PIIND — earnings call
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Prepared remarks
Moderator · Conference Operator
Ladies and gentlemen, good day and welcome to the Q4 FY23 Earnings Conference Call of PI Industries Limited.
As a reminder, all participants' lines will be 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 "*" then "0" on your touch-tone phone.
I now hand the conference over to Mr. Nishid Solanki from CDR India.
Thank you and over to you, Mr. Solanki.
Nishid Solanki
Good afternoon, everyone and thank you for joining us on PI Industries’ Q4 & FY23
Moderator · Conference Operator
We will take our first question from the line of Aditya Jhawar from Investec.
Please go ahead.
Aditya Jhawar
My first question is that we acknowledge that inventory situation for generics is much more as compared to innovative product, but keeping that in backdrop, a volume decline of 3% in this quarter, if you can throw some light, are you seeing a change in production schedule of customers and are you also seeing that there is a commentary which is suggesting that deferment of procurement by farmers?
And in that backdrop, how is the volume momentum looking over the next few quarters?
Rajnish Sarna
Yes, as you explained, the backdrop of falling generic prices given the overall inventory in the channel is fine, but in case of the products that we operate in the early-stage molecules, we are not currently witnessing any kind of significant change in the demand scenario for us going forward.
As far as Q4 volume decline that you are referring to, this was in line with the annual plan because there were supplies scheduled of different products for different customers in Q1 to Q3, and accordingly as per the planned schedule, certain quantities were scheduled in Q4. Therefore, volume degrowth and the overall value in Q4 is absolutely in line with our plan.
In fact, overall FY23 , we have finally delivered better than what we had anticipated for PI Confidential this year for our exports, and this is obviously based on the surge in some of the existing and new products that we commercialised.
Going forward, in the coming quarters as we have also guided again, we are seeing a similar trend.
We are expecting 18% to 20% growth.
Yes, in certain quarters, this growth may be higher.
In certain quarters, again, basis the schedule, growth may be a little lower than 18% to 20%.
But overall, for the year FY24, we are very confident, and we have a very clear visibility of growing this business by close to 20%.
I hope this answers your question.
Aditya Jhawar
One bookkeeping question, sir.
When we look at the export database, that and what numbers PI has reported, there is clearly a difference of about $50 million.
In terms of revenue recognition, do we recognize the revenue once the shipment reaches, or it is based on the export?
Rajnish Sarna
This is the basis of different incoterms with different customers and different contracts with different customers.
Revenue recognition is in accordance with the accounting standards.
Aditya Jhawar
As a ballpark, which is the large part?
After it reaches or when it is shipped?
Rajnish Sarna
As I told you, this is according to the incoterms and contracts with different customers.
Obviously, it is not in front of me to tell you what percentage is to what kind of incoterms.
Aditya Jhawar
Final question is on margin if you can throw some light.
We saw sequential margin compression.
How should we think about margin going into FY24?
What are the key monitorable that we should look for?
Rajnish Sarna
Margins, again, if you see in Q4, there is a dip of close to 2.5% in gross margin and that is directly linked to the product mix.
As I said earlier, different quarters will have different product mix while in Q3 or Q2, the product mix was different.
Even the business composition was different.
In Q4, it was slightly different and that the gross margin dip is clearly reflecting the product mix change.
Besides, this being the last quarter of the year, there are also annual provisions and charges and there were also one-offs pertaining to some of the strategic initiatives that we were taking throughout the year.
That is even less than or around 1% or so.
I would consider that to be a one-off kind of case.
Going forward FY24, we are expecting to certainly improve our overall FY23 margins.
It would be difficult for me to quantify it, but yes, as the volumes, and values are expected to grow by 18% to 20% operating leverage benefits and some qualitative improvements in the product mix, will help further improve EBITDA margins going into FY24.
Aditya Jhawar
My final question is on CAPEX, sir.
How should we look at the number combined CAPEX for even the acquired assets in FY24 and FY25?
Rajnish Sarna
As we guided in the last quarter, we have carried over CAPEX of close to Rs.
300 odd crore.
We are also expecting to do another Rs.
600 odd crore CAPEX in the core business areas.
So overall, close to Rs.
850 crore to Rs.
900 crore of CAPEX we are seeing in the Ag-Chem business areas.
In case of pharma, we are still to get into the depth of assessing the current stage but, tentatively, around USD 10 million to Rs.
12 million is what we are projecting in FY24 and these pharma-related numbers will get firmed up once we take full control of these acquired entities.
