Multiple long-term triggers for PI Industries

But near-term global agrochemical demand is expected to be soft with recovery towards end of FY18

Cost savings from the joint venture with Japan’s agrochemical major Kumiai Chemical, higher agrochemicals demand and outsourcing is expected to keep PI Industries’ revenues and operating profit growth steady going ahead. PI on Thursday announced it would start a 50:50 joint venture with the Japanese partner to manufacture and distribute the flagship agrochem product Nominee Gold. The manufacture of the product, which accounts for 15-17% of revenues and profits of PI, will help save 25-30% of manufacturing and logistics costs as well as bring down the working capital intensity, believes Ritesh Gupta of Ambit Capital. The Kumiai JV is the