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STRICTLY PRIVATE AND CONFIDENTIAL
Corporate Presentation
Insecticides (India) Limited
1
Disclaimer
This presentation has been prepared by Insecticides (India) Limited (the “Company”) solely for your information and may not be taken away, distributed, reproduced, or redistributed or passed on directly or indirectly to any other person, whether within or outside your organization or firm, or published in whole or in part, for any purpose by recipients directly or indirectly to any other person. By accessing this presentation, you agree to be bound by the following restrictions and to maintain absolute confidentiality regarding the information disclosed in these materials. The Company may alter, modify or otherwise change in any manner the contents of this presentation, without obligation to notify any persons of such change or changes. This presentation and its contents are confidential and may not be copied, published, reproduced or disseminated in any manner.
This presentation may contain certain forward looking statements based on the currently held beliefs and assumptions of the management of the Company which are expressed in good faith and in their opinion, reasonable. These statements include descriptions regarding the intent, belief or current expectations of the Company or its directors and officers with respect to the results of operations and financial condition of the Company. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in such forward-looking statements as a result of various factors and assumptions which the Company believes to be reasonable in light of its operating experience in recent years. Many factors could cause the actual results, performances, or achievements of the Company to be materially different from any future results, performances, or achievements. Significant factors that could make a difference to the Company’s operations include, but are not reasonable to, domestic and international economic conditions, changes in government regulations, tax regime and other statutes. The Company does not undertake to revise any forward-looking statement that may be made from time to time by or on behalf of the Company.
This presentation contains certain supplemental measures of performance and liquidity that are not required by or presented in accordance with Indian GAAP, and should not be considered an alternative to profit, operating revenue or any other performance measures derived in accordance with Indian GAAP or an alternative to cash flow from operations as a measure of liquidity of the Company.
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This presentation and its contents are not and should not be construed as a prospectus or an offer document, including as defined under the Companies Act, 2013, to the extent notified and in force) or an offer document under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended. This presentation is not for publication or distribution or release in any country where such distribution may lead to a breach of any law or regulatory requirement. The information contained herein does not constitute or form part of an offer, or solicitation of an offer to purchase or subscribe, for securities for sale. The distribution of this presentation in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about and observe any such restrictions. None of the Company’s securities may be offered or sold in the United States without registration under the U.S. Securities Act of 1933, as amended, except pursuant to an exemption from registration therefrom.
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2
Table of Contents
Company Overview Section I. 03
Key Corporate Highlights Section II. 08
Growth Strategy and Key Value Creation Drivers Section III. 18
Financial Performance Section IV. 20
Annexure 22
Section I.
Company Overview
4
63.6% of revenue(2) 23.9% of
revenue(2)
10.2% of
revenue(2)
2.4% of
revenue(2) Thimet, Nuvan, Victor, Monocil, Xplode, Lethal, Nayak, Sharp, Indan 4g, Super fighter, Aflatoon, Bravo, Titan, Metacil
Hakama, Hijack, Selector, Strike, Flite 71
Pulsor, Force 11, Care, Himil, Prism
Milstim, Mycoraja, Prime gold, Olympic
Insecticides (India) Limited (IIL) is amongst the top 10 Indian agrochemical companies having almost 7% market share of the Indian domestic agrochemical market(1)
It has a pan-India presence, with integrated operations across R&D, manufacturing, marketing and distribution of a wide range of formulations, technicals & household pesticides
IIL caters to the insecticide, herbicide, fungicide & PGRs segment; has a varied portfolio of 99 formulations,18 technicals & 350+ SKUs