Moderator · Conference Operator
We will take our next question from the line of Vivek Rajamani from Morgan Stanley.
Please go ahead.
PI Confidential
Vivek Rajamani
One clarification and one question from my side.
Just an extension to the previous participant's question on the margins.
You mentioned that the dip in this quarter was because of the product mix.
I just wanted to clarify; does this product mix typically happen in the Q4?
Because, in the last couple of years as well, the Q4 margins have gone a bit below the previous quarters.
So, just wanted to check if this is a Q4 phenomenon normally or it is just something that specifically happened in this year?
Rajnish Sarna
I will not say this is a very normal or a regular phenomenon, but yes, every year the scheduling of the product may undergo some change depending on the specific markets or customers or product-specific requirements, but yes, the product mix may vary year to year.
There is no fixed trend or there is no specific trend on this for a specific quarter.
Vivek Rajamani
The second question was more on CAPEX.
Even after the recent acquisition, we still have a lot of firepower with respect to your balance sheet and cash.
Just looking slightly beyond FY24 and FY25, could you just maybe provide some color with respect to your more medium-term ambitions with respect to how you are thinking of deploying this cash?
Rajnish Sarna
We have several strategic initiatives identified for the long-term growth of the organization and obviously this cash on the balance sheet will get deployed over the years as we progress on some of these initiatives.
These initiatives include Pharma bolt-ons, strengthening our product portfolio in the domestic market.
As you know in the past we have been evaluating, looking at, and are still looking at some of the opportunities of near-shoring and expanding our global manufacturing footprint going beyond India.
So, yes, there are several of these strategic objectives that we have clearly identified, and we are actively evaluating several inorganic opportunities to meet these objectives.
As we will eventually zero down on some of these opportunities, we will keep deploying the cash on the balance sheet.
Moderator · Conference Operator
We will take our next question from the line of Sabyasachi Mukerji from Bajaj Finserv AMC.
Please go ahead.
Sabyasachi Mukerji
My first question is a clarification on the growth guidance between the 18% to 20%.
This is excluding the pharma CDMO consolidation that will happen, or this is including that?
Rajnish Sarna
This is excluding the pharma consolidation.
Sabyasachi Mukerji
A follow up to that is, if I look at your FY23 revenues which have grown at 23% and the CSM exports basically have grown at 26%.
A large part of that also came from the benefit of currency depreciation.
What kind of volume growth if I may ask that you are looking at in FY24?
Rajnish Sarna
I would say it will be broadly the volume growth that we are indicating, 18% to 20%, because we are not expecting a significant price movement or currency movement from here.
So, yes, it is majorly coming from volume growth.
Sabyasachi Mukerji
Is there any skewness probably towards H1 or H2?
You are seeing depending on the client orders and all, will it be back ended, or it will be even out during this year?
Rajnish Sarna
There is no major skewness that we see here.
The domestic business is majorly in the first half, at least 60% of it.
When we talk about exports, it is evenly distributed in H1 and H2.
Sabyasachi Mukerji
Last question from my side is how should one look at the tax rates for FY24 and FY25?
PI Confidential
Manikantan V
For the current year, it is 14.9%; however, for the next year, it will be between 15% and 16%.
Moderator · Conference Operator
We will take our next question from the line of Rohit Nagraj from Centrum Broking.
Please go ahead.
Rohit Nagraj
Sir, the first question is on the pharma acquisition.
Is it possible to give broadly what kind of asset turns both Archimica and TRM have and what kind of incremental projects that they are working on?
Anil Jain
As Rajnish said in the initial discussions, we are in the phase of detailing it right now.
One transaction is closed; the other is under process right now.
So, it will take some more time for us to assess that part, I think.
Rohit Nagraj
The second question is particularly from the domestic market.
We have been hearing that there is a good amount of channel inventories in the system and an influx of China generics.
Will that also have an impact on our products based on the last one and half months of placements that we have done for the kharif season.
Prashant Hegde
Channel inventory we are maintaining as per our practice and strategy which we have been doing for the last few years.
I do not see any abnormality in the channel inventory for us.
Whatever growth we are forecasting for Q1, we are optimistic and positive about that.
Rajnish Sarna
Just to add to this, PI is in any case into specialized products and not so much into generics and me-too kind of products.
So, this steep fall in pricing or channel inventory that is being talked about is not much relevant for us.
Moderator · Conference Operator
We will take our next question from the line of Praful Kumar from Dymon Asia.
