PI Industries Ltd (NSE: PIIND) Q3 2025 Earnings Call dated Feb. 07, 2025
Corporate Participants:
Mayank Singhal — Vice Chairman and Managing Director
Sanjay Agarwal — Group Chief Financial Officer
Rajnish Sarna — Joint Managing Director
Atul Kumar Gupta — Chief Executive Officer, CSM – AgChem
Analysts:
Nishid Solanki — Analyst
Rohit Nagraj — Analyst
Vivek Rajamani — Analyst
Siddhant Gadekar — Analyst
S. Ramesh — Analyst
Krishan Parwani — Analyst
Abhijit Akella — Analyst
Bhaskar Chakraborty — Analyst
Tejas Pradhan — Analyst
Sumayya — Analyst
Bharat Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the PI Industries Q3 FY ’25 Earnings Conference Call. As a reminder, all participant lines will remain in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchstone telephone. Please note that this conference is being recorded.
I now hand the conference over to Mr Nishit Solanki from CDR India. Thank you, and over to you, sir.
Nishid Solanki — Analyst
Thank you. Good afternoon, everyone, and thank you for joining us on PI Industries Q3 FY ’25 earnings conference call. Today, we are joined by senior members of the management team, including Mr Mayang Singhal, Executive Vice-Chairman and Managing Director; Mr Starna, Joint Managing Director; Mr Sanjay Agarwal, Group Chief Financial Officer; Dr Atul Gupta, CEO Exports; Mr Prashant, CEO of Domestic; and Dr Ramesh Ramas, Global CEO, PI Health Sciences.
We will begin the call with key perspectives from Mr Singhil. After that, we will have Mr Agarwal sharing his views on the company’s financial performance. Thereafter, the forum will be opened for question-and-answer session. Before we begin, I would like to underline that certain statements made on today’s conference call may be forward-looking in nature. A disclaimer to this effect has been included in the investor presentation shared with you earlier and also available on stock exchange website. I would now like to request Mr to share his perspectives with you. Thank you, and over to you, sir.
Mayank Singhal — Vice Chairman and Managing Director
Yes, thanks,. Thank you, and good afternoon to all of you. Welcome to our call to discuss PI’s 3rd-quarter and the nine-month performance for the year ’25. While I shall provide an update on the operating scenario, but I should also bring in the perspective on the strategy that we have embarked on in the mid to-long-term. Our approach of aligning with innovators and working molecules and brands has helped us deliver stable performance amidst challenging market dynamics. In order to ensure continued strong runway of performance, we are already actively engaged in multiple areas and that will underline our progress for the coming years. The global crop protection industry is passing-through a transition downturn. However, mid to long-term strength in the industry remains the same. Despite earlier challenges like supply-chain and fluctuation of input costs, the sector is adapting to the evolving landscape. Over the past few weeks, tax force and challenging geopolitical scenarios have been making headlines indicating shift in the global trade dynamics. Since the underlying demand is there, the tailwinds could impact Indian exports favorably. We continue to focus on innovation, sustainability and an efficient supply-chain to play a part in creating a stable, productive future for agriculture. Domestically, the generic segment has faced an ongoing pricing pressure and elevated inventory levels.
Looking ahead to the next season, market sentiments will be strongly influenced by investment trends with the sector and overall health of the rural economy. Directionally, for a pure agrochemical CSME distribution opportunity size of $50 billion to 20 billion of innovative products, we will be chasing 10x market opportunity over the next two decades. Addressing the multi-billion dollar market of pharma,, electronic chemicals and biologicals and new NCs through differentiated business models, focusing on these segments with innovation and building talent and distinct asset capabilities with the systematic regulatory support, we are on the journey to evolve from becoming an exciting company to life science company. During the year, thus far our performance has stood out and we continue to deliver to clients.
Trends during the period reflect strength of our business model and a disciplined execution underscoring profitable expansion even in mainly cement industry sentiments. Revenue growth for the exports was 9% on a high base, given volume gain and contribution from new products grew by 35% year-on-year. Biologicals, on the other hand, have added growth showing a 25-plus percent increase. Let me now cover the trends during the reported quarter. We saw consistent improvement in the exports backed by scale-up of new molecules and launched in the past couple of years.
The new products have delivered growth of more than 40% year-on-year. The new product growth is mitigating global headwinds over the past couple of years. They stood at six to seven molecules every year. The inquiries continue to come in with over 50% of those AgChem innovator products. They are stepped with consistent investments made towards now our chemistry platform, process technologies and various technology support deliveries. Moving on to our domestic business. From a good base to ’24 compared to the markets, has grown 5% year-on-year. This follows decisions taken to drive superior product mix with enhanced margins and maintain quality of revenue.
