PI Industries Q1 Results Review - Higher Pharma Loss Dents CSM Beat: Nirmal Bang

Nirmal Bang Report

PI Industries Ltd.’s Q1 FY25 consolidated revenue at Rs 20.69 billion was a miss of 6.4% versus our estimate. Agrochem revenue at Rs 6.38 billion was a miss of 5.1%. CSM export revenue at Rs 17.24 billion (as per our calculation from PPT) was a miss of 1.1%. Pharma business revenue at Rs 253 million was a miss of 54.3%.

Agrochem Ebit (our reconciliation) at Rs 5.59 billion was a beat of 4%. Agrochem Ebitda (our reconciliation) at Rs 6.34 billion beat our estimate by 5%.

YoY Analysis: Revenue was up 8.3% YoY. Revenue, excluding Pharma, was up 9.5% YoY on a like-to-like basis. Custom synthesis manufacturing Exports revenue was up 13.5% YoY whereas CPC Domestic business revenue was down by 8.0% YoY. Gross margin at 51.8% expanded by 526bps and Ebitda margin at 28.2% expanded by 370 bps. Ebitda increased by 24.7% YoY.

Segment Ebit (our reconciliation): Agrochem Ebit was up 35% YoY; Pharma Ebit loss increased to Rs 594 million from Rs 152 million in Q1 FY24. However, Pharma Ebit loss came in above our loss estimate of Rs 264 million.

Pharma capital employed: Rs 8.44 billion as of June-24 versus Rs 8.97 billion in March-24. Pharma assets decreased by Rs 608 million to Rs 12.68 billion and Liabilities decreased by Rs 72 million to Rs 4.24 billion by the end of June’24 on a QoQ basis.

CSM getting traction from new launches and non-agrochem pipeline: PI is aiming at an annual commercialisation of 6-7 CSM molecules in future besides new businesses in Agrochem and Non-agrochem segments (50% of new enquiries). The share of the Non-agrochem segment is set to cross 30% over the next three years from 23-24% in FY24.

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