Ladies and gentlemen, good day and welcome to PI Industries Limited Q4 FY25 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nishid Solanki from CDR India. Thank you, and over to you, Mr. Solanki.
Thank you. Good afternoon, everyone, and thank you for joining us on PI Industries Q4 FY2025 earnings conference call. Today, we are joined by senior members of the management team, including Mr. Mayank Singhvi, Executive Vice Chairman and Managing Director; Mr. Rajnish Sarna, Joint Managing Director; Mr. Sanjay Agarwal, Group Chief Financial Officer; Dr. Atul Gupta, CEO Exports; Mr. Prashant Hegde, CEO Domestic Brands; and Dr. Ramesh Ramasubramanian, Global CEO, PI Health Sciences. We will begin the call with key perspectives from Mr. Singhvi. Following that, Mr. Agarwal will share his views on the financial performance. Thereafter, the forum will be open for Question and Answer sessions.
Before we begin, I would like to underline that certain statements that may be made on today's conference call may be forward-looking in nature, and a disclaimer to this effect has been included in the investor presentation shared with you earlier and also available on the stock exchange website. I would now like to request Mr. Singh to share his perspectives. Thank you, and over to you, sir.
Yes, thanks, and good afternoon. Thank you, everyone, and good afternoon to all present. I am here to discuss the operating environment and provide an update on our strategic initiatives to enhance our global position as a leader in technology research and manufacturing in the life science arena. Let me start by providing a brief perspective on the industry scenario. While the overall crop protection market continues to expand, challenges emerge in the form of extreme climate events, commodity pricing, tighter regulations, and soft demand sentiments, pricing pressures which weigh on the pace of growth. The industry is steadily pivoting towards more sustainable practices with growing investments in innovations of biologicals, agriculture, and digital farming. In recent months, trade flows have been impacted by tariff wars.
However, the mix in the long term remains positive, driven by the rising needs of higher agricultural productivity, greater resilience against climate threats, and a faster shift towards sustainability. Domestically, the science and the volume growth has observed even early tariff-sowing activities and favorable monsoon indications. The adoption of biologicals gained further momentum, aligning with the broader sustainable trends. Nevertheless, prioritization remains under pressure due to global oversupplies, increasing chain of competition, and declining raw material costs. The sector's growth trajectory will increasingly be influenced by innovation in different shapes, solutions, and shifts towards sustainable crop protection and supportive policy measures. Amid the business environment, outsourcing still remains a strategic imperative for multinational companies. In the agrochemical cost competitiveness, supply chain diversification, and need for stronger regulatory compliance are driving innovators to outsource manufacturing to India.
While in the pharmaceutical industry, outsourcing may align with high-value complex segments driven by end-to-end regulatory and scalability. Both sectors are shifting towards deeper long-term partnerships with companies prioritizing resilience, operating efficiencies, with a focus on technology and innovation. We are targeting growth opportunities in the CSM and expanding the addressable market of 15 billion to 20 billion in innovative products in ag. In parallel, we are positioning ourselves to capture across the value chain of the multi-billion dollar market of pharmaceuticals in the CRDMO and electronic and biologicals. This is well in line with the transformation from an ag science company to a life science company. Once again, the PI team yet again has delivered a commendable performance in Q4 and for the year as a whole, given the environment.
Our standalone performance for the year featured 6% growth in revenue, 17% growth in EBIT, broadly in line with our guidelines. The consolidated financials were markedly lower due to development spends in the newer business arenas. During 2025, our ag chem exports have continued to show improvement with 5% growth, which is in line with our plans. The growth remains driven by our new product commercialization over the last years, with a 31% growth which we've been able to achieve year-on-year in this area. Over the past years alone, we have commercialized 15 molecules. Our pipeline remains robust, with approximately 50% inquiries also now being focused on non-ag chem molecules. Moving towards the domestic operation in Q4, our strong domestic brands have shown a growth of 21% year-on-year. Our set forth focus on product mix of innovative crop solutions to approach yield and the desired results to the farmer.
Our biological range again continues to support strength on strength with a strong 20% growth from over the prior years, which is already on a very high growth rate over the last two years. Domestically, we have introduced seven new brands in this year. Further, we have a pipeline of 20-odd products in various stages of development to be introduced over the years. While our core business mix assures a sustained traction for the coming years, the development of new verticals contributes to the future performance as we are transforming from a pure ag chem leader to a life science powerhouse and aiming to become a global technology platform leader in biological space while becoming a differentiated player in the CRDMO pharma play.