Our biological range has shown a strong growth of 25% over the prior year. Domestically, we have already introduced six brands, thus for this year, beyond these, we have a pipeline 20 plus products at different stages of valuation and registrations. Momentum launch new innovation products will continue each aim at delivering visible gain to the pharma with a better sustainable offering. Our range in culture and biologicals are growing well. We will remain determined to develop new varieties of brands backed by a stable capital base and entrenched relationship with the innovators. While our existing business model of sports and brands will continue to generate strong momentum in the foreseeable future, in the coming three to five years, we will see a noticeable work now coming from our new initiatives. Fresh cash generation and strong balance sheet are driving growth opportunities. I will elaborate on some of the key perspectives.
As you’re aware, we have invested and are continuing to invest to build a differentiated CRDMO offering in the pharma space with high-quality of talent being onboarded, assets being built to deliver the future processes to the benchmark of the best-in-class in the world and customer portfolios to be admired. In ’25, financial reflects the transition of a new business model and the development spend, which continues to happen over the next couple of years. We add to our global industry veterans to lead pharma — the pharma business, but they have begun to deliver the results supported by integrated process and newly refurbished assets in our location of, Hyderabad, Italy, and putting expansion in doing business developments in the US. Biologicals have been a passion for two decades. Our passion has always shown to build a new recent acquisition, we have acquired a leading technology platform in biologicals with patented proteins and peptide technology, a unique technology platform of proteins that are showing good results in the field.
In addition to the existing markets of the US, Mexico, Brazil and the UK. We will now be introducing these in these products into India as well, while we continue to expand our foothold in the existing markets. We’re also working on proprietary offering to work under. We have taken a critical step-in the development of first AI insects by and approval in the mids of Phase-3 trials from India in the resolute database product generation in different geographies by evaluations with partnerships. Harnessing our competencies on innovation and advanced technologies and capability scale products by delivering standout products sustainable different from what’s available in the market. With these new avenues with scale-up and existing strategies continue to as per our plan.
Moving on, I wish to underline our effort on the sustainability side and anchor for us. As we seek to scale our business across multiple pathways, we are aligning our processes and strategies to contain an adverse impact on the environment. For PI caring is one of our values for the Mother Earth is a way of life, far before ESG became a buzzword and companies being about their sustainable program. PI has become a trendsetter so-far in the sustainability programs in the chemical industry in many of its first to its credits. Fast-forward from now, we are proud to be ranking the top 3% LE educated companies and listedly exclude the S&P sustainability yearbook in 2024. We expect to retain our listing for the strategic S&P Global system year book for the second year ’25, which speaks volumes of our journey and our commitment to sustainability. New inquiries continue and setting up the stage for equally interesting our performance. At this stage, we request our Group CFO, Sanjay, to continue to discuss forward and thank you very much and over to you, Sanjay, to take it forward.
Sanjay Agarwal — Group Chief Financial Officer
Thank you, Mr Finger. Good afternoon, friends on the call today. I’ll summarize the company’s financial highlights for the 3rd-quarter ended 31st December 2024. Please note that all the comparisons are on a year-on-year basis and refer to the consolidated performance. So to share the performance highlights, I’m sure most of you would have already looked at those results during quarter three FY ’25, we have reported a revenue of INR19,008 million, a growth of 0.2% over the same-period of last year. In specific, agrochemicals, which accounts for 97%, 98% of our total revenue is up by 4% and EBITDA has a — has clocked flat growth. Business, exports is up 2% and within that a new product growth is 40% year-on-year. Our total domestic revenue has increased by 5% to INR2,806 million. Pharma has strong — has seen a strong sequential revenue growth of 55% to INR637 million in-quarter three of FY ’25. Our ETR has increased from 14.7% to 22.5, which impacted our net profit for this quarter.
Now let me also cover the YTM performance for FY ’25. Revenue is at INR61,907 million, a growth of 4% over the same-period of last year. Export revenue is up by 6% to INR51,306 million. Once again, there has been a growth of new products, which remain a key feature of our nine months result FY ’25. Chem exports is up by 9% and the new product growth is 35% year-on-year. Domestic branded revenue grew by 3% and within that the volume is up by 8%. If you look at EBITDA, without a pharma business, while the pharma business is going to build build-out mode, that our EBITDA has increased by 17% to INR18,716 million. Profit overall has increased by 1% to INR13,000 to INR97 million. We expect the ETR for FY ’25 to be in the range of 22% to 23%. Our cash flows from operating activities increased by 8% to INR12,482 million. This was due to good EBITDA growth and efficient working capital management. The trade working capital in terms of days of sales has improved from 80 days to 68 days. Similarly, better inventory management has led to reduction in inventory days from 59 days to 46. Million. On-balance sheet, our balance sheet has further strengthened during the year. Our net-worth increased to INR98,660 million and we have a healthy net cash balance of INR42,091 million.
