PL First Cut – PI Industries 1QFY24

PL First Cut – PI Industries 1QFY24 – *Himanshu Binani – Research Analyst, Prabhudas Lilladher Pvt Ltd*

PI Industries 1QFY24 First Cut: Absolute Outperformance

(CMP- Rs3,840; Mcap-Rs582bn; TP-Rs4,560; BUY)

❇️Key highlights of 1QFY24 results:

Revenue: Rs19.1bn, +24% YoY (6%/7% above our/cons. est)

EBITDA: Rs4.7bn, +35% YoY (12%/13% above our/cons. est)

EBITDA margin: 24.5%, +210 bps YoY (130bps/150bps above our/cons.est)

Net Profit: Rs3.8bn, +46% YoY (20%/18% above our/cons est)

Other highlights

❇️ Exports revenues were up 37% YoY to Rs15.6bn (Excl. Pharma revenue of Rs443mn at Rs15.2bn up 33% YoY) (PLe Rs13.93bn) (Volume/Price growth of 29%/4%)

❇️ Pharma acquisition revenue contribution: Archimica (started contributing from 27th April’23) of Rs374mn and Therachem (from 2nd June23) of Rs69mn.

❇️ Domestic revenues remained subdued and were down 13% YoY to Rs3.47bn (PLe Rs4.1bn) as focus was largely towards efficient WC than that of volume growth.

❇️ Favourable product mix coupled with contribution of Pharma business (GM’s of 75%) have resulted into gross margin expansion of 270bps YoY to 46.5%; while higher opex led by increased volumes in CSM and overheads & One-off related to pharma business has restricted EBITDA margin expansion of 210bps YoY at 24.5%.

❇️ Net cash stood at Rs28.06bn(Incl. QIP proceeds of balance Rs11.3bn; utilised Rs8.4bn till date).

❇️ Capex done in 1QFY24 at Rs6.5bn (incl. Rs5.3bn towards pharma assets acquired); organic capex at Rs1.24bn in 1QFY24 v/s Rs506mn last year; key focus of driving higher utilisation by improving throughput in CSM business.

❇️ CSM Order book remained ~USD1.8bn in June’23 flat QoQ.

❇️ Commercialised 1 molecule in CSM Business in 1QFY24; with +40 products at different development stages (>25% of which in Non-agrochem segment)

❇️ 1 new product launched in domestic market in 1QFY24.

❇️ Commercialization of 4-5 new molecules planned in FY24.

❇️ Trade WC reduced to 83 days as against 102 days.

❇️ Guidance: Confident of achieving +18-20% YoY revenue growth with continued improvement in margins in FY24E.