Please go ahead.
Praful Kumar
CAPEX number for next year.
What is that?
Rs.
1,000 crore is what you are saying?
Rajnish Sarna
Yes, around Rs.
900 crore.
Praful Kumar
Secondly, sir, in terms of your acquisition plans.
You said there are a few other opportunities that you are working on.
Broadly, I wanted to understand exactly what space, geographies, or alignment to the business they will be?
Rajnish Sarna
That's what I was explaining to the earlier participants.
For example, there are certain other technologies that we are evaluating to further strengthen our portfolios of marketing and distribution space.
There are opportunities that may also help us derisk our manufacturing concentration in India and have a more global manufacturing footprint near-shoring the markets and all.
There are also opportunities that may add more value and help us further strengthen our pharma business model, could be the bolt-ons to that.
So there are different opportunities and to meet our long-term objectives, we will be evaluating and suitably deploying our cash on the balance sheet in some of these areas.
Praful Kumar
Finally, Sir, on the asset turn that you incrementally deployed would be similar to what asset turn we have currently, or these are better opportunities?
Rajnish Sarna
This would surely be our objective, but as you can imagine that whenever you get into a new business area or new asset, you will have to make some development spend but after that initial period of integration, yes, this will be our objective to improve on our current financial metrics including asset turns, margins, asset returns, and all.
PI Confidential
Moderator · Conference Operator
We will take our next question from line of Ankur from Axis Capital.
Please go ahead.
Ankur
Sir, the first question on the CSM side.
If you can highlight the revenue contribution from let us, say the newer products which we would have launched over the last few years or the freshness index that you usually share in terms of the ramp-up?
Rajnish Sarna
New products commerciased over last 4-5years , 17% to 18% is the revenue coming from those products.Generally, that is the metric we look at.
Ankur
And if I am not wrong, last year this number was around 15% to 16%.
Rajnish Sarna
Yes, 16% to 17%.
Ankur
Sir, on the domestic side as well, while on an overall basis, there is a pricing and volumetric growth and you have mentioned an 8% odd growth for the full year, how has been the ramp-up there from the new products and the older ones?
And an allied question to that; is there any down-trading or any slowdown in terms of the uptick in sales?
Prashant Hegde
Overall, in terms of new products, it will continue to grow.
We do not see any challenge on the products which we have launched.
These are very specialized products and there is a requirement in the market.
That is why we strongly feel even this year as well, these products continue to do well.
Ankur
Just a follow up if I may.
The working capital reduction that we have seen, an impressive performance there, should we expect that to sustain going ahead as well, especially on the inventory side?
Rajnish Sarna
I would say, by taking some initiatives, we have significantly reduced the working capital particularly on the inventory side as you may know that for the last 1 to 1.5 years because of COVID and uncertainties in supply chain, shipping lines, etc., we were operating at higher inventory levels and working capital levels.
By taking these initiatives, a significant part of it we have already normalized in the last couple of quarters.
There is still some room and, on both sides, domestic as well as exports side, we will be working on it.
There is some scope for improvement, but yes, I would surely exercise caution to not extrapolate from the current levels of improvement.
Moderator · Conference Operator
We will take our next question from the line of Madhav Marda from Fidelity.
Please go ahead.
Madhav Marda
I just wanted to broadly understand when customers are asking for more near shoring of capacity, I would assume the cost of manufacturing or CAPEX cost would be a bit higher if you were to make the same product in Europe or in the US.
What is the key reason for having this near shoring?
Rajnish Sarna
Near-shoring may have many strategic advantages.
One is that some of the strategic projects they may want to have closer to their sites, closer to their markets, plus near- shoring also helps in overall supply chain management because there are other people and other suppliers also involved in a particular product.
Therefore, from the overall supply chain efficiency point of view, they find it better to have some of the suppliers near-shoring or near the markets or their setups.
Some of these reasons are there and obviously, as far as cost is concerned, from our point of view, we would always want to retain the cost advantage that we have been operating..
Madhav Marda
The second question from my side is when we look at our pipeline, you do mention the mix between agrochem and non-agrochem pipeline, but within the agrochem, for example, is the pipeline more to do with new patent that we are looking at or is it PI Confidential more intermediates?
If you could give us a broad sense in terms of how does the pipeline mix look like?
Rajnish Sarna
When I look at the two areas, it is more into the IP space whether it is new AIs or advanced intermediates.
That is where we play with a little more complex in technological-related products.
