthen our position in Indian market by leveraging complementary product portfolio and distribution channel.
Investments in strengthening expertise in new chemistries and technologies is a key pursuit for us and we are progressing well on newer products at our R&D scale."
The outlook for H2 FY20 continues to be healthy on account of:
- Sustained introduction of high-potential brands targeting variety of crops and regions. Expected good Rabi showing improved traction in-line with planned development initiatives
- Sustained growth in exports given higher requirement for commercialized molecules. Progressive commissioning of additional capacities will help towards enhancing the delivery run rates.