Insecticides (India) announced Q3FY22 results: Q3FY22 vs Q3FY21: Revenue from Operations has marginally grown from Rs.2991.74 Mn in Q3 FY21 to Rs.3137.78 Mn in Q3 FY22 mainly due to better product mix. The EBITDA has increased by 23.27% from Rs.150.73 Mn in Q3 FY21 to Rs.185.81 Mn in Q3 FY22 mainly due to efficient inventory management. EBITDA margins has increased to 5.92% in Q3 FY22 from 5.04% in Q3 FY21. Net profit has increased by 32.83% from Rs.59.82 Mn in Q3 FY21 to Rs.79.46 in Q3 FY22 PAT margins have increased to 2.63% in Q3 FY22 from 2.06% in Q3 FY21. The Exports have increased to 15% in Q3 FY22 from 5% in Q3 FY21. 9MFY22 vs 9MFY21: Revenue from Operation has recorded a growth of 5.27% from Rs.11,646.21 Mn in 9M FY21 to Rs.12,259.78 Mn in 9M FY22 mainly driven by better product mix, focusing on Maharatna Products. The EBITDA has increased by 11.30% from Rs.1220.29 Mn in 9M FY21 to Rs.1358.23 Mn in 9M FY22 and a gain in the EBITDA margins from 10.48% in 9M FY21 to 11.08% in 9M FY22. Net profit stood at Rs.848.80 Mn in 9M FY22, compared to Rs.721.17 Mn in 9M FY21 recorded a growth of 17.70% The Exports have increased to 8% in 9M FY22 from 4% in 9M FY21 Commenting on the performance, Mr. Rajesh Aggarwal, Managing Director, said: “The third quarter has been relatively subdued quarter for the entire agro-chemical industry, due to the building threat of Covid-19, unseasonal rains in parts of our country and damp market conditions. The scaling up of new products already launched in previous quarters has been hampered by barriers in working with the farmers on the grass root level, due to the looming third wave threat of Omicron variant of Covid-19. However, IIL has delivered a consistent performance in terms of Revenue and Sales volume in Q3 FY22, focussing on exports as per its growth plan for the current fiscal year. The Company has recorded revenue from operations of Rs.3137.78 Mn in Q3 FY22, and Rs.12259.78 Mn on a 9M basis, representing a growth of 5.27% on a 9M basis. Revenue growth was driven by better product mix focusing on Maharatna Products. The Maharatna category of branded products grew to 45.94% from Rs.747.23 Mn in Q3 FY21 to Rs.839.91 Mn in Q3 FY22. The exports grew by a whopping 224.17% and institutional sales grew by 6.10% on a quarterly basis. We are happy to state that we have achieved an export sale of Rs 1036.23 MN on a 9M basis in FY22 vs our total export turnover of Rs 610 MN on a full year basis of FY21. The Company delivered EBITDA of Rs.185.81 Mn in Q3 FY22, with margins of 5.92%. Net profit for the quarter was Rs.79.46 Mn, with margins of 2.63%. We are also in course of adding new molecules and products to our products portfolio, some of which are to replace off-patented products. The company is also working on new products to replace any of its current products which have a possibility of a ban in future. We expect to launch at least 2 new products in Q4 of FY22, in addition to new launches already done during the fiscal year. The company also expects to derive benefits from its backward integration capabilities at Dahej, to reduce dependency on Chinese raw materials in the long run. Currently, IIL is trying to streamline production by maintaining higher levels of inventory and using judicious purchase strategies. With the government’s focus on Bio Chemicals and increasing Exports, in tune with its MakeIn-India movement, IIL plans to capitalize on this opportunity on the back of its backward integration initiatives and its strong research & development program. The company foresees a huge potential for its products in the international market and therefore, we were able to surpass our export target, for FY22, of achieving more than Rs.1000 Mn in 9M ended 31st December, 2021 itself. On a long-term basis, the management foresees exports contributing to at-least 20% of the top line on an overall basis. This target is planned to be achieved by manufacturing newly identified molecules, especially for the international market and advent into new geographies like East & West Europe, Africa, & CIS & NAFTA markets particularly Canada Thus, IIL has been constantly delivering an intrinsic growth by strengthening its capacities & generating new revenues to replace revenues of banned products. The Management remains committed to continue its efforts to scale up sustainable revenues and take all other strategic measures so as to increase the long-term value for all its stakeholders.” Result PDF
