ET NowIn a chat with ET Now, Mayank Singhal, MD & CEO, PI Industries, shares his business outlook. Excerpts:
ET Now: How is the business looking like? The last time we spoke to you, the growth for the next three to four years seemed to be slated at around 20% to 25%. How is demand looking like and are you confident of maintaining this guidance as well?
Mayank Singhal: Looking at the way the agrochemical industry is progressing in India, in the next four to five years the Indian agrochem is looking to grow faster than anywhere else in the world and definitely to maintain this growth, new products are going to play a very critical role. They will be clearly driven by the ability of the farmer to enhance his qualitative and productive efficiencies.
ET Now: So specifically then for crop protection, how large is the industry at present and how do you see demand pick up say over the next two years?
Mayank Singhal: The Indian agrochem industry is expected to be between $2 billion and $2.5 billion, and is expected to double in the next five years.
ET Now: You have got a very interesting custom synthesis division. How important is this business and what is the growth prospect in the next two years?
Mayank Singhal: When we look at the custom synthesis business, it has been a very interesting development and the journey so far has been very good. We have been growing at a very aggressive pace. We are looking to invest over the next two to three years to further develop larger capacities and augment the existing capacities in order to look at the order book position and the trajectory of growth that we have going forward.
We estimate to be hitting between 20% and 25% the continued CAGR of growth in this contract custom synthesis business. The customer synthesis business for the Indian context is growing and will continue to grow aggressively at least in the next 5 to 10-year scenario.
ET Now: How big does the global picture or the non-Indian picture become for PI Industries, say, over five years?
Mayank Singhal: In the next five years, we will be in the top five players of this business in the world. Our focus here is to look at the business areas where technology chemistry has a plot to play and IP generation and protection is a key requirement which we will be supporting and building with our customers in the global scenario. So we definitely see ourselves to be in the forefront of this globally.
ET Now: Does operating leverage kick in for you and therefore, do you believe that the operational picture as well as the bottom line picture could be better than what you do on the top line over the course of the next three years?
Mayank Singhal: Yes, in the midterm situation, the operational leverage has shown its colours of the past and as we grow, we will be there. There is a balance between the investment and the operational leverage that will be coming up and over the next two to three years, we definitely would hope to see a better improvement in the margins and the bottom line.
ET Now: How is the business looking like? The last time we spoke to you, the growth for the next three to four years seemed to be slated at around 20% to 25%. How is demand looking like and are you confident of maintaining this guidance as well?
Mayank Singhal: Looking at the way the agrochemical industry is progressing in India, in the next four to five years the Indian agrochem is looking to grow faster than anywhere else in the world and definitely to maintain this growth, new products are going to play a very critical role. They will be clearly driven by the ability of the farmer to enhance his qualitative and productive efficiencies.
ET Now: So specifically then for crop protection, how large is the industry at present and how do you see demand pick up say over the next two years?
Mayank Singhal: The Indian agrochem industry is expected to be between $2 billion and $2.5 billion, and is expected to double in the next five years.
ET Now: You have got a very interesting custom synthesis division. How important is this business and what is the growth prospect in the next two years?
Mayank Singhal: When we look at the custom synthesis business, it has been a very interesting development and the journey so far has been very good. We have been growing at a very aggressive pace. We are looking to invest over the next two to three years to further develop larger capacities and augment the existing capacities in order to look at the order book position and the trajectory of growth that we have going forward.
We estimate to be hitting between 20% and 25% the continued CAGR of growth in this contract custom synthesis business. The customer synthesis business for the Indian context is growing and will continue to grow aggressively at least in the next 5 to 10-year scenario.
ET Now: How big does the global picture or the non-Indian picture become for PI Industries, say, over five years?
Mayank Singhal: In the next five years, we will be in the top five players of this business in the world. Our focus here is to look at the business areas where technology chemistry has a plot to play and IP generation and protection is a key requirement which we will be supporting and building with our customers in the global scenario. So we definitely see ourselves to be in the forefront of this globally.
ET Now: Does operating leverage kick in for you and therefore, do you believe that the operational picture as well as the bottom line picture could be better than what you do on the top line over the course of the next three years?
Mayank Singhal: Yes, in the midterm situation, the operational leverage has shown its colours of the past and as we grow, we will be there. There is a balance between the investment and the operational leverage that will be coming up and over the next two to three years, we definitely would hope to see a better improvement in the margins and the bottom line.
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