The company has a portfolio of strong & successful brands and believe to have a proven track record of turning around acquired off-shelf brands into market leaders
Navratnas (Top 9 brands) & Super 11 brands (next top 11 brands) contributed 53% and 14% respectively of the total branded formulation sales for Dec-14(2)
IIL has 5 Formulations & 2 Technicals facilities at Chopanki (Rajasthan), Samba (J&K), Udhampur (J&K) and Dahej (Gujarat)
It has International tie-ups with AMVAC and Nissan Chemicals (through Nagarjuna Agrichem Ltd.), for brand licensing and marketing rights
The company has an in-house R&D facility, accredited by NABL & recognised by DSIR with 14 scientists. Also, IIL has set up an R&D centre through a JV with OAT Agrio, Japan for a new R&D centre
IIL has a Pan-India distribution network of 5,000+ distributors and 29 depots and branches
Company Overview
Source: (1) CRISIL report dated 21 April, 2015; (2) Dec-14 refers to gross revenue numbers corresponding to nine months ended 31st Dec 2014. PGR – Plant Growth Regulator; SKU – Stock Keeping Units; AMVAC – American Vanguard Corporation NABL: National Accreditation Board for Testing and Calibration Laboratories; DSIR: Department of Science and Industrial Research
Branded formulations and Institutional sales accounted for 73% and 27% of the Dec-14 sales. Technicals, Bulk Formulations & Packaging accounted for 45.5%, 38.6% & 15.9% of the Institutional sales(2)
Insecticides Herbicides Fungicides PGR
Branded & Bulk Formulations
Manufacturing : 198
Import : NA
Manufacturing : 41
Import : 18
Export: 42 Export: 49
Technicals
Total Registrations: 348 (as at 31st Dec, 2014)
Additionally, 4 registrations for export, 12 registrations for formulations and 3 registrations for active ingredients are pending with the CIB
5
Key Milestones
1996
Incorporated as a private limited company
2001
2002
2003
2004
2005
2006
2007 2011
Converted into a public limited company
Started operations by commissioning formulation plant in Chopanki (Rajasthan)
Acquired 21 leading brands of Montari Industries Ltd (Ranbaxy Group company)
Commissioned second formulation plant in Samba (Jammu)
Set up R&D Laboratory in Chopanki
Granted ISO 9001-2008 certification for Chopanki
IPO & listing at NSE/BSE Technical plant commenced operations
in Chopanki Expansion of Formulations completed in
Samba
2012
2014
2015
Acquired Monocil brand from NOCIL Ltd Two new formulation plants - Dahej and
Udhampur - commence operations Acquired the exclusive rights to sell
the Thimet brand in India from American Vanguard Corporation, USA
Started producing Diafenthiuron Commencement of Packaging &
Distribution of Hakama
Launched R&D centre with OAT Agrio, Japan
Launched Nuvan, Hakama and Pulsor in collaboration with AMVAC and Nissan
Entered into JV with OAT Agrio, Japan for research and invention of new agricultural chemicals
Technical plant in Dahej commences operations
2008
Granted OHSAS 18001 certification
6
Pan-India Presence: Manufacturing Facilities at Strategic Locations & Wide Distribution Network
Note: Map not to scale
OAT JV
Dahej Formulation Plant Dahej Technical Plant
7
Shareholding Pattern & Stock Price Performance
# Promoter and Promoter Group Shares % stake
1 Hari Chand Aggarwal 615,600 4.85
2 Hari Chand Aggarwal HUF 996,000 7.85
3 Kritika Aggarwal 75,000 0.59
4 Nikunj Aggarwal 750,000 5.91
5 Pushpa Aggarwal 1,434,600 11.31
6 Rajesh Aggarwal 3,528,600 27.82
7 Rajesh Aggarwal HUF 1,302,000 10.27
8 Sanskar Aggarwal 601,200 4.74
9 ISEC Organics Ltd 169,700 1.34
Total 9,472,700 74.69
# Institutional Investors Shares % stake
1 LIC 6,75,000 5.32
2 Fidelity Northstar Fund
3,75,000 2.96
3 HDFC Small & Midcap Fund
1,65,458 1.30
Total 12,15,458 9.58
Source: BSE India, Bloomberg; Shareholding pattern is as on 31st March, 2015; Stock price chart is ex-bonus. Bonus in the ratio of 1:2 * Revenue from operations; **Networth is adjusted for Unamortised Share issue expenses and Preliminary expenditure not w/off
125
200
275
350
425
500
575
650
Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15
52 week H/L: 612/174 Mcap: Rs.975 cr Enterprise Value: 1,391cr Equity shares : 1,90,24,449
IIL stock is up by 191% from 01st Jan, 2014 till 20th April, 2015
Rs.512.5
17 April record date for bonus issue
The company has announced a bonus of 1:2 shares for record date of 17th April, 2015
Particulars Dec-14 Mar-14 Mar-13 Mar-12
Revenue* 8,034 8,641 6,167 5,218
Operational EBITDA
975 818 693 564
PAT 487 399 353 330
EPS 38.37 31.49 27.85 26.03
EBITDA Margin
12.1% 9.5% 11.2% 10.8%
Networth** 2,429 2,086 1,785
Revenue CAGR: 29% EBITDA CAGR: 20% CAGR: FY12-FY14
Financials (In INR mn, except per share data)
Promoter, 74.69%
FII, 4.13%
DII, 6.63%
Bodies Corporate,
3.71%
Public, 10.84%
INR
Revenue y-o-y: 10% PAT y-o-y: 40% Y-O-Y: Dec 14 vs. Dec 13
Section II.
