Earnings Review: PI Ind profit up on export volume and currency gains

4 Aug 2022

PI Industries Ltd’s bottomline grew in the quarter ended June on the back of a sharp increase in exports volume, pass through of rising input costs and currency gains.

The consolidated net profit of the chemical company increased by 39% on the year to 2.6 bln rupees in Apr-Jun. The standalone net profit of 2.5 bln rupees was above analyst estimates of 2.3 bln rupees

PI Industries’ consolidated net sales rose by 29% on the year to 15.4 bln rupees. But adjusted for currency gains from its export sales, the company’s net sales were up by 21%. Exports sales accounted for 74% of total sales.

The standalone net sales of the company stood at 15 bln rupees and was slightly above analyst estimates of 14.8 bln rupees.

Exports volume jumped by 30%, the company said in its investor presentation following the results announcement.

The June quarter sales increase in the domestic market was a mere 4% on the year. Had the company not taken price hikes during the quarter the domestic net sales may have gone down.

PI Industries’ consolidated operating costs rose by 27% on the year to 12 bln rupees in Apr-Jun and the operating margin was higher at 22.1% as compared to 20.3% in the year ago period.

The rise in operating costs was lower than that of net sales mainly due to lower increase in cost of materials consumed and employee expenses.

The cost of materials consumed went up by only 9% on the year to 8.7 bln rupee in the June quarter while employee expenses were up by 8% to 1.3 bln rupees.

However, the other expenses, which included sales promotion costs, jumped 31% to 2.1 bln rupees.

The company said that it maintained higher inventory levels in Apr-Jun at 15.8 bln rupees and its working capital stood at 102 days as of June 30 as compared to 103 days as of Mar 31.

The capital expenditure of PI Industries was 506 mln rupees in the June quarter.

The company said it aimed to deliver 20% sales growth in 2022-23 (Apr-Mar).