Madhav Marda
AIs and advanced intermediates are patented molecules, right?
Rajnish Sarna
A mix of both.
Moderator · Conference Operator
We will take our next question from the line of Sumant Kumar from Motilal Oswal.
Please go ahead.
Sumant Kumar
Sir, you have mentioned in the PPT the five innovative products we are going to launch in FY24. Can you talk about how many products are patented and any product is a very good product and in the high-opportunity segment?
Rajnish Sarna
As we explained to the earlier participant that most of the products that we commercialized in our exports are early-stage molecules, be it AI or be it intermediate.
And even in the domestic area, most of the brands that we introduced are specialty products. patent or no patent, but almost of them are specialty products and many of them are introduced in the Indian market for the first time
Sumant Kumar
I am asking for the domestic market, branded.
Rajnish Sarna
Yes, Domestic market and many are specialized products.
Sumant Kumar
Any product you want to highlight?
Likely to do well or high-opportunity area?
Rajnish Sarna
Most of these products whether it is Brofreya® or whether it is Sectin®.
Prashant you may want to elaborate on it.
Prashant Hegde
I don't want to get into a product very specifically, but I can say that these products we can do very well on wheat, we can do well on rice, we can do well on horticulture crops, and on top of it, we are adding few biological products and they are crop agnostic.
They can move into many other crops.
It is a mix of obviously biologicals as well as crop protection products.
Sumant Kumar
Any exceptional item or forex loss and gain in other expenses this quarter?
Manikantan V
The other expense in this quarter includes one-time forex impact due to repayment of ECB loan.
Sumant Kumar
Any one-time expense in other expenses this quarter?
Manikantan V
We have told that there are some one-time expenditures on account of the strategic initiatives as well as some usual year-end, provisions.
Sumant Kumar
Can you quantify that?
Manikantan V
Rs.
25 odd crore.
Sumant Kumar
That is not going to continue in the next quarter.
Rajnish Sarna
Yes, those are annual provisions, and the strategic initiatives are one-off.
PI Confidential
Moderator · Conference Operator
We will take our next question from the line of Sanjaya Satapathy from Ampersand Capital.
Please go ahead.
Sanjaya Satapathy
Sir, if you can just explain to us that your revenue growth is coming despite volume not growing as much, the price hikes, how much of it is because of the product mix change and how much of it is you taking price hike?
Rajnish Sarna
We don't have this much detail in front of us, but as we explained, close to 11% of the growth rin our exports is from volumes and rest has come from change of product mix, price, currency, because we have seen all these things moving and also overlapping.
It is very difficult to segregate price from product mix and then to currency.
Sanjaya Satapathy
The primary reason we are asking this is that nowadays mostly we are in a bit of a deflationary environment whereas your numbers are pointing out as if you have been taking a lot of price hikes.
So, I was just trying to understand whether it is actual price hike, or it is getting into some different product.
Rajnish Sarna
No, there’s no price hike in the current scenario.
If you talking about FY23, , yes, there was inflationary impact on the input material prices and as you know, our business model is that these inflationary impacts are passed through to the customer so that we can sustain the margins at which we are operating.
And that was the reason of the price increase.
Sanjaya Satapathy
And a related question is that in your guidance you were really looking at the next year, i.e., FY24 as more driven by volume growth than 18% to 20% growth rather than a price increase.
Rajnish Sarna
Yes, because we do not see this inflationary trend and the currency trend moving up from where we are today.
Sanjaya Satapathy
And at the same time, you are looking at better margins.
So, it must be because of better utilization and operating cost savings.
Rajnish Sarna
Yes, you are right.
Sanjaya Satapathy
Last thing I just wanted to understand, though you might have already explained that there is a step jump in CAPEX, and the Rs.
900 crore does not include the acquisitions, I assume.
This step jump partly is because of the delayed deferred CAPEX.
Is that right, sir?
Rajnish Sarna
Yes, we are carrying over close to Rs.
300 odd crore from FY23 as we explained earlier.
Sanjaya Satapathy
And the benefit of this new CAPEX will be realized in FY25 onwards?
Rajnish Sarna
Yes.
Moderator · Conference Operator
We will take our next question from the line of Vishnu Kumar from Spark Capital.
Please go ahead.
Vishnu Kumar
Just a connected question from the previous participant.
Are you currently seeing a deflationary trend starting to play out now?
Some RM material that is coming off now and which you would have to pass on to your customers at a later part of the year?
Rajnish Sarna
There is no common scenario here.