That concludes my opening commentary. I’ll now request the moderator to open the forum for Q&A. Thank you.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Rohit Naguraj from B&K Securities. Please go-ahead.
Rohit Nagraj
Thanks for the opportunity. Sir, first question is on the pharma products that we were developing under PI Andrella before the acquisition of the new business — pharma business. What is the progress of that? Have we seen probably scaling up those products which were under our R&D into the new facilities? And a concurrent question on the pharma business is, where are we currently in terms of the margin profile both on gross and EBITDA level? How are we forcing it in future given that at least the top-line seems to be increasing over the last two, 3/4? Thank you.
Operator
Sorry, sir, we have lost the line of the management. Please stay connected.
Rajnish Sarna
Am I audible?
Operator
Yes, sir. Rajni, sir, you are audible as the boardroom does not disconnected.
Rajnish Sarna
Okay. So shall I continue to respond to the gentlemen?
Operator
Yes, please go-ahead.
Rajnish Sarna
Okay. So thank you for your question. So the first part of question about the products, earlier products, yes, during the COVID time, we have been working on, we also developed certain intermediates and supplied certain products and those were specific to COVID period. Besides also some of the development projects we were working, which are now part of the overall development pipeline that we have in pharma. So that is continuing. Regarding your second part of your questions on margins, as you have seen, I mean, the margins have been maintained. If we see quarter three last year versus this quarter, it is broadly around 48% 50% kind of margin level. But as we are now building and developing more of CRDMO projects, particularly CRO and early CDMO kind of projects, there the margins will obviously over a period of time improve and you will see that reflecting in our financials in next one and a half year.
Rohit Nagraj
Sure. That is helpful. Sir, second question is on the three areas that we’ve mentioned and sir also mentioned into pharma CRDMO, electronic chemicals, biologicals. So currently, where are we in terms of maybe revenue or probably number of products into each of these areas? And maybe three years down the line, how are we looking to shape up these verticals in terms of the overall contribution to our revenues and the number of products under each category? Thank you.
Rajnish Sarna
Yeah. So I mean, both these areas as our Vice-Chairman explained in his speech, both these areas are new business ventures, pharma as well as the biologicals, particularly the new technology platforms that we are talking, which we acquired. We very strongly believe that we are on the right scale of path. We are also transitioning, as you will appreciate from the first while business model to the new CRDMO kind of a business model. So there is also certain portfolio changes in products and new product inquiries, new type of projects are being added, new customer — customers are being added in pharma. We believe that once this revenue and the business model is stabilized in, say, next one year or so, we will be, you know, growing by 20% to 25% year-on-year in coming period. And this is what the visibility that we have in pharma for next two to three years. Same way in acquired business of biological. So currently, we already have a reasonable sized biological business in our domestic markets, okay.
On-top of it, the business that we have acquired is currently at low-base, but we are expecting to build-on in the markets that the business is operating, the registrations that we have got. And this growth is certainly going to be reasonably high. We are already expecting more than 25%, 30% kind of growth next year and thereon, we’ll strongly be building that business. So all-in all, both these businesses, although the scales are low, but we are anticipating and expecting aggressive growth in coming two to three years’ time and building on there.
Mayank Singhal
So if I may answer and add a little bit to this, PI is obviously looking to get a differentiated business model in these places. These do take investments, time and strategies to be shaped and then to embed the customers. So typically, this business has a long-term Jacob approach and that is as you would probably see that the PI way and we’ve been able to do that, whether it’s in the ad business in the early 2000s or whether discount from manufacturing post 2008, 2010 where we’ve been building and stabilizing and putting things till they shape into the next. That’s the stage these two initiatives are today and I’m pretty confident more experienced in the past, these curves could be even sharper if not better.
Rohit Nagraj
Thank you so much and all the best.
Operator
Thank you. The next question comes from the line of Vivek Rajamani from Morgan Stanley. Please go-ahead.
Vivek Rajamani
Hi, sir. Thank you for the presentation. One clarification and one question from my end. Firstly, with respect to these new products, which have grown 40% on a year-on-year basis. Would it be fair to say that they make-up about 20% of the exports portfolio like you’ve mentioned in the past or has that number changed materially this quarter?
Mayank Singhal
Yes, it’s broadly in a similar range.
Vivek Rajamani
Sure. So still about 20-odd percent of the export portfolio. Got it. The second question, sir, was on margins. If you — if you look at the EBITDA margins that you’ve reported on a consol basis, we’ve seen them improve pretty strongly. We’ve gone from about 22% to 24% to about 26% last year. And for the nine months, we are obviously close to about 28%, so congratulations on that. I just wanted to better understand this margin uplift, which clearly looks to be structural. Is this a function of your new products operating at a significantly better margin profile? Or is there something that you’ve gotten on your cost side that’s driving this very sustainable increase? I know you’ve mentioned in the past that the margin profile is a function of the product mix, which can change every quarter. But just some color on the gains that we’ve made and the outlook going-forward will be super helpful. Thank you.
