The new plants are being scaled up and will help drive growth in FY21. The pace of progress, however, would depend on labour and material availability, and the easing of travel restrictions. Moreover, the impact of the Covid-19 crisis on Q4 revenues and Ebitda was Rs 100 crore and Rs 22 crore, respectively, and PI expects to recoup the lost revenue in the current quarter as export orders remain intact.
Analysts also believe its 20 per cent growth guidance for FY21 looks achievable as the outlook of global customers remains robust with no indication of changes in the demand forecast. PI's order book at $1.5 billion remains strong and provides 3-5 years of revenue visibility. Notably, the order book improved by $100 million during Q4, and considering $90 million execution (revenue) in Q4, new orders wins stood at around $190 million, which is higher than the order wins seen in the last two quarters.
Further, PI’s strong relationship with Japanese customers could help, with Japanese firms looking to increase outsourcing from India. Commentary from key US customers also indicates a continued increase in volumes and should aid PI Industries
over the next 2-3 years, say analysts at Emkay Research, leading them to remain constructive on the business trajectory.
The domestic market is another positive element. It is likely to see healthy good growth with a normal monsoon forecast and strong sales. Analysts at Credit Suisse who have an outperform rating on the stock say that revenue momentum seems to be intact.