Key Corporate Highlights
9
IIL’s Integrated Platform Is Well Entrenched To Take Advantage of Long Term Opportunities
2. Strong Brand portfolio
Large kitty of generic brands - Tractor Brand as the Umbrella brand
99 branded formulations with Navratna brands featuring in the leading products of their respective categories
Strategic brand acquisition of “off the shelf brands” E.g. Lethal, Monocil, etc.
Vigorous Promotion campaigns
Training and Education to farmers
1. Favorable industry dynamics
Increasing population, reducing arable land
Under-penetration of crop protection products
Low agricultural productivity
Rising food demand due to rising income
3. R&D and New Product Development Capabilities
R&D centre established in 2005 for reverse engineering of off patented products
Developed 50 new processes, 1 process patent received, 7 process patent applications pending
JV with OAT Agrio Co, Japan for product discovery and IP through new invention R&D centre
MNC partnerships - Tie-ups with AMVAC, USA & Nissan Chemicals, Japan
4. Robust manufacturing facilities and distribution network
5 formulation and 2 technical manufacturing facilities in North and West India with advanced technology
Pan India Network of 5,000+ distributors and 29 branches & depots
5. Experienced Promoters and Management Team
2+ decades of promoter experience & track record
Successfully created strong brands in the space and have also marketed off-shelf acquired brands
6. Robust Financial performance and Balance Sheet Strength
Track record of sustained growth, Revenue CAGR of 29% between FY12-14
Low debt-equity level
Credit rating of CRISIL A/negative and CRISIL A2+ for fund and non-fund facilities
Integrated company providing solutions
to Indian agriculture
Industry Dynamics
Portfolio of established
agro- chemical brands
Experienced Management
Team
Strong R&D focus &
International Strategic Tie-
ups
Robust Financial
Performance
Robust Manufacturing Facilities & Pan-India
Distribution Network
10
1. Industry Dynamics
India’s crop protection industry is estimated at USD 4.25bn in FY14 & is expected to reach USD 7.50bn by FY 19
India is the 4th largest producer of agrochemicals, after USA, Japan & China. It is a highly fragmented generics market with exports constituting almost 50% of the Indian crop protection industry
Insecticides is the largest sub-segment with almost 60% market share; Fungicides and Herbicides are the largest growing segments accounting for 18% and 16% respectively
Andhra Pradesh (erstwhile), Maharashtra & Punjab are major consumer states
Mancozab, Acephate and Chlorpyriphos are the mostly widely consumed technical products. Nearly 100% of the top 5 consumed products are domestically manufactured
Imports form about 31% of the total domestic consumption. China is the largest supplier, accounting for over 55% of the total imports
Key Growth Drivers
Exports to remain the key growth driver; expected to grow at ~16%
Low cost manufacturing, availability of technically trained manpower, seasonal domestic demand, available capacity, better price realization globally and strong presence in generic pesticide manufacturing
Growing food demand with limited land availability
Agrochemicals worth USD 6.3 billion are expected to be taken off-patent list by 2020
Low consumption of pesticides in India
Expensive labour to drive herbicide/weedicide consumption in India
Indian Crop Protection Market
Pesticide consumption (Kg/ha) global comparison
Source: FICCI & Tata Strategic Management report - Jan 2015; CRISIL report dated 21 April, 2015
2.00 4.20
2.25
3.30
FY-14 FY-19
8%
16%
USD 4.25 billion
USD 7.5 billion
Exports
Domestic
Total
12%
0.6
5 5
7 7
12 13
17
India UK France Korea USA Japan China Taiwan
Poised for strong growth Indian Crop Protection Market Poised for strong growth
11
2. Portfolio of Established Agro-Chemical Brands
Track Record Of Turning Around Acquired Brands
IIL has successfully demonstrated the ability to acquire off-shelf brands and turn them around through marketing initiatives
Tractor Brand