Mayank Singhal
We would say simply you got the right last April right, which is exactly the product mix and there are multiple moving parts and differently, different quarters, things move around income. And so I think the guidance that we give, we keep that yes.
Vivek Rajamani
Sir I’ll then rejoin the queue. Thank you so much and all the best.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question please press star and 1 one. The next question comes from the line of Siddharth from Equirus. Please go-ahead.
Siddhant Gadekar
Hi, sir. So first on the diamide that we are targeting to launch, can you give us some color that in terms of field trials, where are we today or when do we plan to launch this product? And given that we are looking to launch it in India, can our India business materially double from here in the next two, three years?
Mayank Singhal
Well, as you know, innovation comes as a very — it’s a different challenging space, but giving you specific answers, we are pretty confident and happy with what we see as the product. One, with our experience of what we know of the field and we see the potential of that in India and globally, particularly driven by the sustainability launch and our capability to ramp-up new products and ideas into the market. Today, where we stand, we are in the third phase of trials and data generation. We believe in the year or so, we should be looking to get to look at the regulatory framework and maybe a couple of years down the road, we should be in the market. And I think once we see what the product does and perform, that gives the confidence to take it to the next phase, typically for any new launch, any new AI that we’ve done historically. And I’m sure we have this strong capability of tough few decades of taking new innovations to the market and scaling them to create an impact is an experience which we are very confident will be more embedded, if not more aggressively embedded into our own product, at least in the geographies that we operate and for the geographies we should look at partnership approaches.
Siddhant Gadekar
Got it. Sir, secondly, in terms of the impact of — on the margins because of the plant healthcare, can you just quantify that number?
Mayank Singhal
Sorry.
Sanjay Agarwal
Only with plant healthcare, it’s a small-business at this point of time. So the numbers won’t materially change.
Mayank Singhal
Okay. Thank you.
Sanjay Agarwal
As we mentioned, to be very clear, this technology platform, which is very promising to us. We see some very interesting data and facts globally. And based on that, we are in the process of again knowing the business as you know and the regulatory framework, it does take time and to get them into the market and development. So we will be investing aggressively in that timeframe globally over the next couple of years more to really take this product and scale this platform, the products which are there and use the platforms to create new technologies and new products. Yeah.
Siddhant Gadekar
Thank you.
Operator
Thank you. The next question comes from the line of S. Ramesh from Nirmal Bang. Please go-ahead.
S. Ramesh
Thank you and good evening. So when you talk about this 20% to 25% growth in pharmaceuticals CDMO in the next two to three years. What are the kind of revenues will need to breakeven at EBITDA and what is the timeline to achieve, say critical mass maybe in the range of INR500 crores to INR70 crores, when do you see that materialize?
Mayank Singhal
Yeah. I definitely say if you see the numbers, I would give it a couple of years or more. As you know, the pharma development space or the unique spaces that we’re going to operate have a longer gestation period. So some of this could become very quick short also could multiply and some of them because we are looking at a differentiated model here and some of this, but I would give it a quick two-year run before we get to those spaces.
S. Ramesh
Okay. Under Biologicals, is it possible to share what is the current share of biologicals in your domestic portfolio? And what is the kind of overall market potential you see in India and exports?
Mayank Singhal
Well, biologicals, I think if I was to look at the Indian market, we are pretty well-poised. We are in the top three players. We have an addressive at least 15% of our revenue portfolio coming from biologicals. And did this growth path, we definitely want to make some impact to become one of the large biological players in the country and some of these technologies could have a cross-over to other geographies, while the technology that we bought could have across into the geography. So our strategy to become a dominant player in this space is on its path and we have a very good execution capability as demonstrated by the fact that over the last two to three years, is the growth rate in the challenging domestic market yet we continue to show that with more than over 20 plus percent of growth. So giving us the confidence that we have gotten a machinery which knows how to work and we are now going to look at putting more portfolios of products and delivering that.
Rajnish Sarna
It would also be important, gentlemen to add here that biologicals as a segment globally is growing much faster than chemicals, okay. From current maybe $10 bill $11 billion, it is expected to maybe $20 billion in next three, four years, okay. And therefore, we believe that we are positioned very well, both in India as well as now with the acquisition of this technology platform and not only technology platform, but there are also products which are registered in the most developed market globally, we believe that we’ll be very much part of this growth journey that we are expecting in biological space globally.
S. Ramesh
Okay. So if I may squeeze in one last question. In your slide, you mentioned that you expect a recovery in the second-half of this calendar year in the custom synthesis exports. So in terms of the basic agrochem cycle, do you think that it is synchronize with the potential recovery in the distribution of agrochemicals or will happen with a lag? And once you see this recovery in the second-half, do you see the volume growth revive in the traditional some exports in agrochemicals?