It varies from product to product.
As we were talking earlier, in the case of generics and in the case of many of these commodity PI Confidential chemicals, yes, there is a deflationary trend that we are witnessing.
But yes, there are still several of these raw materials, where the prices are quite stable; in a few cases, even increasing.
So, it is a very mixed scenario.
But yes, as per our business model, whenever we see this kind of downward price improvements we pass- through these benefits to our customers.
Vishnu Kumar
Earlier you used to say that a lot of efficiency gains we were bringing in terms of our manufacturing practices and hence we were able to increase revenue on volumes with a limited CAPEX.
Where are we now?
Have we maxed out that?
And if you could also talk about your Rs.
300 crore carry over plus Rs.
600 crore this year?
Also, next year, what kind of agrochem CAPEX you will be doing over the next 24 months, and how many new multipurpose plants if you can give some commentary on this?
Rajnish Sarna
Over the last 2 years, we have taken a lot of initiatives towards increasing the plant throughput, improving the capital efficiency, and this is all reflecting in asset turns.
I will not say that this magnitude of improvement will continue, but yes, there are a lot of opportunities still exit and our teams will keep working on further improving these efficiencies from here as well.
What was the second part of your question?
Vishnu Kumar
I just wanted to understand the nature of the CAPEX you are doing in Ag-Chem.
Close to Rs.
900 crore including the carryover of previous year and whatever you have some plans in terms of putting in next year.
What will be in the new multipurpose plants or what is the nature of CAPEX or how many new plants will be coming in?
Any idea on it?
Rajnish Sarna
A major part of this CAPEX is towards capacity expansion, and we are putting up two more multi-product plants.
The other part of this CAPEX is towards further automation,qualitative improvement of these sites, R&D, and other technological upgradation of these plants.
Vishnu Kumar
One clarification of a previous point you made.
Sir, you mentioned that there are some contracts where you will recognize this is on revenue recognition, more to Mr. Mani sir.
Are there any contracts where you have exported some volume, but it is still not reached to the customer?
Only when it reaches more of a CIF basis, then only you will consider as revenue?
Rajnish Sarna
As per the accounting standards, if there are contracts where you are producing exclusively for one customer and they also very specifically mention that you produce and keep this at the port or at some warehouse or something, sso, as per the accounting standards, those things are recognized accordingly.
That is what I am saying that each contract, each product, there are different incoterms, there are different inventory terms, and supply terms.
And accordingly, the revenue is recognized.
But all this is done as per the accounting standards.
Moderator · Conference Operator
We will take our next question from the line of Abhijit Akella from Kotak Securities.
Please go ahead.
Abhijit Akella
On the pharma acquisitions, would it be possible to share some rough guidance regarding the sort of EBITDA contribution they could make in FY24?
And one corollary to that; for TRM, we do not have the FY23 EBITDA.
In case you have it handy with you, could you please share that as well?
Rajnish Sarna
We are still in the process, Abhijit, and as I told you last time, we are still to close TRM transactions, and currently the FY23 numbers are not readily available with us.
PI Confidential But tentatively, our projections are anywhere between Rs.
550 crore to Rs.
600 crore kind of revenue.
Again, it will all depend on when we close and when will these numbers get consolidated with PI, and 15% to 18% of EBITDA on that.
Abhijit Akella
15% to 18% margin?
Okay.
I was under the impression that TRM was doing much better than that from the FY22 numbers.
Rajnish Sarna
Yes, but there will also be development spend in the initial years and consolidation.
We are also putting up our R&D site.
Mayank Singhal
We are in the process of building a unique business model and acquiring and taking it to the next level requires significant development spend.
Those investments will happen over the next couple of years whether it is in overheads or whether it is in structures or whether it is in building assets..
Abhijit Akella
The second thing was on the new product contribution.
The percentage of revenues from the new products has been stable at around 17% to 18% for some time in the past.
As we move into the next 3-4 years and try to bring down our product concentration within the agrochemical business away from the top molecule, how much confidence do we derive from the traction in the new molecules that we are moving in the right direction and what sort of improvement could we expect to see there?
Mayank Singhal
The fact of the case is this is a constant pipeline of things that keep coming.
There are peaks for each product, and at each different stage, different products take the lot.
And if you look at the cycle of 15-20 years because that is the lifecycle of a product;.
If you look at the history of the last 4-5 years, it is between that range of 16% to 18% because that is the typical scale-up time lifecycle for a new product.