– Has become the Umbrella brand for marketing & branding purposes, enjoys a strong brand recall and helps introduce new products, through brand extensions
Lethal
– Part of 21 brands acquired from Montari Industries in 2003
Monocil
– Acquired from Nocil in 2011, Monocil had been off the shelf prior to its acquisition
– Within the first year of acquisition, IIL managed to make Monocil one of its key products
IIL has 99 formulations with the Navratna range of branded formulations featuring in the leading products of their respective categories (1)
‘Pulsor’ is the market leader and sole product available in its specific product segment(1)
‘Navratna’ and Super 11 range of branded formulations contributed 53% and 14% respectively of the total branded formulation sales for December, 2014
Effective marketing and branding strategy and successful implementation has enabled IIL to develop a strong brand and is a key competitive strength to leverage in executing product portfolio expansion strategy
Brand Portfolio
Note: (1) CRISIL report dated 21 April, 2015; Revenue share numbers are for 9 months ending December, 2014 and are as a % of branded formulations.; * including brand extensions
Category Brand Name Revenue Share Technical Name Particulars
Insecticide Monocil 6.9% Monocrotophos 36% SL Protects cotton against bollworms and sucking pests
Insecticide Victor* 5.0% Imidacloprid 17.6 % SL Protects cotton and other crops against sucking pests
Insecticide Lethal* 6.8% Chlorpyriphos 20%EC Protects from stem borer in paddy and white grub in sugarcane
Insecticide Thimet 10.0% Phorate 10% CG Protects paddy and other crops against stem borers
Insecticide Nuvan 8.0% Dichlorovos 76% EC Protects paddy and wheat against brown planthoppers and caterpillars
Herbicide Hijack + Flite 5.5% Glyphosate 41% SL To remove primarily all weeds in non-crop areas
Herbicide Hakama 4.2% Quizalofop Etyl 5% EC To control grassy weeds in soybean, cotton, black and green gram
Fungicide Pulsor 4.1% Thiafluzamide 24% SC For control of sheath blight in paddy
Insecticide Pluto / Xplode 2.6% Emamectin Benzonate 5% SG Protects pulses against bollworms
12
New Product Capabilities Initiative
3a. Strong R&D Focus
R&D centre located at Chopanki (Rajasthan) for developing processes for new environmentally friendly formulations - accredited with NABL and recognized by DSIR
Team includes 14 scientists, 6 engineers, 5 technicians and other staff as at March 31, 2015
Successfully developed 50 new processes, including making Thiamethoxam environmentally friendly by eliminating Methanol from its formulation and decreasing both time cycle and cost
In March 2014, IIL was granted the process patent for the process of preparing Acetamiprid, an active ingredient
1 process patent received, 7 process patent applications filed by IIL pending with the Indian Patent Office
Research and Development JV with OAT Agrio, Japan
Joint venture with OAT Agrio, Japan to set up a new R&D facility at Chopanki, Rajasthan. OAT plans to provide the technology and know-how
Engaged in the invention of new agricultural molecules for domestic and international markets besides managing intellectual property
Launch new patented products in India and 14 other countries in the Indian Sub-continent, Middle East and East–African countries for which IIL has the exclusive distribution rights
OAT Agrio Co. Ltd., Japan is engaged in the manufacture and sale of agricultural chemicals and fertilizers in Japan with USD 108mn in revenue (2014)(1)
Note: (1) Bloomberg - Dec 2014 annual revenue
13
3b. International Strategic Tie-Ups
Focus On Specialty Molecules Through International Collaborations
Dec - 14 revenue
Brands Partner Since Nature of Agreement (INR mn)
Thimet AMVAC, USA 2006 IIL is responsible for manufacturing, marketing and distribution of Thimet in India Largest product for IIL in terms of sales
630
Nuvan AMVAC, USA 2011 IIL is responsible for manufacturing, marketing and distribution of Nuvan in India
508
Pulsor Nissan Chemical (Nagarjuna Agrichem)