Mayank Singhal
Yes, sure. I mean, when you look at — if you look at-the-market recover, for sure, the benefits of that would pan-out for everybody and we should be also well-poised to do that. And it’s expected we are looking at the global situation as you must-have understood that, yes, India, the season has not gone well. So this year we have looked at also the challenges globally the one of the biggest markets in Brazil where there has been drought challenges. So — but it’s expected next half year things will pick-up and I think the industry will start tuning up.
S. Ramesh
Thank you very much and wish you all the best you.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and 1. The next question comes from the line of Krishan Parwani from JM Financial. Please go-ahead.
Krishan Parwani
Yes, hi, sir. Thank you for taking my question. So firstly on agri CSM business, how does your order book look like in CY ’25? As in would that be able to give you a double-digit growth in, let’s say, CY ’25 or FY ’26 sorry?
Rajnish Sarna
Yeah. So the growth of the business doesn’t come only from order book by the way, because there are annual businesses and there are long-term businesses. So yes, our long-term businesses give some visibility, but also the annual businesses are also part of the growth for any year for this period. As Mayank explained to the earlier participants, the business or the global industry is in transitory mode. There are a lot of you know trade war, tariffs, other challenges that industry is facing as of now. So maybe in next one or two quarters, we will have more clarity in terms of overall growth for ’26 or ’27. But as of now, we are reasonably maintaining, sustaining the volumes that we are operating today.
Krishan Parwani
No question, secondly, has there been any progress on our own AI and? I mean, where are we in that? I mean, is that registration started or which phase are we at?
Rajnish Sarna
So as we explained in our communication presentation as well as opening commentary, there are certain leads progressing very well in the development phase. One of the leads is even more advanced and we are also developing the registration packages for — particularly for India and few other countries and that is progressing very well. Maybe Mayang, you may want to add something else?
Mayank Singhal
No. So as I mentioned earlier, that’s the stage, as you rightly mentioned, we at that stage, and we’re pretty confident how this looks. So this will be a really what I want to create a mark in what PI has been able to do globally in the innovation space.
Krishan Parwani
Got it. And just two small clarifications from my side. On pharma, you’ve incurred a close to INR100 crores capex in nine months FY ’25. So when do you expect that to start contributing to the top-line or margins if that was for the backward integration or for some other capex?
Mayank Singhal
No, so let me answer this to you. We are not in the business of backward or forward integration here to be very straight. We are in the business of creating offerings and capabilities in the various facets of the value chain from discovery to markets, from back with strong science and technological capabilities. For each of these, we are making investments both in hardware and software. Software typically being human capital and skills, hardware being assets. And the other critical part of this integrated piece is a framework, which has a gestation period to give a value-created — value-created offering to the customer and those investments are in that line and that will take a couple of years to shape up to meet the requirements from a regulatory standpoint to deliver value to the customer.
Krishan Parwani
Got it. And the last bit was on the plant healthcare. I don’t know whether you mentioned earlier, but how much was the contribution to the top-line this quarter and to the margins, if you can?
Sanjay Agarwal
I mean, as we mentioned, this is more of a development platform for us. And for now, the revenues are not any significant at the top-level?
Krishan Parwani
Got it, sir. Thank you for patiently answering my question, sir. Wish you all the best.
Sanjay Agarwal
Thank you.
Operator
Thank you. The next question comes from the line of Abhijit Akela from Kotak Securities. Please go-ahead.
Abhijit Akella
Good afternoon and thank you very much. My first question is with regard to the depreciation and amortization expense, which seems to have increased quite significantly quarter-on-quarter. If you could please just help us understand the reasons for that and whether this is a good run-rate to trend of going-forward.
Sanjay Agarwal
So yes, the incremental depreciation charge is primarily because of the amortization of the intangible, which has been added during this particular quarter on account of the PHC or the biologicals business, which we have acquired. So it will be fair for you to take this run-rate going-forward.
Abhijit Akella
Thank you. The second question is just with regard to, I guess, number-one, if it’s possible to share the order book number as it stands at this point in time. And just to clarify whether the revenue growth guidance, which has been mentioned as single-digits in the presentation, last quarter it was high-single-digits. So should we interpret that has been reduced a little bit or how should we interpret that?
Rajnish Sarna
So what we maintain — we maintain the growth guidance what we had indicated last quarter, okay, because we are also currently in the rubby season and also the overall you know even exports scenario that we have explained earlier, whether it will be mid-teen or high-teens that we will figure out. But yes, we maintain the growth guidance and this is what we are targeting as of now. Your other part of question about the order book, so yeah, I mean, it’s around the same level around INR1.4 billion, okay. That’s the response to your two questions.
