(BSE: 532851 NSE: INSECTICID) Q1 FY2020 Earnings Presentation
Q1 FY2020 Highlights Revenue from Operations (Rs. Mn) EBITDA (Rs. Mn) Profit after Tax (Rs. Mn) Profit after Tax (Rs. Mn) 12.4% 13.6% 5.7% 3,584 631 359 340 3,189 556 10.7% 10.0% 17.6% 17.4% Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 PAT Margin (%) EBITDA Margin (%) Quarterly Highlights: • Revenue growth of 12.4% was primarily driven by sales of other branded products and B2B technical sales. However, Maharatna products sales were flat during the quarter and is expected to pick up in the coming quarter with the onset of the monsoon • Delivered strong EBITDA and Net Profit growth of 13.6% and 5.7% respectively Note: EBITDA does not include other income 2
Products Freshness Index Proven track record of successful new product launches exhibits IIL’s strong R&D capabilities and continues to provide competitive edge 535 478 70 Revenue from new product launches (Rs. Cr.) 420 66 89 131 299 148 90 11 13 9 221 33 10 38 45 34 172 41 89 30 66 65 60 69 192 172 166 44 155 131 103 44 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 New Products launched 5 5 3 2 5 5 8 during the year % of Revenue 7.1% 19.9% 22.9% 30.3% 37.9% 43.1% 44.9% from Operations 3
Management Commentary Commenting on the results, Mr. Rajesh Aggarwal, Managing Director, said: “FY 2020 started on a negative note with delay in sowing season due to 15-20 days postponement in monsoon. Rainfall for the season was also deficit by 16%, which further aggravated the decline in demand for agrochemicals. Despite subdued domestic environment, Insecticides India was able to deliver a resilient performance with growth in revenues and maintain profitability margins due to our strong product portfolio and greater market acceptability of products among farmers. I am pleased to report that the Company recorded revenue from operations of Rs. 358 crores in Q1 FY2020, representing a growth of 12.4% on Y-o-Y basis. The Company delivered EBITDA of Rs. 63 crores in Q1 FY2020 an increase of 13.6% year on year basis. EBITDA margins improved marginally to 17.6% as compared to 17.4% in Q1 FY2019. Net profit for the quarter was Rs. 36 crores, an increase of 5.7% with margins of 10%. Our R&D team continues its endeavor to develop innovative products and we have launched 3 new products during Q1 FY2020. Furthermore, I am delighted to report that we have received patent of our Maharatna product AIKIDO and expect it to contribute to our profitability going forward. Our total products approved under 9(3) category stands at 15. In the fiscal year FY2020, we plan to launch 10 new products augmenting our product portfolio. With the onset of monsoon at the end of Q1FY20, uptick in demand for agrochemicals is expected in the coming quarters and we are confident on meeting our full year targets. We continue to implement IIL strategic plan and generate value for all our stakeholder through new innovative product launches, improved product portfolio, expanding distribution networks and investing in R&D. ” 4
Growth Strategy Optimum Capital Structure and Phase out Generic Products Backward and Forward Integration Operational Efficiency • • • Gradual reduction in the sale of Moving on the strategic path of Strong cash flow generation • Generic products (high volume-low backward and forward integration Capex of Rs. 1 bn in next 2-3 years for • margin) for fiscal year is on expected Capitalize on the Make in India synthesis facilities in Gujarat and lines initiative Rajasthan • • Introduction of new products in the Will result in better margins across Maharatna category technicals and formulations R& D will results in New product Focussed Approach on Biologicals Exports launches • • • Focus on in-house R&D and Developed and commercialized VAM Working on registration in new international partners to launch new (Vaslcular Arbuscular Mycorrhiaze) countries with 100+ export agreements • • products Developed and commercialized soil Expanding in new geographies: • Launched 3 new products during Q1 energizer, Kayakalp Exporting to 20+ countries • FY2020 Development of 3-4 new biological Expand to 25+ countries by the end of • Expected 10 new products in full year products is in pipeline FY2020 FY2020 5