Highlights: Q2 FY22 v/s Q2 FY21: Revenue from Operations has marginally degrown from Rs. 4558.48 Mn in Q2 FY21 to Rs. 4439.39 Mn in Q2 FY22 mainly due to decline in Sale of Branded products because of unfavourable monsoons in this year. The EBITDA increased by 11.12% from Rs. 577.49 Mn in Q2 FY 21 to Rs. 641.69 Mn in Q2 FY22 mainly due to the change in product mix where there was an increase in share of Maharatna products sale thereby giving higher margins. EBITDA margins increased to 14.45% in Q2 FY22 from 12.67% in Q2 FY21. Net profit increased by 0.87% from Rs. 414.01 Mn in Q2 FY21 to Rs. 417.62 in Q2 FY22 PAT margins increased to 9.53% in Q2 FY22 from 9.08% in Q2 FY21. H1 FY22 v/s H1 FY21: Revenue from Operation recorded a growth by 5.40% from Rs. 8654.47 Mn in H1 FY21 to Rs. 9122 Mn in H1 FY22 mainly driven by an increase in sale of B2B products and Exports. The EBITDA increased by 9.63% from Rs. 1069.56 Mn in H1 FY21 to Rs. 1172.51 Mn in H1 FY22 and a gain in the EBITDA margins from 12.36% in H1 FY21 to 12.85% in H1 FY22. Net profit stood at Rs. 764.75 Mn in H1 FY22, compared to Rs. 654.82 Mn in H1 FY21 recorded a growth of 16.79% Total Fixed Asset grew by 10.34% from Rs. 3228.33 Mn in H1 FY21 to Rs. 3562.26 Mn in H1 FY22 Current Asset stood at Rs. 10445.40 Mn in H1 FY22, compared to Rs. 9593.51 Mn in H1 FY21 Long term borrowing stood at Rs. 18.61 Mn in H1 FY22, compared to Rs. 14.42 Mn in H1 FY21 and Short-term borrowing at Rs. 1908.90 Mn in H1 FY22, compared to Rs. 559.77 Mn in H1 FY21 Inventory Holding Period has increased to 153 days in H1 FY 22 compared to 135 days in H1 FY 21 increased inventory holding of raw materials by the management due to production issues in China. Working Capital Cycle has increased to 160 days in H1 FY 22 compared to 115 days in H1 FY 21 due to increased inventory holding. Debt Equity ratio has increased marginally, to 0.23 in H1 FY 22 compared to 0.07 in H1 FY 21 Commenting on the performance, Mr. Rajesh Aggarwal, Managing Director, said: “The second quarter witnessed several challenges due to the 2nd wave of Covid-19 and flood like situation in various states due to heavy rainfall. The Pandemic has resulted in extended lockdowns, slowing down of economic activity and several logistic issues. The Agro sector was slightly less impacted and currently we are seeing demand picking up with easing of restrictions and relaxations in lockdown at several places. The Company has recorded revenue from operations of Rs. 4439 Mn in Q2 FY22, and Rs. 9122 Mn on a half yearly basis, representing a growth of 5.40% on a half yearly basis. Revenue growth was driven by all segments except Branded Products (other than Maharatna category). The Maharatna category of branded products grew by 17% from Rs 1793.5 Mn in Q2 FY21 to Rs 2099 Mn in Q2 FY22. The revenue of branded products other than the Maharatna Range fell by 32% from Rs 1559.3 Mn in Q2 FY21 to Rs. 1062 Mn in Q2 FY22 mainly due to change in product mix, increased focus on Maharatna range of products under the tail cutting policy of the company. The exports grew by 28.76% and institutional sales grew by 3% on a quarterly basis. We are happy to state that we have achieved an export sale of Rs 563 MN on a half yearly basis in FY22 vs our total export turnover of Rs 610 MN on a full year basis of FY 21. The Company delivered EBITDA of Rs. 641.69 Mn in Q2 FY21, with margins of 14.45%. Net profit for the quarter was Rs. 423 Mn, with margins of 9.53%. The company also received registration under section 9 (3) of the Indian Patent Act for two technical in the current quarter. The growth was minutely impacted due to lockdowns and slowing of economic activity. Despite challenges, we were successful in maintaining an adequate level of engagements with our customers and other stakeholders via digital channels. We are also trying to remedy our dependency on China for raw materials; firstly by planning to launch Japanese products and technicals through our in-licensing partners. Secondly, keeping in mind our government’s Make-In-India policy and economies of backward integration we have invested substantially in enabling our plants, like Dahej & Rajasthan; to produce the raw materials & technicals required for our products. We are proud to state that we produce around 20 technicals which are used in 30-40 of our formulations and plan to increase this number in the coming years. We also plan to ultimately export our in-house technicals so as to become less reliant on imports and increase our export share. Lastly, the management was able to successfully envisage the issue of price increase in raw materials due to production abruptions in China and hasthus, put in a plan to mitigate it by increasing level of inventory holding to ensure uninterrupted production in our plants for the fiscal year 21-22. The company further plans to remedy this by increasing the production of premium selling products where the increase in raw material prices is relatively moderate. We do not anticipate any adverse impact of this event on our margins, rather we foresee a positive growth in our margins during FY22. Thus, the issue of raw material price increase is backed by a well-planned pricing and production strategy to ensure that the plans & targets for FY 22 are met and further help us to reduce our dependency on China. With the re-opening of the economy post the second national lockdown, we expect lot of new product registrations to be finalized in the upcoming quarters. Our exports of Rs. 177.52 MN in Q2 FY 2022, and Rs 563.83 MN till end of H1 FY 22, is in line with our export target of 1000 MN export sales for FY 22. Management team remains committed to continue its efforts in launching many new products this year, improve profitability of the business through expanding its backward integration capabilities and take all other strategic measures so as to increase the longterm value for all its stakeholders.” Result PDF