Abhijit Akella
Thank you. Thank you, sir. Just to clarify, you meant mid-single digits or high-single-digits, right? I think just now you mentioned mid-teens or high-teens. So I just wanted to clarify.
Sanjay Agarwal
My 5.1 inches of 5.12 inches, that’s the single-digit came to night and you are right.
Abhijit Akella
Okay, okay. Thank you sir. Just one last thing from my side. On the pharma business, last-time we had mentioned that we see full-year revenues in the range of INR250 crores to INR275 crores. You know, do we — I think we’ve done something like INR130 in the first-nine months. So how does that target sort of look at this point in time?
Sanjay Agarwal
Yeah, we are targeting the same number that we indicated last-time. Yes.
Rajnish Sarna
Around the same range.
Abhijit Akella
Got it. And sorry, just one really last thing from my side, if I may. Just on the pharma business, any sense you could share provide in terms of new customer additions, a number of new customers or some metrics around that would be would be great. Thank you so much.
Rajnish Sarna
Yeah. So we continue to gain traction in we — from a new customer addition perspective, in Q3, we’ve had between five to 10 new customers. I’ll just leave it there, but the quality of the customers has been excellent. But we’re also focusing on the quality of the projects, right. There are certain projects that would give a good long-term sustainable revenue. That’s where the focus has been. So we hope that those projects continue to go through that clinical pipeline and lead to good results for the investors
Operator
Abhijit does that answer your question? Since there is no response, we move on to our next question, which is from the line of Baskar Chakrati from Jefferies. Please go-ahead.
Bhaskar Chakraborty
Thank you very much. Could you give us some color on the CDMO orders secured with the new program that you have mentioned in the presentation? How long a duration that is and would that drive growth in FY ’26
Mayank Singhal
What will be — CDMO, what?
Sanjay Agarwal
Yeah, I can. So this is for a new development project. It’s actually a life science application. It’s an interesting and exciting program for us. And the — it’s a commercial product. The product is now being tested. And so if it works out, it certainly has — since it’s only commercial application, it has long-term — a good long-term potential. What we are waiting for is to see the successfulness of the application, which we would know in the next six months or so.
Rajnish Sarna
And the one-line disclaimer put rather than going to details of the projects because of the nature of the business and confidentiality and the stage gates of various approvals, the risk factors better. But that’s why we would say yes. But what is exciting to us, we have three interesting projects and they’re looking in a near mature gate approach, yeah.
Bhaskar Chakraborty
So is this like a pilot right now that can convert into a long-term order in the next six months?
Sanjay Agarwal
Yeah. This is an end application that we have supplied the material in for and the market is being tested with that application. It’s a life sciences application.
Bhaskar Chakraborty
Okay, okay. Okay. Thank you very much.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and 1 one. The next question comes from the line of Rohit Nagraj from B&K Securities. Please go-ahead.
Rohit Nagraj
Thanks for the follow-up. One question on the next year’s guidance and obviously, we’ll not be giving the it right now, but we have said in the CSM part that demand will start improving in second-half of fiscal ’25. So is it safe to assume that FY ’26 also would be in transition and given that the legacy business is still having some kind of volatility, is that the right way to look at it?
Rajnish Sarna
Well, I would surely suggest that we should wait for another quarter and probably post the 4th-quarter, we will be in a better position to kind of give a very clear visibility of next year because as we explained in the earlier part that there are a lot of you know moving balls right now, global situation, tariff situation, also the industry inventory scenario, et-cetera. But we believe that in next three, four months’ time we would have a better visibility and understanding.
Rohit Nagraj
Sure. Second question again on the pharma CDMO front. So in terms of customer profile, are these the large innovators we are working with or the mid and small-sized innovators? And usually from an approval perspective, does it take relatively longer and lesser time as compared to maybe working with the large innovators? Thank you.
Mayank Singhal
So the way I would put that answer, there is a strategy which we have, which is probably not only customer-centric cities, one-piece, but also technology platform and application. So it’s a combination of that. So I would not talk about large or small and our — and our offerings for what value-added services to which customer we could play an influential role. And that’s really where I would leave that because customer strategy is dependent on how best we are fit it. And some we fit-in the and some we fit the smaller, so we fit-in the startup area. Yeah
Rohit Nagraj
Sure. That’s helpful. Thanks a lot and all the best.
Operator
Thank you. The next question comes from the line of Tejas Pradhan from Citi. Please go-ahead.
Tejas Pradhan
Yeah. Thanks for the opportunity. On the side of the portfolio in, say, electronic chemicals, which you have mentioned, is there any like while you have mentioned about the inquiries, is there any material contribution to revenues from that side so-far? Any color you can provide on your plans?
