In This Article:
Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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PI Industries Ltd (BOM:523642) reported a 10% increase in export revenue driven by volume growth and new product launches.
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The company's new products have shown a 42% increase year-on-year in the domestic business.
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The biological portfolio delivered a robust 18% growth year-on-year, enhancing profit margins.
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PI Industries Ltd (BOM:523642) has maintained strong relationships with global innovators, leading to the commercialization of 6 to 7 molecules.
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The company has improved its ESG performance, reflected in an upgrade of its S&P Global CSA ranking to the 97th percentile.
Negative Points
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The domestic revenue declined by 5% due to delayed rainfall and price pressures impacting demand.
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The Pharma business experienced softness due to inventory issues at the innovator level and a customer filing for Chapter 11.
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The company revised its growth guidance to high single digits from an earlier 15% due to global industry challenges.
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Legacy products in the CSM business are experiencing slower growth compared to new products.
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There is a temporary slowdown in the export business due to inventory levels and deferred procurement decisions by global companies.
Q & A Highlights
Q: Can you explain the reasons for the softness in the Pharma business and the outlook for volume growth? A: The softness is temporary, mainly due to inventory at the innovators' level and a customer filing for Chapter 11, impacting predicted revenues and margins. However, we expect volumes to pick up in the third and fourth quarters. - Unidentified_6
Q: What is driving the revision in growth guidance to high single digits from the earlier 15%? A: The revision is due to the global industry landscape, where companies are in a wait-and-watch mode, monitoring inventory levels and deferring procurement decisions. This has led us to realign our growth guidance for FY25. - Unidentified_6
Q: How are the new products contributing to the margin profile, and what percentage do they represent in the export portfolio? A: New products account for 16-18% of the export portfolio, with a margin profile broadly similar to legacy products. However, as we improve processes, some margin improvement is shared with customers. - Unidentified_6
Q: Can you provide insights into the domestic business performance and expectations for the second half? A: The domestic brand business has seen a volume growth of 12% and overall growth of 7% in Q2. We expect double-digit growth in the second half, driven by new product launches and improved reservoir conditions. - Unidentified_5