While we continue to build a fully integrated CRDMO platform, providing world-class solutions backed with strong knowledge and high-quality assets across from research, giggle, commercial, to manufacturing. With excellent leadership now in place, we are on an excellent path to look for growth. During this year, we have upgraded and added our asset bases across geographies in alignment to our strategy to meet our customer needs. Moving on to our biologicals, this category is offering an ag experience at the fastest growth rate in recent times, outbeating the industry. Our acquisition of Plant Health Care, which has a specialization in peptides, marks a significant step towards our intent of becoming a platform technology-based product solutions and biologicals to serve the global markets. This is very much in line with our purpose of building a healthier planet. We are also marking good progress on our proprietary offerings.
We, as PI, with our first inventing from India to the world, which is currently in the midst of phase three trials, we are evaluating in partnerships across the world and developing regulatory data. Additionally, our R&D programs are giving us some positive progressive leads to build a pipeline with exciting outcomes. The initiatives are perfectly aligned with us, strengthening our position as a technology leader and a manufacturing powerhouse to bring opportunities for partnership models across the globe. We are remaining the leader of the chemical industry in ESG. Having achieved the claims, we are proud to have retained our listing in the prestigious S&P Global Sustainability Yearbook for the second time in 2025, which speaks volumes of our ESG journey.
While the global industry navigates trajectory headwinds and general business dynamics remain uncertain, we maintain our growth outlook, expecting the broader sentiments to improve in the second half of the year. We are confident in the long-term prospects of growth outlooks. Our investments in new capabilities, capacities across the business lines at a global level remain on track, setting the stage to deliver a vision. With this, thank you to all of you for joining the call. I would now like to hand over to Sanjay, our CFO, to take this and over to you, Sanjay. Thank you.
Thank you, Mr. Singh. Good afternoon, everyone, on the call today. I will summarize the company's financial highlights for the quarter ended 31st March 2025. Please note all the numbers which we are talking here are on year-on-year basis. Our comparisons are on year-on-year basis and refer to the consolidated performance. To share the performance highlights during quarter four FY25, we reported a revenue of INR 17,871 million, a growth of 3% over the same period last year, which implies a three-year CAGR of 9%. While there is a decline in the ag chem exports, the volume is up by 7%, and new product growth is 23% year-on-year due to the scale-up of products commercialized over the last three years. Our domestic branded revenue business grew by 21% year-on-year, supported by a strong rabi season, marked by increased acreages in wheat, rice, and pulses.
Pharma business also had a strong sequential revenue growth of 33%, 2,850 million in quarter four of FY25. In spite of all the development expenses we had in pharma and our PHC business, our consolidated EBITDA grew by 3% and remained at a healthy 25.6% due to good product mix and tight overhead management. Let me also cover the performance for the full year FY25. Revenue was 79,778 million, a growth of 4% over the same period last year, which implies a three-year CAGR of 15%. New launches and biologicals remain a key feature for us in FY25. Ag Chem export revenue grew by 5%. Our new product growth is 31% year-on-year, and domestic branded revenue business grew by 6% and a volume of 9% up. Our momentum for launches of new innovative products has continued with seven new products launched during this year with a crop solution approach.
Similarly, our biologicals business on a yearly basis grew by 20%. On a consolidated basis, the EBITDA grew by 8% for the full year to 27.4%. On a standalone basis, if we look at it, our EBITDA grew much higher at 17%, and PAT grew by 8%. On a consolidated basis, the profit is marginally down by 1% at INR 16,602 million, impacted slightly due to a higher ETR at 22.5% versus 11.2% in the last year. We expect ETR to be in the range of 22%-23% for the next two to three years. The trade working capital, the number of days, has increased to 73 days, while the better inventory management has led to a reduction in inventory days from 62 days to 45. Our balance sheet further strengthened during the year.
Our net worth increased to I 1,170 million, and with a very healthy net cash balance of 40,926 million. In summary, our healthy financial performance leading to stable cash flows provides us the flexibility to continue with our growth plans and our capex spends, allocating additional capital towards our future growth engines in PIHS, our pharma business, and PHC, our global biologicals franchise. This gives us confidence to have a focused growth. With this, friends, I'll conclude my opening remarks. I'll now request the moderator to open the forum for Q&A. Thank you.
Thank you. We will now begin the Question and Answer session. Anyone who wishes to ask a question can press star and one on the touch screen. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. As a reminder to all the participants, please restrict yourselves to two questions. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Rohit Nagraj with BNK Securities. Please go ahead.
Yeah, thanks for the opportunity. I'm glad to hear that the MC has moved to phase III. Just one question on the MC of the upcoming April. In terms of what is the time to commercialize that we are looking at, and how much have we already invested in terms of R&D, and how much incremental R&D investments are likely to undergo for this MC? Thank you.
Maybe I'll take that.
Yes, sir.
Yeah. Okay. We are expecting, as we explained, we are right now in the process of regulatory data development, evaluation, and also application preparation. We expect to commercialize in the very first country in the next couple of years. As regards the second part of your question about the investment, etc., this is not in front of us. Also, it is very confidential data. I hope this helps you or this information helps you in your process.
Perfect. Thanks. Thanks. Second question, in terms of what is the composition of the new high-growth molecules in actual CSM by the end of FY2025? Similarly, the composition of biologicals in our domestic branded business at the end of FY2025? Thank you.
Yeah, maybe I can help you on that. Biologicals business would be around 18% to 20% of our total agri business, ag chem business in India. Similarly, the new products are broadly 15% to 18% of.
Ladies and gentlemen, the management line has been disconnected. Please be on hold while we quickly get them reconnected. Hello. Ladies and gentlemen, the management line has been reconnected. Please go ahead.
Nishid, should I repeat the answer to the earlier question, or did we move on to the next one?
Since you could repeat, I think the line got lost in between.
Okay. I'll just repeat. When we're talking about new product launches and their contribution to our ag chem export business, it is around 15 to 18%. Similarly, the biologicals business for our ag chem brand business accounts for around 18 to 20%. The biologicals business is the last question which you asked.
Right. Thanks a lot and all the best.
Thank you. The next question comes from the line of Vivek Rajamani with Morgan Stanley. Please go ahead.
Hi, sir. Thank you so much for the presentation. Just continuing with the question on the new products in your portfolio. For fiscal 2025, they've grown at about 30% plus. How should we be thinking about the growth of these new molecules in fiscal 2026 or even fiscal 2027? As a related question, these new molecules grew about 40% plus in 2Q and 3Q and about 20% plus in the remaining two quarters. Any thoughts with respect to is there a seasonality element here would also be super helpful. Thank you.
Yeah. I think for the next financial year also, we can have a similar new product. As you know, the new molecules are getting commercialized. 15 got commercialized in the last three years. They will continue with the same momentum of new products adding to the top-line growth and giving us a stable margin from that.
Sure, sir. That's helpful. Anything with respect to seasonality? Or it would just be equally spaced across the.
Let me be very strict. Seasonality, as you have seen over the years, quarter to quarter variation always happens. It depends on demand, supply, market situation, positioning. Yes, that will continue to happen. That is the genetic DNA of this business.
Sure, sir. And just a clarification. If you're going to continue the same momentum on these new molecules, would it be fair to say that the 15% to 18% of contribution that we have as of this year, that number could probably be maybe north of 20% to 25% by the end of next year? Would that be a fair assumption?
I would not put it as a mathematical computation, but yes, because there is a variation of volume and variety of multiple things come together. Our objective is to continue to increase this portfolio because some come in and some go out, right? That is the strategic way it works. That is the management which we work in.
Sure, sir. Thank you. I'll return the queue all the way there.
Thank you. Next question comes from the line of Abhijit Akela with Quartic Securities. Please go ahead.
Yeah. Thank you so much and good afternoon. The gross margins this quarter seem to be really strong, almost at record levels, despite the fact that there has been some price cuts in the CSM business, as we've alluded to in the presentation. Just sort of wondering what's behind the really strong gross margin. With regard to the EBITDA margin outlook for fiscal 2026, what's the range we should work with? I mean, this quarter we've reported 26%, but the full year was 27%. What's the right number to work with for next year?
I would look at it again, strategically as you said, quarter to quarter would not be the right way to look at numbers. Yes, the margins are based on daily product mix, good aggressive growth taking the domestic business, followed with how we look forward. As you have indicated earlier, we continue to keep those guidelines where we identify what is the percent of our EBITDA margin continues to go up. Yeah.
Speaker, this is the operator. Can you come a little closer to the mic while you answer? Thank you.
Yeah. As you have indicated clearly, product mix with the strong growth seen in the domestic business and continuing to look at the margin going forward, as indicated, we continue to maintain our guidelines on this thing.
Okay. Thank you. The other thing was just on a couple of data points, if I may, from Mr. Agarwal. One was what was the Pharma EBITDA loss for fiscal 2025? We've given the PBT loss, but would it be possible to just share the number at the EBITDA level? The presentation states that there's this aspirational target of increasing the biologicals revenue five times in five years. Where do those revenues stand at present? Therefore, where do they go in the next five years? Thank you so much.
Yes. The EBITDA loss for the full year has been in the range around INR 180 crore-INR 190 crore. Hello?
Yeah, yeah. Okay. Thank you for that. Yeah. And the biologicals revenue, what is it exactly right now in absolute rupee?
Sorry?
The biologicals revenue, what is the amount right now at present?
No, no. We spoke about it that the biological business contributes around 18 to 20% of our India agri brand business.
Yeah. The presentation states we want to increase it five times in the next five years.
Yeah. I mean, this is clearly we are looking at you asked two questions, I think, in the biologicals. One is what is that we are looking at? It's always stated 5X, clearly. Today, we are at something around.
35 to 40 million. We are at 35 to 40.
No, no, no. We're looking at the average revenue at 2,800,000,000 right now, which would probably move up to 5X. So we'll get a INR 10,000,000,000 target in the next five years. Yeah. 10,000,000,000, 12,000,000,000.
Understood. Thank you so much. That's helpful. Thank you. All the best.
Thank you. Next question comes from the line of Ankur Perival with Axis Capital. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. First question on the margin outlook for us. Now, as I understand, pharma losses are expected to go down as we look to wrap up this business over the coming FY 2026 or two to three years. At the same time, the ag chem business is going to see more launch of new products, which presumably will be a better margin. Still, we are maintaining our overall guidance at the same level as FY 2025. Is it that there is somewhat of pricing pass-through or maybe some pressure that we are seeing in the older products? If you can help your thoughts over there.
I think you should look at the businesses not by past maybe previous owners like a cookie cut. To be very honest, their investments and overheads which have been built up, the ratios are different. On an overall blended basis, we've indicated where we are looking in terms of margins, and that's what the company will continue to maintain and grow with.
Okay. Fair enough. A second question.
I think just to appreciate that the company is investing briefly to build a global footprint in biologics and in pharma and cost-returning global organization from a different cost structure. Taking all those blends and building up to create a nice next place to be in the lifetime space with investment for human capital and other areas.
Sure, sir. Secondly, on the pharma business, while we are targeting a much sharper sort of revenue growth going ahead, will we need an incremental FDA-approved automated media bigger production facility for this business to ramp up? Or that is still some time away and probably nominal CapEx will do here?
Clearly, I think there's a step-by-step approach. We have present assets which have been upgraded with investments. Clearly, as we see things turn around the corner, and you very well would understand, this asset comes as an asset-led business. As we see things turn a shape to our credit, we'll definitely be looking to scale up as we have ambitions to put a huge number in scale to grow with this business.
Sure, sir. Just one last bit, a bookkeeping one. In the balance sheet, we have a contract assets of around 4,300 million, which was around 1,500 to 1,600 million last year. If you can just highlight what exactly is that for.
Yeah. These are standard industry practice of having any business, I mean, any contract where the goods have not been delivered before the cut-off date. These are specific contracts wherein the goods are produced for a particular customer and which have now been subsequently then shipped out in the next subsequent months.
Sure. Otherwise, just is this for pharma or for the ag chem export rate?
It will be in both of the businesses.
Okay. Great. That's it from my side. Thank you and all the best.
Thank you, sir.
Thank you. Next question comes from the line of S. Ramesh with Nirmal Bang Equities. Please go ahead.
Thank you and good evening. In the Pharma business, when you're looking at improvement in margins, is it possible to share what is the kind of improvement in gross margin you can expect from this 52% FY2025? And in terms of the run rate for the overheads at this 3.06 billion in FY2025, do you see this stabilizing at these levels with marginal inflation-related increase, or would you see further increase in overheads?
I think the overheads have been, I mean, this particular financial year, we had unfortunately some one-offs which we had to take care of. Going forward, what I can say at this point in time, the business is built with a gross margin of around 60 to 65%. With the scale-up of the revenue, the operating leverage will start kicking in, and we should have a better profitability at the bottom line as well.
Can you share what is the one-off impact of the old inventory write-off? Does it increase overhead?
I mean, as you know, I mean, any business currently, the overheads what we have have been much higher versus the revenue what we have. Difficult for me to give you the exact numbers, but the current overheads have these development spends. As we spoke in the Q2, we had one particular customer where we had to take a doubtful debt provision and some other one-off costs which impacted this year. I mean, which has led to a higher overhead than this financial year, which we do not think would be there in the times to come.
Okay. So on the domestic business with the current run rate of around 14,000 million, what is the kind of potential you see? Or when do you think you can say go to over 20,000 million? Because a lot of small peers are already at 17,000 million, 10,000 million, and you have so many new products being launched. What is the kind of direction you are seeing this business heading towards over the next two, three years?
I think domestic business is about 50 to 60 crore, but it's pure brand business. Whereas when you're comparing to other smaller players, they also have technical and B2B business on and support. So PI's is a pure business brand play. That's for one clarification. Clearly, as you've indicated, this is we're looking at a 15 to 20% growth over and above the average industry too, as per the industry growth.
Okay. Thank you very much, Anil Jain. All the best.
Thank you. Next question comes from the line of Saurabh Jain with HSBC. Please go ahead.
Hello. Thank you so much for the opportunity. If you can give some more insights into your guidance. When you say a single-digit growth guidance, so that kind of implies a broad range from 1% to 9%. Is there a possibility you can give a sense on whether it's going to be a mid-single-digit or high-single-digit kind of guidance? That's my first question, please.
Very clearly, a bit early, but we have looked at the median level growth level this year. Given the industry has been dealing with certain fees of financial situations and policies across the globe. As you said, we would definitely see some policy spins coming in H2, but that is where we stand for now, and we will keep that outlook for the present.
When you say H2, do you mean by calendar year or it's going to be the financial year?
Financial year, sir.
Okay. Understood. Possible to also give a sense on how do you see the export versus domestic in terms of your guidance? Both business growing by single digit or I presume domestic would be higher?
Yes. Obviously, given our hopefully keeping the climate situation to positive trend, we would see a good growth in the domestic business. As you are very well aware, the global headwinds, that's where the areas are still under challenges from the export front. That is what we believe that from H2, the export business would start well with the launch of a new product and the growth in those areas.
Okay. Thank you. My second question is relating to CapEx. The INR 9.25 billion of CapEx, this includes the amount that you paid for PHC acquisition, right?
No. So this is only the pre-CapEx addition. There is a small minor amount which has been added at the consol level arising from the PHC acquisition, but primarily relates to the CapEx spend what we have done at PI and at PISS.
Okay. Understood. One final bit on the acquisition side, can you give us a direction in terms of how much of the CapEx you are directing towards your legacy Ag Chem portfolio? Does it share a major part of your CapEx or is it moderate? Any insights would be very useful.
I'm not very clear of the question. What do you mean by legacy Ag Chem portfolio CapEx?
The key products in the portfolio which you export for the last few years, which are some sort of headwinds now, those products, are you committing more Capex incrementally or just going down any sense on that, sir?
No. I think the company looks at CapEx based on what is the requirements, the business plans, or other commitments by some of our partners on the product and value efficiency drivers. Typically, the existing products are the assets which need constant upgradation and improvements in all those areas. That looks back, and that is typically how they look. When we build assets, we are more strategically investing the majority of that for building for our new offerings and new product solutions.
Okay. Sure. Thank you so much and all the best.
Thank you. Next question comes from the line of Madhav with Fidelity. Please go ahead.
Thank you, Dustin. Thank you so much for your time. I just had one question. I think we have one entry which you said has reached phase three trials. Just wanted to understand that if we will be launching our own branded product in the market, does that create a longer-term conflict of interest with our existing model which has been a more contract manufacturing CSM model that we partner with?
I'm not certain about how do you look at it, the conflict of interest, because PI in any case has also been branded sales. It's also been contract manufacturing. It's also been innovation. The unique point of our capability at a global level is partnerships across the value chain. Actually, this gives the focus on what the business partners are spending in our relationships from being an innovator to a market score as a co-creator to develop this business. I don't really see that as a challenge.
Okay. We will ask this because our branded business is more focused in India, whereas our exports is to be more contract manufacturing driven. That is why the question. Got it. Got it. Understood.
The same way the products will work. They will work on the same ground. Partners globally, locally, partner and service ourselves. That is how the same business levels and same capabilities.
Thank you. Thank you.
Thank you. Next question comes from the line of Krishan Parvani with GM Financial . Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. A couple from my side. With strong 65% growth in the Pharma business, do you expect Pharma businesses to run a bit of positive in F2026? Or if not in F2026, then when?
Sorry? The question is not clear.
Yeah. I was asking, since you expect 75% revenue growth in the pharma business, when do you expect the pharma business to turn a bit positive?
Yeah. This one will take time. It is not easy to give you a number. It will definitely take time over the next few years because once we are scaling up, we will also be doing furthermore, whatever people expenses and all will also go up. A bit of breakeven, yes, that will be on the horizon, but it will definitely take some more.
Yeah. We expect very clearly over the next 2026, 2027, 2028, we should see the positive trends of this business very clearly.
Okay. Okay. Got it. On the Payalkanilithol, the new NC, just wanted to understand which major crop would this insecticide be used on and which is the first country you intend to commercialize in?
This is a diamond chemistry, so we will be looking at the multi-crop application. Obviously, the prize would be to see if we can get India first and then forward, but while we work in two or three countries with partners for application. Depending on how the regulatory framework works.
Okay. Noted. One final bit on the CapEx. How much CapEx will you be incurring in FY 2026? If you could give the breakdown of agro and pharma, please.
There is no breakdown you have, but CapEx in the manufacturing will be around that same area right now, about INR 8-900 crore in the similar ratio that you had last year.
Understood, sir. Thank you for answering my question, sir. Wish you all the best.
Thank you. Next question comes from the line of Sumant Kumar, Motilal Oswal Financial Services Limited. Please go ahead.
Yeah. Hi, sir. So can you comment on EBITDA margin guidance for FY2026?
Yes. We spoke about it. We would be looking at around 25% in the range of around 25%.
As our indicators.
Okay. So now compared to FY25, do we have any expansion from here?
Expansion as of now, we see when we're looking at the next 12 months down the line, there are investments what we are doing in the other businesses which are going to be our growth engines. I think for now, it is better to take around, I mean, our...
That's our guided line, and we continue with that very straight.
Okay. Okay. Any CapEx for FY 2026, 2027, and tax rate guidance?
With the tax year 2025-2026, CapEx should be in the range of around INR 8,000 to 9,000 million, and the effective tax rate should be around 23%.
Okay. Okay. Thank you so much.
Thank you. Next question comes from the line of Riju with Antique Stock Broking. Please go ahead.
Hi, sir. Thanks for the opportunity. My question regarding in terms of the guidance that you have provided. The growth that you are expecting, is it mainly driven with the volume or kind of a price increase you are expecting?
If we see the performance of last year, 9% volume growth, 6% on value growth, hoping the prices are able to stabilize, we should be looking. Volume will definitely grow, and that volume and that balance should remain depending on how the market reacts. This is not a straight line walk, but as you know, sometimes prices go down, volumes pick up, prices go up, volumes go down. That seems to be the range of balance if you look at all companies and segment players.
Yeah. Okay. Understood that. In terms of the growth in the Q4 and as you were reporting in the presentation, what I believe is that there was a strong growth in volumes which was partially offset by the regulation growth. How are the end product prices currently, and how do you see going forward those prices?
Sorry, which segment?
In terms of extreme exports.
The segment, I think, as you would appreciate, is the ag chem. We are continuing to grow our new product pipeline 30-odd %. If we look at the products in the individual areas, which areas, which segments are with the customers. Broadly, that's a strategic move. We are continuing to grow the existing product profile in the same ratio, while the other products continue at steady state growth rate. Yeah.
That I understood, but what I wanted to understand is that during the quarter Q4, FY2025, our AP export volume growth was roughly 7%. Correct me if I'm wrong. One can expect that there was a sharp dip in the prices. How do you see these prices going forward?
Let me take this. Yes. I mean, there is obviously some price softening, and that is on the basis of input cost, which is also softening. Over the last one year, one and a half years post-COVID, input prices have come down, okay? Given our business model of CSM export, where these input cost improvements are also passed on or passed through, the pricing of some of these existing products has also come down, which is also reflecting in the growth numbers that you were explaining.
Understood. Thanks for this clarification. One last thing, kind of a bookkeeping. If you could tell the order book size that we have currently as on Q4, FY2025.
Yeah. This is also 1.3 billion plus, but we do not have a direct number in front.
Understood. Thanks for the clarification. Thank you.
I reminded to all, sorry. Next question comes from the line of KR Pandya with ICICI Prudential Life Insurance Company Limited. Please go ahead.
Thank you for the opportunity. Question on the CapEx. For FY 2025, we have spent around 8,000,000,000 on the organic CapEx, and guidance also remains similar number for FY 2026. On the current gross block, that suggests that over two years, the average expense in the gross block would be upwards of 15 to 17%, whereas our revenue growth is relatively lower. Is anything changing in terms of asset turn, or eventually the asset turn has to catch up by higher revenues? If you can just throw some light on this and the breakup of the CapEx on domestic, exports, and Pharma or any color on CapEx. Thank you.
As you would understand, as we are building a new vertical called Pharma, obviously the CapEx turns when these lowers if you get to a certain scale and size. On the other hand, capitalists, if you look these are practical in nature. In the past, they've always had capacity-lead demand, and that way we're building capacity based on certain demands and understanding from our customers of products which are in the pipeline. We do believe that overall, on an average basis, we are going to be able to manage our asset turn better that.
Just one follow-up. So sustainably, what kind of asset turn at a company level or segment-wise we should think of and breakup of CapEx in these three key subcategories? Thank you. All the best.
The asset turn continues to be at the similar range. I think today we have one of the benchmark asset turns in the industry, and we will continue to try and continue to manage the same ground.
Yeah. So anything between 2.2 to 2.5 is what we will consider a sustainable number of Capex turn.
The breakup of capex?
Maybe Sanjay, you can take the major CapEx of this is for our CSM exports, and some bit of it will also in coming year will be for Pharma, of course. But Sanjay, maybe you can share the breakup if you have.
Yeah. Broadly, in the 800 to 900, when you look at it, around 100 out could be in the PI, the pharma business, and the balance will be in the manufacturing business, in the ag chem business.
Okay. Thank you.
Thank you. Next question comes from the line of Himanshu Binani with Anand Rathi. Please go ahead.
Sir, thank you for taking my question. Again, on the guidance side, basically, we have been guiding for a 75% plus sort of growth in the pharma business. On a control level, we have been guiding for a single-digit sort of growth. I just wanted to have a sense in terms of how one should actually look into the CSM exports business growth. How should one actually work with the CSM exports business growth for FY2026?
When you look at Pharma, I mean, it's only 5% of our total business. So that will not move the needle for the whole organization. And the whole organization, as you already mentioned, that should be in the mid-single-digit growth plan for this financial year.
Got it, sir. Got it. Sir, any sense on the gross margin guidance?
Which is actually always given because it's always a function of product mix. Can you explain what you're thinking?
Yeah. I was saying that it will remain around 50 to 52% depending on the final product mix that we are able to achieve.
Got it, sir. Thank you.
For CSM, we have to also keep in mind that in the last three to four years, we have been growing at 20 to 25%. Obviously, the base is pretty high. As we have guided, for the next couple of quarters, while the global industry is navigating through this headwind, we certainly believe that from the second half of FY2026, we should be able to again catch up the growth momentum. That is how it will function.
Got it, sir. Thank you. That was helpful.
Thank you. Next question comes from the line of Saumya Anand with Anand & Associates. Please go ahead.
Hello. Thanks for the opportunity, sir. First question is on margins. In the domestic side, biological seems to be the next growth engine. Also, on the CSM side, your new products is laid up here around the 30%, as you mentioned. If you could just put some color on margins in both these businesses directionally compared to a biological versus existing branded in domestic and a new product versus the rest of the other portfolio in CSM, that should be helpful.
We do not do individual level, but I think broadly, as you would know, biological is a better margin. The ratio improves, I think, is a better play. For new products, again, it is a mixed bag. That is how it works.
Okay. Got it, sir. Sir, also when we are giving this FY2026 guidance, we have given it for broadly pharma, and then we have broken it down. What is the thought process for the 70% of the CSM business, which is not the new products one? What is the volume versus pricing thought there? I mean, would it be a volume that will kind of overtake pricing, and then that is how we are looking at it? What broad thoughts there?
That is not the right way. As I said, it is a balance between volume and price, but obviously, that is going to remain in mind with the industry as we have disclosed the mature products and some of the end products, or they will work with the market dynamics. That is typically, as I said, with this industry, as we can look for this industry, that volume or price continues to the function it works. Yeah.
Just to add to this, obviously, again, there is a portfolio of products. There are legacy products. There are new products, as we are seeing. Significant percentage of new products are getting added, and they are contributing in the growth. In fact, pricing also works like that. In terms of old products, where the input cost is improving, obviously, those improvements are passed through, and the price reduction happens and all that. As far as the new products, the products that are being launched, where the input cost has kind of sort of stable, there the pricing trend is different. On a blended basis, it is not so simple to tell you that pricing will be 5%-10% down, and volume will be 15% up or something. It is a blended situation here.
Sir, also the Ag Chem CapEx that we are referring to, any multipurpose plants that are expected to come this year, next year, or is it more of existing facilities we are putting in CapEx? How does it work?
As we said in the past, we are doing our Capex as we are doing multipurpose plants and the construction. We expect to commission one this year, maybe the next setting in the next year.
Simple, sir. Thank you.
Thank you. Speakers, can you please come a little more closer to the mic and speak? I'm converting the next. That is Sivansh Dubey with Dhruv Investment. Please go ahead.
Hello.
Yes.
Congratulations for a great results. Actually, I wanted to understand the working capital cycle. Would we expect it to remain in the same number of days?
Yeah, sir.
Go ahead. Go ahead, Sanjay.
Yeah. We have seen a slight reduction in our net working capital in this particular financial year, but inventory days have come down. For the year, you may consider the range we have. We are at around 73 odd days. The same thing could be taken around 55 to 70 days. Yeah.
Sure. Sure.
Can you also tell us about the new product development that is happening in the ag chem export with the Pyriproxyfen going off patent in, I think, mid of 2026 in USA?
What is that you're looking to? Yes, as we said, the new products over the last two years have been growing at a CAGR of 30%. And that's really where we are on that product portfolio.
Okay. Sure. Thank you so much.
Thank you. Next question comes from the line of S. Ramesh with Nirmal Bang Equities. Please go ahead.
Hello. Thank you for the follow-up. Sir, when you talk about the target for the bio business, would it all be focused on the domestic market, or does it also include some growth from the Plant Health Care and the subsidiary
Yeah. We are looking at biological as a place, primarily doing that domestics right now, but for the next five years, it will become a global play.
Okay. Okay. In the pharma business, in your slide 17, you mentioned about improving order book visibility. Is it possible to share the line of sight there in terms of discussions or inquiries? What is the thought process there?
Let me put it this way. Yes, we can give it at a high level. Obviously, we understand the confidentiality that goes with the customer name and product and areas that you are working in. Ramesh, maybe you would like to give some insights on this. You can look at what you are looking at about the broad line of development. Ramesh, over to you.
Yeah. Sure. We continue to build this pipeline. We have, over the course of the last year, added digits early development pipeline, meaning new projects and high single digits on the new development and high single digits also on late development. That is the pipeline moving forward. We also onboarded two new big pharma customers. The goal in FY2026 is to add another two or three so that we can have a sound base of big pharma that gives consistent revenue on biotechs that personally can give you better margins. That is sort of the play that we are focusing with.
Thank you very much. That's helpful.
Ramesh, are you done with the question?
Yeah. Thanks.
Thank you. Ladies and gentlemen, we have reached the end of the question and answer session. I would now like to hand the conference over to the management for closing comments.
Once again, thank you to all of you for participating in the PI Investor call. We look forward to positive plans going forward and continued support. Thank you.
Thank you. On behalf of PI Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.