Rajnish Sarna
We have actually already commercialized three, four projects over last two years. So this is not some inquiry level or R&D level kind of development we are talking here in electronic chemicals. We are already working with some of these global players in Japan and in Europe, in this space, already commercialized three, four projects this year, current year also we have commercialized few projects and there is also a very healthy pipeline in the R&D where we are doing evaluation and scaling up those projects. Maybe Atul, you may want to add something?
Atul Kumar Gupta
Yeah. Yeah. So pharma — sorry, the electroly chemical business is facing very well. This year, so-far we have commercialized two molecules. And in the next quarter, there are another two molecules in pipeline which we intend to commercialize. And out-of-the total inquiries, we have received more than 60% inquiries are from electromechemicals. So there is a good tractions for the future as well. What we see as a new deal going-forward in the electromechanical segment.
Rajnish Sarna
Okay. And the advantage here is that apart from having access to the global players with whom we are already doing this business for last few years, there is also a huge opportunity that is coming in India in next couple of years as the semiconductor projects are going-live in India as well. So yeah, I mean, I can say that we are very well-positioned here in this segment of specialty chemicals.
Tejas Pradhan
Sure, sure. And just to sort of add more, like what could be the percentage contribution ballpark currently and maybe three, four years down the line, how much could this increase to?
Rajnish Sarna
Well, it would be a difficult question to answer right now because as Atul mentioned, there are already three, four projects commercialized and several of them are at-scale up stage. So maybe in next one year time we will have a very clear picture that how much percentage or what kind of value it can add to growing CSM business here.
Tejas Pradhan
Sure. Thanks a lot. Thank you.
Operator
The next question comes from the line of Somaya from Avendus Spark. Please go-ahead.
Sumayya
The first question is on the space. So based on your interactions, generally for the industry, we are seeing the inventory and pricing trends. So is it still in a bit of a decline mode or the decline is now stopped and then things are kind of stabilized. How are you seeing it for the industry, sir? Pricing and inventory
Sanjay Agarwal
Well, it’s a mixed scenario, I would say, because we are talking to almost all major innovators in this industry. So it’s a mixed scenario and also very specific to our products. So for certain markets, there is improvement, inventory levels have come to normalization, also the general demand scenario is there. So yeah, I mean there — those geographies are more recovered than few others. It’s specific to certain products. Yes, certain products still are facing the inventory destocking kind of a situation. But mostly this belongs to the generic category of products. Yeah, so I mean it is very difficult to kind of summarize the overall situation in this — in this — at this stage. But yeah, it’s a mixed scenario and that’s why most of them expect that maybe in next two quarters time, we should be — overall industry should be in a better position than what it is today. But yes, compared to last one year or last 1.5 years, two years, yes, it is certainly better-positioned.
Sumayya
Got it, sir. Sir, second question is on the capex for the business. So how are we seeing it for the next one year? What is our capex plan? And also any MPPs that we will be bringing off
Sanjay Agarwal
MPP?
Mayank Singhal
So if you could just speak a little louder, we couldn’t hear.
Sumayya
Sorry, sir. Sorry my question — I hope I’m audible now. My question was on capex for the Hem. Any new plants or any new plant that we plan to bring online in next couple of?
Mayank Singhal
Yeah. So if I may answer that the capex which we had given the forecast, in the coming year, we are going to build the two new multi-product plant to meet the future requirement and the visibility of the business what we have. So that’s the one major capex investment which is going to come.
Sumayya
Sir, any capex number that we can give as a guidance for the next year
Sanjay Agarwal
We had already indicated —
Sumayya
Sorry, sir, I was not able to follow.
Sanjay Agarwal
I said it would be between INR8,000 INR2,000 crores. Got it, sir. Thank you.
Operator
Thank you. The next question comes from the line of Bharat Shah from Ask Investment Managers. Please go-ahead.
Bharat Shah
Yeah, hi. The couple of acquisitions that we made. What is our assessment? Have they leaved up to our expectations fallen behind or where-is the — what is the assessment?
Mayank Singhal
So as I would answer I think they are completely in-line to what we thought we want to do with that. But the business models, as you know, PI takes time to really — these are very small and three points into these businesses and we’ve not been silly about our capital allocation either from multiple of points, but we’ve got into certain areas by one biting some regulatory timelines to enhance our growth plans and investing in these to really differentiate these models. And I would say, yes, the investment sides, the technologies and the capability that we walk our margin. Now we’re building and adding to those capabilities and I do believe we will see some good outcomes in the next two to three years where the draft will start-up showing some marks of moving up. So I would say from our internal perspective, we’re excited about them and we see a good future for them in the future.
Bharat Shah
But, are we saying it will take two to three more years before we see meaningful results?
