CSM exports growth slowed down to 6% in FY25 owing to pricing pressure and inventory de-stocking, which is expected to continue even in FY26. However, PI is gaining traction on the non-agchem side of the portfolio, with non-agchem inquiries increasing from ~20% in FY22 to ~40% in FY25. It has a strong pipeline of products providing long-term visibility with 15+ new molecules commercialized over the last three years, and 90+ molecules are currently in the active pipeline.
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Dolat Capital Report
PI Industries Ltd.'s Q4 revenue/Ebitda at Rs 17.9 billion/Rs 4.6 billion (+3%/+3% YoY) was impacted by weak agchem exports, but was more than offset by growth in domestic business, driven by strong Rabi season. PAT declined 11% YoY to Rs 3.3 billion due to ETR of 23.6% (10.2% in Q4 FY24).
Management guided a mid-single digit revenue growth for FY26 (4% YoY growth in FY25) owing to pressure in custom synthesis and manufacturing exports due to inventory destocking, coupled with uncertain US tariffs and persistent pricing pressure in generics in domestic business.
The Pharma business is expected to grow >75% in FY26, with Ebitda break-even a few years away. Biologicals business to grow at 5x over the next five years.
We trim our FY26/FY27E EPS by 7%/8% owing to pricing pressure stemming from input cost softening, slowing volume growth and gradual ramp-up in pharma business.
We resume coverage with a ‘Reduce' rating with a target price of Rs 3,800 (30x FY27E EPS).
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