2012 IIL has rights for marketing of Nissan’s product – Pulsor in India
257
Hakama Nissan Chemical, Japan (Nagarjuna Agrichem)
2012 Marketing of their popular weedicide product under the brand name HAKAMA in India
266
Note: Dec-14 numbers are for 9 months ending December, 2014
14
Strategic Manufacturing location & infrastructure…Surplus land, Environmental clearance and Tax benefit available
4a. Robust Manufacturing Facilities
Location Unit Started in Plot Area Built Up
Area Installed Capacity Capacity Utilisation (FY 14) Lease
tenure (years) Sq Mt Sq Mt Liquid
(KLPA) Granules (MTPA)
WDP (MTPA)
Technical (MTPA)
Liquid (KLPA)
Granules (MTPA)
WDP (MTPA)
Technical (MTPA)
Chopanki, Rajasthan
Unit I – Formulations
FY02 8,000 3,314 6,000 7,500 4,500 2,500 6,475 1,023 90
Unit II – Technicals
FY08 3,958 1,657 - - - Tech:1,800 Tech: 395
Bulk: 498 90
Bulk: 2,000
Unit III – Formulations
FY15 7,094 4,077 - 20,000 - - - 680 - - 90
Samba, Jammu and Kashmir
Formulations FY05 9,358 6,210 5,450 6,100 1,880 - 2,230 2,289 777 - 90
Udhampur, Jammu and Kashmir
Formulations FY12 6,070 5,434 3,000 2,000 600 1,530 253 525 99
Dahej, Gujarat
Unit I – Formulations
FY12
1,67,631 11,830
3,000 12,000 2,500
3,021 2,409 (Bulk)
5,982 504
77
Unit II - Technicals
FY13 10,000 5,073
Total 2,02,111 32,522 17,450 47,600 9,480 13,800 11,690 15,679 2,829 5,966
Capacity Utilisation
67.0% 32.9% 29.8% 43.2%
•Note: KLPA – Kilo Litres per annum MTPA – Metric Tonnes per annum
15
4b. Pan-India Distribution Network
Successfully leveraged the strong reputation and experience of the promoters to establish an extensive network of distributors and dealers across India
Distribution network comprising of over 5,000 distributors with pan-India presence
29 depots/branches (which are also warehouses)
Footprint across major crop producing regions including Punjab, Haryana, Andhra Pradesh (erstwhile), Maharashtra, Uttar Pradesh, Karnataka, Tamil Nadu, Bihar, Gujarat and Madhya Pradesh
Preferred partner for International innovators entry into India
Strong Grass-root distribution network
Brand licensing and marketing agreements with AMVAC, USA and Nissan Chemical, Japan
AMVAC, USA also granted the exclusive license and right to use know-how & information related to Phorate and its trademarks for promotion, marketing, distribution and sale in India
Distributor for Nissan Chemical products ‘Pulsor’ in India
American Vanguard Corporation (AMVAC) is a diversified specialty and agricultural products company focusing on crop protection, turf and ornamental markets, and public health applications
Nissan Chemical Industries, Ltd., is a chemical manufacturing company engaged in six business segments i.e Chemicals, Functional Materials, Agricultural Chemicals, Medicinal Drug, Wholesale and Others
16
5. Experienced Management Team
2 DGMs
2 Project Managers
1 Unit Head
Chairman
Managing Director
Head International Marketing
Head Procurement and Institutional Business
Vice President CFO
Production Marketing R&D Admin & HR IT Finance
4 GMs 1 GM 1 GM
1 Sr. Manager
1 GM 1 Company Secretary
1 Sr. Manager
17
6. Robust Financial Performance
PAT and PAT Margin (in INR million)
EBITDA and EBITDA Margin (in INR million)
Debt / Equity
Revenue and Revenue Growth (in INR million)
564 693
818
975
10.8% 11.2%
9.5%
12.1%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
0
200
400
600
800
1,000
1,200
FY12 FY13 FY14 Dec-14
0.89x
1.01x
1.06x
0.80x
0.85x
0.90x
0.95x
1.00x
1.05x
1.10x
FY12 FY13 FY14
Note: Dec-14 numbers are for nine months ending 31st Dec, 2014; Networth is adjusted for unamortised share issue expenses and preliminary expenditure not written-off; EBITDA refers to Operational EBITDA; Debt = Long term debt + Short term debt + Current maturities of long term debt
5,218
6,167
8,641
8,034
4,000
5,000
6,000
7,000
8,000
9,000
FY12 FY13 FY14 Dec-14
Healthy Growth in Income and Earnings with stable debt/equity
330 353 399
487
6.3% 5.7%
4.6%
6.1%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
0
100
200
300
400
500
600
FY12 FY13 FY14 Dec-14
Section III.