Mayank Singhal
Yeah, sure. I mean definitely you can see that things change for sure as you see. But some of these, I mean today, if you look at the Technology platform, if you want to bring these products and bring to scale, there’s a regulatory framework, there’s a developing framework, it takes time and it’s like any molecule, right, as an example, there’s a platform and then investing in R&D to create a pipeline. You take the PIHS, CRDMO, entering the customers, building the capabilities, the early-stage development, building and getting into the approval cycle numbers it takes time. And these are the long gestation periods with smart and also as you move into them and you create your own uniqueness and capabilities, it takes — you build your moat. And let me remind for those, I mean, you know very well that it took about 10, 12 years of hard work before CSM started showing colors, but that’s not what we’re expecting here. This is much faster than what — and therefore, we went in the increase in acquisition point by those timelines.
Rajnish Sarna
Yeah sure. Sure. Just wanted to add, that when we are saying two, three years, it is more from the point-of-view of them making any meaningful contribution to overall PI, which is a $1 billion-plus kind of a business today, okay? Because of the scale of these investment, acquisition investments, is the reason that you know we are saying that it will take maybe a few more years to be able to contribute meaningfully. It is also important by to articulate here that if you see PI’s progression over, I’ll not say few quarters or few years, but over the last 20 years, we have been able to scale-up and build business and grow more than 20% to 25% and CAGR growth over two decades by building new businesses and verticals and all this, okay? And all this was achieved by chasing only agrochemicals, okay, mostly, okay. And now for next two decades to sustain that momentum, we have created these growth engines with relatively smaller investments and therefore, they are also currently operating both these initiatives like pharma and biologicals at a relatively smaller-scale. But the kind of growth opportunities that are there both in pharma, maybe another $100 billion kind of addressable market that will be chasing and same way in biologicals, which will be more than $20 billion to $25 billion kind of addressable market that we’ll be chasing. We strongly believe that by adding these two or three verticals, we will be in a much better position to sustain the kind of growth story that we have delivered over the last two decades.
Mayank Singhal
And if I may add here that given that we have gentled this over the next three years we built, we have strong balance sheet to level to scale-up and extra next value addition in these spaces the foundations are like value.
Bharat Shah
Now on that, there is absolutely no doubt we have patiently nurtured capabilities and strength in the business to develop and grow the business in a significant way for the long period of time. Bit-by-bit by bit each product we have nurtured and wrote it to the shape in size where the business stands today. I was only speaking from the perspective whether the acquisitions made with our your strategy is really the capital allocation objectives or you have any I mean supposing these opportunity were to come all over again today, what would you do differently than what you did when you acquired it?
Mayank Singhal
What would I do different than what will be acquired?
Bharat Shah
Supposing the same thing were to be acquired today, if the offer was on-table today. And instead of when we did when we acquired them, what would we do differently about the same offer if it were to be on the table?
Mayank Singhal
So by the PNCD offer is today only is not too long. So I think I would still go for it and buy that bullet without a question. The offer that we have on the pharma, I think still said, yes, it’s a good bite. And we still buy that bullet because what we are building, we are very excited about it. What we’ve been able to build-on the software aspects, whether it’s in talent, global offering capabilities, customer mindsets and also certainly intrins parts of the assets that we’ve been shaping up to deliver the value is something completely different and these take time, both, one, not only to build and deliver, I can show you the best car, but eventually to make the car win, we need to train the driver and that’s also got the car and the driver. Now we need the crowd which takes a bit of while after even a few races, then only when the crowd follows you. That’s really where we are today in the step.
Bharat Shah
Sure. I appreciate it. And one last bit. I could join only a little later, so I might have possibly missed this. But did you offer any view about the upcoming year, ’25, ’26 in terms of likely growth that the total business and the box will witness this.
Atul Kumar Gupta
Rajnish, do you want to take that.
Rajnish Sarna
Yeah, so we responded to these questions that we will wait for another three, four months-to be able to give a very clear guideline on that.
Bharat Shah
Okay. So that will come after the March quarter.
Rajnish Sarna
Yes. Yes. Yes.
Bharat Shah
It’s because there is currently haziness or there are things that you need to get your hands around before you want to put out that?
Rajnish Sarna
Well, this is not so much so pertinent to only us or particularly for us, but this is about the haziness that we are seeing today almost everywhere post this recent regime change that lot of trade wars are currently being anticipated and therefore a lot of moving balls, I would say and that is what most of these large customers are expecting to settle down in next few months’ time and therefore, everyone will be in a better position to kind of predict rather than speculating it at this.
Bharat Shah
Sure. I appreciate it. Thank you and all the very best. All the best.
Operator
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for their closing comments.
Mayank Singhal
Yes, thank you, everybody for your kind support and we very much look-forward to your continued support and all the best to our team to continue to put this great effort. Thank you.
Bharat Shah
Thank you. On behalf of PI Industries, that concludes this conference. Thank you for joining us and you may now disconnect your lines.