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PI Industries

The first of the stocks that I invested in as follows :

11/10/13 : Bought 300 shares for ₹168.

The current market price of PI Industries today is ₹993.

Overall profit to date : 491% on total investment

Company : The company is in the business of agricultural chemicals, with a long history of being in the business. You can read a lot more from the web on the nature of company’s business.

My rationale : There has been a steady decline in the agricultural work force over the years, though the consumption has been growing at a massive pace. To maintain the yield, the quality of agricultural  chemicals becomes important and hence, the company producing them.

Financials : I follow the following steps to focus on the company financials :

  • Revenues : Same as your monthly or annual salary.

YoY (year on year/annual) Revenue growth : 2014/2015/2016/2017 has been 39%/22%/7%/8%

The revenue for this purpose is the total revenue for the company.

Takeaway : For me this reflect a consistent revenue growth from the company. Due to a larger revenue base in past year, the % growth has been lower. Though, the costs and profits reflect a strong growth as shared below.

  • Total costs for the company : Similar to your expenses (rent, Uber, OLA, petrol, food etc) to earn the salary.

Cost growth 2014/2015/2016/2017 has been 33%/20%/6%/5%.

Takeaway : If you compare this with the revenue growth above, you will notice that the company is able to produce a higher revenue with a lower cost of production. This means that the company’s operations are efficient and not totally variable with the revenue increase.

  • Profit/Loss before Tax : Similar to your savings at the end of year (Annual Savings = Annual salary – Annual expenses). A difference is that you pay the tax before the monthly salary reaches you.

Growth 2014/2015/2016/2017 has been 80%/37%/15%/25%

Takeaway : The profit before tax is the pure gross profits (before tax), that the company earned for the entire year of operations. The company has been able to grow its profits every year for the last 4 years.

Stocks

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