PI Industry: CMP: 3790 Sales Gr long term: 19% CYear: 18% | fy_24 result update
(Strong Sales growth of 19% was seen despite weak Chemical industry sentiments)
Founded and Incorporated by the name Mewar Oil & General Mills Ltd. in 1946. Later changed the name to PI Ind during later 1999. Today it has emerged as among the TOP Agrochem companies of India.
In the country where MNC countries like Bayer having deep rooted roots in India Pi Industry emerge to be among leading agrochem companies. A company with Very high growth, Low debt, Best Margin and best R-O-E in the industry. They were able to grow their revenue and profits from 200 Cr and 9 Cr from 2003 to last year around 6600 Cr and profits of 1700 Cr respectively. A growth of around 30X has been seen in the last 20 years. Hence, Investment of 1 lakh is already 8 Cr in the last 20 years + yearly Dividend received today is more than 2X the amount invested.We have been recommending this company since more than fy_2008. When investors are looking daily for new stock of the day companies like Pi have provided huge wealth & passive income opportunities.
Fy_24 Results:
Revenue from Operations:
The revenue for FY24 is INR 71,45 Cr, reflecting a significant growth of 18% compared to previous financial years.
Quarterly revenue for Q4 FY24 stands at INR 16,26 Cr, showing stability and growth of 11% which was somewhat lesser than the trend.
Strong Volume growth was achieved from price in the international market, currency and favourable product mix. 26% growth came from Exports due to the scale up of existing products and introduction of 4 new products.
Profit After Tax:
Profit for FY24 is INR 1681 Cr, indicating substantial 37% growth.
Margin Analysis
Efficiencies and price increases in Exports and Domestic offset rising input costs. Favourable product mix and a significant increase in operating leverage reflected in an improvement in Profit margin. The profit margins have expanded significantly by 450 basis points due to the effective cost management and increased revenues.
We may see 15% sales growth and 39% profit growth for even fy_25.
Future Outlook
The company’s strong revenue and profit growth, coupled with margin expansion, indicates a positive outlook.
Continuous improvements in cost management and operational efficiency are likely to support sustained growth.
Investors can anticipate continued strong performance, with rising EPS suggesting potential for higher dividends or reinvestment into growth opportunities.
Capitalised PI Health Sciences Ltd. (PIHS) for planned acquisitions and capacity build up. Progressing on a strategic path with Twin Acquisitions into Pharma CDMO space committed to building a differentiated pharma play. This is the Large addressable global market with 7.8% CAGR growth. Both acquisitions are being made through PI Health Sciences Ltd. (PIHS), a 100% subsidiary of PI.
We have been recommending this company as a long-term asset for a long time. Those bought during the last fall can buy more during any fall near 2733 while the target for next 3 years should be 5101. Can hold remaining for the long-term wealth as we can expect high growth in this sector this decade due to high demand in agri. Sales Growth of around 18% to be driven by the portfolio of new product launches and the products launched over the last few years.
Outlook: A growing population will need 50%+ more food to meet accelerating demand by 2050. Climate change and significant loss of arable land per capita will require improvement in farm productivity to ensure food security. India is emerging as the 3rd largest economy; to create growth opportunities in the domestic market and a global supply hub.
We may see PI Industry reach the landmark 10000 Cr sales in the next 2 Years. Mulityear rally could be seen here along with high consistent and growing dividends.
Strong 24% holding is with several mutual fund & Insurance companies & 19% with several FPI.
Can give 1.5% weightage in Portfolio.
DISCLOSURE: FOR EDUCATION PURPOSES, DO NOT TREAT AS A RECOMENDATION
