PI Industries Stock Analysis| PI Industries Q2FY21 Results Analysis

3 min read
PI Industries stock analysis. How were PI Industries Q2FY21 results and how is its future business outlook? Check out the blog to find out.

PI Industries Q2FY21 Performance Review

Introduction

PI Industries is a large cap company operating in Pesticides/Agro chemical sector. Company operates in an elite sector and has quite a lot of government support, thus auguring its performance. Recently company reported its latest quarter results. Company’s standalone sales increased 18% YoY . Let us analyze the Q2FY21 results in this blog.

Stock O Meter
Stock O Meter – A Complete Equity Research Tool by Invest Yadnya

PI Industries Q2FY21 Performance Review

  • Company currently has a market capitalization of ~INR 32,000 crore. According to AMFI Market capitalization, this is a large cap company.
  • This may lead to PI industries being a part of large cap indices, which will ultimately lead to significant passive investment flow in the company.
  • We can see the other details of the company like PE, 52 week high/low , book value etc. on the stockometer website.
PI Industries overview
PI Industries overview – Stock-o-meter
  • Company’s PE has currently rerated from current levels mainly as it has posted healthy Q2FY21 results.

Quarterly Results

PI Industries Quarterly results
PI Industries Quarterly results – Stock-o-meter
  • As seen. Company has reported healthy Q2FY21 results, with sales increasing 18% on YoY basis .
  • Company has also shown a stellar increase in operating profit of 47% , resulting in operating profit expansion of 6% to 28%.
  • As seen, the PAT has registered a growth of ~48%, resulting in strong profit growth of 70% YoY.
  • This is the reason that stock is trading at higher multiples as market participants are quite positive about company’s growth prospects.
  • If the company keeps posting such healthy quarterly revenues, FY21 yearly growth can be ~20%.
  • This is a very positive sign especially when GDP is expected to fall by 9-10%, but company is posting such healthy results mainly being in agro-chemical sector.

Key Ratios

PI Industries Key Ratios
PI Industries Key Ratios – Stock-o-meter
  • As seen company has healthy return ratios with RoE and RoCE > 20%. It has almost negligible D/E and healthy interest coverage ratio despite being a capital intensive company.
  • If we take a look at company’s sales and Profit CAGR over the years, we can see that last 3 year and 5 year growth is not that impressive.
  • However the company has consolidated its performance in this year and is on growth trajectory.
PI Industries historical growth
PI Industries historical growth – Stock-o-meter

Earnings Visibility

  • Currently, company has an order book ~$1.5 bn which is ~ INR 11,000 crore.
  • Q2FY21 revenue is ~1071 crore, if company continues such performance for the rest of the quarters, its FY21E revenue can be ~INR 4400 crore.
  • This indicates that company has healthy earnings visibility for at least next 2-2.5 years.
  • Company also looks well place in terms of reserves and cashflows and can take any acquisition if required.
PI Industries cashflow
PI Industries cashflow – Stock-o-meter
PI Industries Balance sheet
PI Industries Balance sheet – Stock – o- meter

Shareholding Pattern

PI Industries shareholding pattern
PI Industries shareholding pattern – Stock-o-meter
  • As seen, Indian promoters have declined their stake in this quarter from ~51% to ~47%, while DIIs have increased their stake from 19% to ~26%.

Strong Business Outlook

  • All Manufacturing Facilities are operational
  • Capacity Utilization building back to Pre-COVID levels
  • Good Monsoon – Positive Outlook for overall Agriculture Sector
  • Also, Good Outlook for Rabi Crops as reservoirs are full
  • Expecting Robust Demand for branded products to drive growth

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: