PI Industries shares fall 9% after cutting FY25 revenue forecast

Shares of PI Industries experienced a significant decline on November 14, dropping as much as 9% after the company announced a sharp reduction in its FY25 revenue growth forecast. The revised guidance, now set to high single-digit growth, marks the second time this fiscal year that the company has lowered its revenue expectations. For investors looking to invest in stocks, this announcement raises important questions about the stability of PI Industries' growth in the face of global industry challenges.

PI Industries lowers revenue growth guidance

At 09.43 AM on November 14, PI Industries shares were trading at ₹4,119.25 on the National Stock Exchange (NSE). The agrochemical giant, which initially projected an 18-20% revenue growth for FY25, had already reduced it once to 15%. However, with the ongoing global headwinds in the agrochemical sector, the company is now forecasting a more modest high single-digit growth.

Mayank Singhal, Vice Chairman and Managing Director of PI Industries attributed the revision to strong headwinds in the global agrochemical market. He stated that the negative growth across the sector is likely to persist, impacting the company's revenue targets for the near future. These global challenges, including high inventory levels in export markets and ongoing de-stocking pressures in domestic markets, have significantly affected the company's outlook.

Operational challenges and impact on earnings

Despite the lowered revenue guidance, PI Industries posted a 5.8% year-on-year growth in its net profit, reaching ₹508.2 crore, up from ₹480.5 crore last year. Revenue also grew by 5%, totalling ₹2,221 crore for the quarter. However, the operational performance showed signs of strain, with the company reporting a 5% drop in domestic revenue. The pharma segment, in particular, faced challenges, with revenue shrinking from ₹72 crore to ₹41 crore and EBIT losses widening.

For those looking to invest in stocks, the company's performance highlights both the potential and the risks associated with PI Industries, given the current market conditions.

Key takeaways

• PI Industries' stock dropped 9% after it revised its FY25 revenue guidance down to high single-digit growth, a significant cut from its earlier forecast of 15%.
• Ongoing global challenges in the agrochemical industry, including inventory issues and pricing pressure, have impacted the company's performance.
• Despite the challenges, PI Industries showed a 5.8% growth in net profit, but domestic market conditions remain weak.
• Investors looking to invest in stocks in this sector should stay informed about global market trends and company-specific factors that could impact future earnings.

For investors, understanding these dynamics is crucial when deciding whether to invest in stocks like PI Industries.