Expiry of patent for key product weighs on PI Industries
Also Read: Heavy showers could rain on agrochemical firms' parade in Q2 Meanwhile, PI has made an offer to acquire Plant Health Care (PHC) plc, a UK-based company in the crop protection business, for £32.8 million (about ₹360 crore). However, PHC’s current contribution to revenue would be a mere 1.3%.
PI’s management stated in the latest earnings call that it is actively evaluating other inorganic opportunities, supported by a cash balance of almost ₹4,000 crore. However, its diversification strategy is yet to show results.
“Though we believe the company is taking efforts for diversification in pharma, electronic segments, as well as ex-pyroxa agri-chem portfolio, particularly biological products; we await meaningful contribution from the same," said JM Financial Institutional Securities Ltd after the Q1FY25 results. Amid uncertainties on business prospects, PI’s shares have gained around 26% in the past one year, lagging the Nifty 500’s 34% rise.
The stock trades at a price-to-earnings multiple of 41.5x based on FY25 estimates. How the market dynamics evolve for its key product would be crucial ahead.
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