Growth Strategy and Key Value Creation Drivers
19
Growth Strategy
IIL has set a platform and a well laid down strategy in place for future growth
Per capita consumption of crop protection products in India is amongst the lowest in the world at 0.6 kg/hectare as compared to 5 kg per hectare in the UK and 7 kg per hectare in USA
Develop new and high margin products, including product extensions of established brands and expand the revenue share of Navratna and Super 11 ranges of branded formulations
Existing infrastructure, manufacturing capabilities, distribution network and access to R&D and know-how will be instrumental to enhance the product portfolio
Expansion of product portfolio, organically & inorganically
Agrochemicals worth USD 6.3 billion are expected to be off-patented by 2020, providing opportunity to introduce new products to the portfolio
Focus on developing processes for new environmentally friendly formulations, improving existing processes and production cost efficiency by leveraging advanced in-house R&D facility
New JV with OAT Agrio, Japan, will enable the launch of new patented products in India and 14 other countries in the Indian Sub-continent, Middle East and East–African countries for which IIL has the exclusive distribution rights
Innovation & product development
Increasing geographical penetration & addressable market
Focus on institutional sales
Exports currently constitute ~50% of the Indian crop protection industry; expected to grow at a 16% CAGR to reach US$ 4.2 billion by FY-19, resulting in a 60% share of the Indian crop protection industry
Pursuing registrations in Middle East and South East Asian regions
Experienced team in domestic and international sales and marketing
Technical synthesis plants have 11 streams which provides the flexibility to expand product range and change product mix to changes in the customer demands and industry trends
Leverage advanced R&D capabilities to expand contract manufacturing.
Preferred choice for global agrochemical companies operating in India due to capability in low cost manufacturing, availability of trained manpower along with R&D and manufacturing capabilities
Source: FICCI & Tata Strategic Management report – Jan 2015.
Section IV.
Financial Performance
21
Key Financials
Note: Figures have been regrouped wherever necessary; Networth is adjusted for Unamortised Share issue expenses and Preliminary expenditure not w/off
INR Mn
Particulars Mar-14 Mar-13 Mar-12
Period (months) 12 12 12
EQUITY AND LIABILITIES
Networth 2,429 2,086 1,785
Debt 2,580 2,113 1,585
Other liabilities 2,868 2,086 1,796
TOTAL 7,877 6,285 5,166
ASSETS
Fixed Assets 2,243 1,852 1,432
Current Assets 5,450 4,366 3,485
Other assets 185 67 249
TOTAL 7,877 6,285 5,166
Key Balance Sheet Items Key Profit & Loss Items
INR Mn
Particulars Dec-14 Mar-14 Mar-13 Mar-12
Period (months) 9 12 12 12
Revenue from operations (Net) 8,034 8,641 6,167 5,218
Total expenditure 7,058 7,823 5,474 4,654
(excl. depreciation & finance cost)
Operational EBITDA 975 818 693 564
Other Income 3
5 2 1
EBIT 875 756 638 541
EBT 599 487 464 429
PAT 487 399 353 330
Depreciation 103 67 58 24
Finance cost 276 269 174 111
Margins
EBITDA margin 12.1% 9.5% 11.2% 10.8%
EBIT margin 10.9% 8.7% 10.3% 10.4%
Net Profit margin 6.1% 4.6% 5.7% 6.3%
ROCE 16.4% 16.8% 20.6%
ROAE 17.7% 18.2% 20.0%
Annexure
23
47 50 52 44 47
13 19
22
19 22
2009-10 2010-11 2011-12 2012-13 2013-14
Domestic produce Imports
Indian Crop Protection Industry – Overview
Domestic consumption of pesticides (technicals) (in ‘000 MT)
Growth in pesticide (technicals) capacities and actual production (in ‘000MT)
Source: CRISIL report dated April 21, 2015; Ministry of Chemicals and Fertilisers, Department of Chemicals and Petrochemicals, Statistics and Monitoring Division, GoI.
