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PI Industries: Custom Synthesis Segment Disappoints - Views on News from Equitymaster
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  • Feb 23, 2017 - PI Industries: Custom Synthesis Segment Disappoints

PI Industries: Custom Synthesis Segment Disappoints
Feb 23, 2017

PI Industries has announced the third quarter results of financial year 2016-2017 (3QFY17). While the topline declined by 4.5% YoY, the bottomline increased by 32.7% YoY during the quarter.

Performance summary:
  • Total income increased declined by 4.5% YoY during 3QFY17. Net sales declined by 5.1% YoY. On the other hand, other operating income increased by 54.5% YoY. Gross domestic sales grew by 13% YoY to Rs 1.8 billion despite demonetisation and adverse weather in the southern market. Custom synthesis (CSM) revenues declined by 12% YoY following advancement of orders witnessed in 2QFY17 and a weak global agrochemical scenario.
  • Operating margins stood at 21.2% during the quarter. Operating profit grew marginally by 0.3%YoY driven by operating leverage and better product mix.
  • Other income increased by 66.7% YoY. Depreciation saw a sharp increase of 66.7% YoY.
  • Net profit increased by 32.7% YoY. This is on the back of lower tax rate (effective tax rate: 3.4%).

    (Rs m) 2QFY16 2QFY17 Change 1HFY16 1HFY17 Change
    Net sales 1,418 1,427 0.6% 2,477 2,352 -5.1%
    Other operating income 11 8 -26.2% 19 13 -29.1%
    Total Income 1,429 1,435 0.4% 2,496 2,365 -5.3%
    Expenditure 1,209 1,215 0.5% 2,158 2,058 -4.6%
    Operating profit (EBDITA) 219 220 0.3% 338 307 -9.2%
    Operating profit margin (%) 15.3% 15.3% 13.7% 13.1%
    Other income 4 10 162.2% 8 11 44.7%
    Interest 6 4 -35.7% 7 4 -35.8%
    Depreciation 13 13 -3.8% 27 25 -4.5%
    Profit before tax 204 213 4.5% 313 288 -7.7%
    Tax 69 75 8.4% 107 100 -6.2%
    Effective tax rate 34.0% 35.3% 34.2% 34.7%
    Profit after tax/(loss) 135 138 2.5% 206 188 -8.5%
    Net profit margin (%) 9.5% 9.7% 8.3% 8.0%
    No. of shares (m) 22
    Fully diluted EPS (Rs)* 20.80
    P/E (x)* 21.5
    *Based on trailing 12-months earnings
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