By Nishtha Pandey
CNBC-TV18.com
Published Dec 13, 2023
The fear of competition from one of Rainbow Agro, one of the world's biggest agrochemical companies, was the reason for the worst single-day fall in the shares of PI Industries since March 2020.
It's a herbicide used to inhibits production of long-chain fatty acids in plants).
Pyroxasulfone contributes 35-38% to PI Industries' total revenue and around 55% to the exports in the custom synthesis manufacturing (CSM) segment. In FY23, the CSM business accounted for 78% of consolidated revenue and 83% of EBITDA. Pyroxasulfone is one of PI’s key molecules.
Meanwhile, PI Industries' Joint MD Rajnish Sarna told CNBC-TV18 that they don't see major impact on the company's outlook in the coming years due this development.
For this year, 18-20% growth guidance maintained, for next couple of years, guidance will be provided post Q3/ Q4 numbers, added Sarna.
Sarna told CNBC-TV18 that, Current market size for the Pyroxasulfone is $600-$700million and has potential to growth to multi-billion dollar market in coming years
According to Nuvama, an investment advisory and wealth management firm in Mumbai. This doesn't pose a risk for PI Industries, Immediate impact on profitability would be limited due to contract with Kumiai Chemical and limited erosion on molecule pricing for PI Industries, the report said.
Mumbai-based broking firm Motilal Oswal said that, Global demand for pyroxasulfone has been robust, as reported by Kumiai Chemicals (developer) in 2022, with 53% year-on-year growth. Pyroxasulfone was one of the key factors for PI’s strong performance over the years, shielding it from global headwinds in the agrochemical industry,”