Business Overview Insecticides India - A Leading Agro Chemicals Manufacturing Company Engaged in the manufacturing and marketing of crop-protection products Rs. 358 Cr 60,000+ Four product categories: Insecticides, Herbicides, Fungicides, Q1 FY20 Sales Retail Outlets Biologicals and Plant Growth Regulators (PGRs) Distribution network of 375+ SKUs, 5,000+ distributors 21+ 100+ and 60,000+ retail networks Technical Products Formulation Products Total 15 registration approved under 9(3) 3 20+ 4 R&D centers – Developing a comprehensive range of Q1 FY2020 New product Maharatna Products agro chemical products launches* State-of-the-art manufacturing facilities in Chopanki (Rajasthan), Samba & 10 1,200+ Udhampur (Jammu & Kashmir) and Dahej (Gujarat) Full Year Target of New Employees Owner of the prestigious Tractor brand, highly popular among the farmers Product launches* Note: For fiscal year FY2019 6 *New products also include new Maharatna Products
Capabilities and Geographical Presence R & D Manufacturing • • NABL QC Labs 5 Formulations plant 01 02 • • In-house R&D Centre 2 Technical synthesis plants • • JV with OAT Agrio Co. 1 Biological manufacturing plant* Japan for dedicated R&D Centre Development Marketing 04 & Training 03 • Sale & market development • Branding • Emphasis on field activities • International tie ups and • Farmer awareness collaborations • Sales force training • Evolving media mix *Under toll arrangement 7
Leading Maharatna Brands PULSOR : Systemic fungicide with preventive and curative action; controls Rice Sheath Blight LETHAL : Organo-phosphorus group of insecticides; controls insects through contact, stomach and vapour action Specialist of weed control in paddy; in line with ‘Make in India’ GREEN LABEL : HAKAMA : Post-emergence selective herbicide; controls narrow leaf weeds across leaf crops XPLODE : Naturally derived insecticide; controls all Lepidopteran stages AIKIDO : Launched in technical collaboration with Nihon Nohyaku, Japan, providing complete protection from brown plant hoppers, white plant hoppers and leaf folder to paddy crop SOFIA : Broad spectrum fungicide which gives complete protection from various diseases in different crops MYCORAJA : Bio product equipped to promote healthy growth and greater nutrient absorption in a wide range of crops, oilseeds and cotton HIJACK : Non-selective systemic herbicide, control annual and perennial weeds FLITE : Broad spectrum non-systemic herbicides; effective against annual, perennial and broad leaf / grassy weeds Aggregate Installed Capacity 19,400 KLPA 75,750 MTPA 18,770 MTPA 13,800 MTPA Liquid Granules Powder Active Ingredient & Bulk 8 Note: Thimet and Nuvan production has been stopped from 31 Dec 2018, in compliance of Government Regulations New Product Launches
Research & Development State-of-the-art in house R&D centre established in 2005, augmented by product innovation R&D center, formulation R&D centre and biological R&D centre 6 Patents Received • Approved by DSIR, Ministry of Science and Technology • Working on new formulations and new combination products 22+ Patents Pending Formulation R&D Centre • Development of new generation formulations • Focus on cost reduction, customer friendly and environment safe products 59+ New Processes Developed Biological R&D Centre • Equipped with bio assay and product development facilities 60+ Scientists in R&D Centres • Looking forward to development of 3-4 new biological products Product invention R&D center: A unique initiative of product discovery in India by forming a JV with Japanese company, OAT Agrio Co. Ltd. • Equipped with the latest machines and equipment's like NMR, Lab set designed by Kewanee, USA • Lead by the internationally renowned scientists with more than 25 years of experience • One of its kind breeding centers, bio assay rooms and spray cabinets Technical collaboration with international partners for manufacturing and marketing innovative products: • AMVAC (USA), Momentive (USA), Nissan Chemical Corporation (Japan), Nihon Nohyaku (Japan) Medium Term: To launch latest Short Term : Launch new generic Long Term: Launch proprietary technology products through products going off-patent (Reverse discovery products (chemicals and international partners; launch new Engineering) biologicals) combination products 9
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