Rajnish Sarna
And many of these new products that we have added to our portfolio, I would say both on the export side as well as on the domestic side, have significant potential.
On the domestic side, some of these products are multicrop-by-segment products, not specifically for a single crop or a pest segment.
They have a much larger market potential.
Same way, on the export side as well, some of these are either AIs or intemediates of very large global molecules.
So, yes, they have a very good market potential for growing big.
Abhijit Akella
Just one last quick thing.
Slide #16 of the presentation talks about working with some global advisors for integration and transformation for value creation initiatives.
If you could please shed some details on what direction are these initiatives towards, that would be helpful.
Mayank Singhal
This is as you have seen in the pharma initiatives, we would need to get the various expertise and that is what we are doing.
Rajnish Sarna
This will be towards the integration of these acquired entities and transforming them to build a differentiated model.
Moderator · Conference Operator
We will take our next question from the line of S Ramesh from Nirmal Bang Equities.
Please go ahead.
S Ramesh
In terms of the outlook for the next year if you are looking at the entire top line growing in volume, how would you expect to maintain margins at 24%?
Will there be some stability in margins per unit?
Because the reason I am asking is if there is some decline in prices compared to the base of last year to the extent that there is a decline in the top line, the overall trend will be down.
So, in terms of the margin outlook, can you give us some sense of what to expect?
PI Confidential
Rajnish Sarna
As explained earlier, we are expecting to improve on margins, and this will mainly be driven by operating leverage because we are expecting to grow 18% to 20% and there are also several initiatives that we are working on to further improve efficiencies around our manufacturing as well as on the marketing side.
S Ramesh
On the pharma acquisitions, is it possible to indicate what is the timeline you would expect to bring the ROCE in line with your current blended ROCE?
And can you give us some sense in terms of the development expenses you will have to incur both for development as well as integration cost, whatever broad estimates you can give?
Rajnish Sarna
The kind of acquisitions and the differentiated model that we are planning to build, it will take anywhere between 2.5 to 3 years for us to get to the level where it will start matching margin and return profile that we have in PI today.
Moderator · Conference Operator
We will take our last question from line of Rohan Gupta from Nuvama.
Please go ahead.
Rohan Gupta
Sir, in our exports market, last year, we had roughly volume growth of 11% while balance was currency and product mix change.
Sir, if you can just give some sense how much of this volume growth of 11% was primarily driven by pyroxasulfone the single product and how much would have been from the other products?
And the guidance which you are giving for the current year, 18% to 20%, is it on net revenues or it is driven by volume?
Rajnish Sarna
Firstly, as we have discussed in the past, we cannot share product-related growth and volume.
But the growth that we have seen in the last year is certainly widespread.
It does not come from a single product.
There are 4 new products we have commercialized in FY23. Apart from that, there are several existing products including the one that you are talking about which has scaled up.
This is about FY23 that we talk about.
Going forward, FY24, again, the growth that we are projecting is volume growth.
It is majorly coming from volume as I explained to the earlier participant.
Because, we are not expecting a significant change in terms of inflationary impact on the raw materials or currency to this 18% to 20% growth or major driver for this growth will be the volume scale-up.
And again, this will also be widespread; it is not going to be one odd product that will be driving this volume growth.
Rohan Gupta
Sir, the second question is about our cash flows.
We have roughly Rs.
3,200 crore cash on the balance sheet as of now.
I understand Rs.
700 crore will be paid for the acquisition.
We are still left with Rs.
2,500 crore.
You have an Rs.
900 crore CAPEX for FY24 that can be easily funded through the cash flows generated in the current year itself.
Now, Rs.
2,500 crore cash we are sitting on the balance sheet.
If you can give some guidelines on how soon we can deploy this cash in terms of further opportunities or any scaling up further CAPEX plan or inorganic growth?
If you can give some sense on that, sir?
Mayank Singhal
We are looking at opportunities as mentioned earlier and we'll continue to look but how soon is not a question that we can answer at the moment because it's got to be right opportunity which fits in and is in the strategic right path of PI's intent which is technology and scalability in the areas which we want to operate in and the right strategic fit.
Clearly, the Company has a focus on it, the leadership is driving as mentioned earlier.
Moderator · Conference Operator
Ladies and gentlemen, that was the last question.
I now hand the conference over to the management for closing comments.
PI Confidential
Mayank Singhal
Once again, thank you everybody for joining the call today.
I appreciate your time and your continued support and look forward to a great year ahead.
Thank you.
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