58
15 10 8 7
3
Mancozab 2, 4-D Acephate Chlorpyriphos Cypermethrin Glyphosate
Key pesticides and insecticides (technicals) consumed in India (in ‘000MT for 2013-14)
184
230 245
273 289
134 143 155 154 178
0
50
100
150
200
250
300
350
2009-10 2010-11 2011-12 2012-13 2013-14
Capacity Production
24
Distinct Characteristics Across the Industry Value Chain
Source: CRISIL report dated 21 April, 2015.
Value Chain Intermediate Technical Formulation Integrated
Manufacturing Process
Standardized Handles toxic inputs
Technical and Knowledge intensive
Handles toxic inputs Limited product flexibility
Higher productive flexibility
Technical + Formulations
Entry Barrier Low Commodity like product Highly competitive
High Closely held product
technology Patents and registrations Environmental approvals
Small Scale – Low Large Scale – High Patents & registration Brand equity/ loyalty Wide distribution
channel
High Patents, registrations
Environmental approvals
Competitive Strength
Process skills Cost efficiency
Scalability and innovation Products patent
registrations
Product mix Marketing research Brand strength
Scalability, product mix and marketing reach, innovation
Key Features
Profitability Relatively low Moderate to healthy Moderate to healthy Moderate to healthy
Working Capital Intensity
Low Moderate High High
Impact of Monsoon Low Trickle-down effect Direct Direct
Capital Intensity High High Low High
25
CSR Initiatives
IIL’s inclusive growth policy
AGLA KADAM Realizing its social responsibility, the Company started a social welfare programme
“Agla Kadam” (English: “Next Step”) in Punjab and Rajasthan in 2008
Over the years IIL has adopted many schools and villages to offer people the basic needs of life including healthcare, education and women empowerment
It is undertaking various activities such as providing books and study material to children, giving scholarships and aid to schools, providing technical education to farmers about new and latest technologies, etc. to increase their yield and improve their income
The Company aims to adopt more villages in other parts of the country as well
JAGRUKTA ABHIYAN Identifying the need for information among farmers for their upliftment, IIL initiated a
farmer awareness initiative “JAGRUKTA ABHIYAN” (English : “Awareness campaign”) in 2007, where a team of agri experts is deputed to train and help the farmers for better agricultural practices in Punjab, Haryana, Andhra Pradesh and Rajasthan
Following the successful response, the nationwide campaign is conducted every year focusing on awareness towards the safe and judicious use of agro chemicals
This campaign was very well accepted by the farmers all across the country
About 5,000 meetings are conducted in every state including participation from government officials
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Promotion of Green Gram for Prosperity and Soil Health – An Awareness Initiative
This is a recent Initiative started by the
company to promote the inclusion of the
Green Gram in the Crop Rotation among
the farming community.
Inclusion of Green Gram in the crop rotation is very
useful to the farmers, they can get this short
duration crop between two major crops and get the
handsome income. Also being the leguminous crop
helps to increase the fertility of the soil resulting in
the better productivity of the next crop.
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For Any Queries, Contact
Sandeep Aggarwal
Chief Financial Officer
Insecticides (India) Limited
T: +91 11 27679700