PI Industries reported its Q2 and H1 FY27 earnings, acknowledging a challenging industry cycle. While consolidated revenue saw a 9% year-on-year decline to Rs. 17,018 million, the company highlighted strong growth in domestic brands and biologicals. AgChem exports declined by 18%, impacted by input costs and pricing pressures. The company is focusing on new growth platforms in R&D, pharma, and specialty chemicals, with the launch of its new chemical entity, Pioxazon.
PI Industries Reports Q2 FY27 Financial Performance
PI Industries has announced its financial results for the second quarter and first half of FY27, amidst a challenging industry environment. The company noted that while the industry navigates a difficult cycle, its focus remains on strengthening long-term value drivers. This quarter saw robust growth in domestic brands and biologicals, although sector headwinds affected AgChem exports.
Key Financial Highlights
For Q2 FY27, the consolidated revenue stood at Rs. 17,018 million, marking a 9% decline year-on-year. Gross margins were reported at 49%, with EBITDA at 14%. The company also highlighted a disciplined approach to operational efficiency and capital allocation, reducing net working capital by 18 days, which released Rs. 298 crores of cash. Strong operating cash flow generation of Rs. 9.1 billion was noted.
Business Segment Performance
Ag Chem Exports saw a decline of 18%, attributed to price optimization amidst post-genericization challenges and cost escalation that could not be passed on. The company is broadening its growth base through the commercialization of new products, including three new CSM molecules and advancements in differentiated technologies like electronic and specialty chemicals.
The Domestic Agri business delivered strong performance with 19% growth, driven by an expanded crop reach and product portfolio. The focus on biologicals resulted in healthy growth of 45%, contributing 18% to the domestic Agri portfolio.
The global biologicals platform is gaining traction in international markets, with an expanded distribution network across Brazil, Mexico, Spain, and the US, achieving a 3x increase in distribution width. Revenue grew by over 250% year-on-year.
The Pharma business grew by 20% year-on-year, supported by deepening customer engagement and development capabilities. The company continues to invest in its R&D, pharma, global biologicals, and specialty chemicals segments for a well-diversified business portfolio.
Innovation and Future Growth Engines
PI Industries highlighted its role as India’s first and only agchem innovator, investing in R&D for the past 12 years. The company launched its first new chemical entity, Pioxaniliprole (Pioxazon), an insecticide for rice, corn, and Bengal gram, with regulatory filings progressing for global commercialization.
The company is also developing new platforms in pharma CRDMO and electronic and specialty chemicals. The Hyderabad CRDMO center of excellence is operational, and a new QC lab in Lodi is certified. The electronic and specialty chemicals segment is progressing, with a kilo lab in Udaipur expected to be operational by year-end. These initiatives are expected to contribute significantly to future growth.
Market Outlook
Mayank Singhal, Executive Vice Chairperson and Managing Director, acknowledged the difficult quarter but expressed confidence in the company emerging stronger. He noted that global crop protection market channel stocks are normalizing, and the industry is facing headwinds such as uneven weather and rising input costs. However, the structural picture for feeding a growing global population remains positive, emphasizing the importance of innovation and trusted supply chains.
Q&A Highlights
During the Q&A session, the company clarified that newly commercialized CSM products contribute 16% to 18% to Ag Chem exports on a yearly basis. The gross margin is currently around 47%-48%, with efforts to maintain this level despite market dynamics. Investments in new businesses, including pharma and biologicals, contributed to a 6% increase in overhead costs year-on-year, with startup costs for these businesses expected to take 2 to 3 years.
Source: BSE
