which are the top 5 states which contribute to the revenue of agri input business ? how does the monsoon in these states impact revenues from agri input business.
Also, crop-wise contribution to revenues of agri-input space and future product launches are targetted at which crops…
Can someone help frame the Forex Management question properly??
Following data points that I could gather from the AR 2011. If you need anything more, let me know.
Rgds
Donald
Forex Management
1. Forex mark-to-market loss of 8.85 Cr in Q2.
2. Hedged Forex contracts outstanding as on 31Mar US $20 mn and Euro 8 Mn.
3. Hedged Foreign Currency exposure as on 31st Mar 2011 US$ 6.4 Mn and Euro 0.4 Mn.
4.Unhedged foreign currency exposure US$ 32.4 Mn and Japanese Yen 58 Mn.
5. Net Forex Inflow equivalent of 70.65 Cr (247 Cr Exports - 171 cr Import - 5 cr exp)
|
Unhedged Forex |
$Mn |
Yen |
|
PCFC term Loan |
12.19 |
|
|
Buyers Credit |
0.28 |
|
|
EEFC Account |
0.07 |
|
|
Import Creditors |
6.77 |
48.08 |
|
Export Debitors |
13.15 |
10 |
|
Total |
32.46 |
58.08 |
|
Value of Imports |
Rs Cr |
|
RM |
166.97 |
|
Spares |
1.69 |
|
Capital Goods |
2.59 |
|
Total Imports |
171.25 |
|
Expenses in Forex |
|
|
Professional |
0.59 |
|
Consultancy |
0.03 |
|
Interest |
0.65 |
|
Travelling |
0.11 |
|
Salary |
0.42 |
|
Others |
3.39 |
|
Total forex expense |
5.19 |
|
Earnings in Forex |
247.10 |
|
Net Forex Inflow |
70.65 |
Some Notes:
1). launched 2 new products -1 insecticide, 1 ?
2). 9% rupee depreciation in just 10 days. forwards or exposure only for 1 year forward
3). D/E improved to 0.6 at 30 Sep. Credit rating for long term/short term bank loans has improved in view of strong financials
)----
Q&As
1). Other exp incl a) selling & distribution 40% of total other exp,Adv + sales promotion+freight +travel; b) close to 50% is related operating expenses lab, power, environment management. Increase is close to 60% in operating exp - due to increase in CSM business. Sales promotion expenses gone up significantly
As we scale up CSM, these has gone up. Also changed product mix in Q2 9due to prolonged monsoon) has played a part in impacting margins. This is a temporary seasonal thing. we do not expect this every quarter.
2). We are hopeful of achieving our earlier guidance. both sales and profits
3). Inventory in agri chemicals - 125 Cr; rest in CSM
4). Despite huge growth in Sales, Working capital has only increased by 22 Cr as against 125 cr increase in Sales or 42% sales growth. Debt has gone up from 133 cr to 177 Cr - not only working capital , but 13-14 cr is in Capital expense which has not yet been assigned.
Net working capital situation is better actually. This is due to better Client credit Management. ofcourse we would like to manage current Asset Management better - e.g the 125 cr in CSM inventory - but this is more for leveraging for future growth
5). year end debt will remain close to current levels. May be 5 10 cr around current no 175 cr or so.
6). Capex invested close to 55-60 cr. 1st phase is close to 125 Cr. not sure whether we will expense all of that in this year
7). order book is close to $325 mn. No increase in net order book. But some contracts are under negotiation and hopefully this will
8). 152 cr CSM , Fine Chem 92 cr in Q2
9). CSM is margin steady-state; Agri has had monsoon effect, channel issues. But this Q Launched new CSM products and stabilising them - during 3-5 months duration - then they become pretty much stable.
10). Stand by 100-150 basis EBITDA margin improvements. End of the year expect 18-to 18.5 %. Another 100 to 200 basis improvements in both
11). Current hedge book - 33 mn $; firm orders in hand $97 mn;
12). industry growth from 900 mn to 1.6 bn will continue. tremendous scope for industry to grow. everyone will have room to grow. Generic players will grow accordingly. but the innovators will surely have their own growth trajectory. the ratio of 40% generics in the mix will change eventually to 10% or 90% innovative in next 3 years.
13). Next exporter we are. in longer horizon we should surely benefit if rupee depreciating or dollar appreciating.
14). margins - Q1 product mix vs Q2 product mix change - operating expense skew. Q2 saw also 9cr ad expense vs 3 cr last year. additional 6 cr in this Q2, so EBITDA impact looks very big; but purpose/impact of sales promo, brand building is longer term. This is a cost also which is surely controllable. So seeing conditions in coming Qrs, we can control these. So tradeoff is whetehr you take on basis of margin profile or you would like to take based on long term basis
15). volumes Nominee Gold is impacted too. Monsoon has played the major dampner. but over H1 period Nominee has still grew by 60%
16). Sony is a partner approach. still in the process of evaluation. progress is looking good. confidentiality with Sony does not allow us to talk specifics on innovations but yes we can share progress is looking good.
17). agriculture Input - scenario is actually opposite of the global uncertain scenario. Actually all food scenraio is in shortage. and globally not just in India. This is a sector that will be probably be the last to get impacted in scenario. And commodity situation getting easier may well benefit us, if our thinking is right. Tone seem no really worries at all.
18). 24 products in In agri inputs business. 80:20 ratio applies as in all businesses . share of major brands versus others.
19). CSM product life cycle is 15-20 years. and growth cycle is easily 7-8 years. And new products will keep adding to that
20). Agri can go to 19 -19.5% to 20%EBITDA; CSM can touch 20-22%
21). Manufacturing of both businesses is common. So ROCE for individual segments is difficult to provide.
22). 1 product new commercialised. Existing products has mainly contributed to revenue ramp up in CSM
23). ad exp increase happened for expanding product across the country. Once that is established, you dont need that build up beyond new product introduction. You wopuld not see this kind of expense in next 2 quarters at least.
24). 50% growth in Q2 in CSM. In H1 achieved 154 cr revenue; expecting to continue this momentum for h2 and achive close to 325 cr
25 SEZ completion is Q1 FY13. But actually shift from march to April. in terms of benefits also probably that will be a more prudent thing.
26). 2x Assets is achievable. agri business has grown only 8-10% in Q2 because of monsoon and cropping. Expect to touch close to 575 cr in Agri business. by end of year we may be in position to launch another molecule. No new launches in next 2 qrs.
27). new products -insecticide tie up with Bayer - spiromecefine. other is a new fungicide - with another company?- mix of metiram and alzol compound.
28). 125 cr mainly capex for CSM. Maintenance capex will be not significant 5 10 cr every year.
29). Pipeline -in last 1 yr 5-6 products have moved from pipeline to commercial and similar have got added. there is always a commercial and technical evaluation for introducing a moelecule
30). Nominee Gold - product received extremely well. alreadyy no 2 in 1.5 years. Technically the product is far superior in Rice herbicide. there are no other pre-emergence herbicide. Bayer is partnering with PI in India for this molecule!!
31). 8.85Cr is MTM on open forward contracts. Loan account impact is included in this.
32). Insecticide - tea, chilly. fungicide - for vegetable. substantial revenue exoected. but this is competitive info so cant give you any numbers
33). nominee goild share - competitive info again, so we would like to stay away
34). 125 cr csm capex towards 7-8 moleculses. spread equally more or less
35). out of 10 in pipeline - we are able to commerialise 4-5
36). around 55% insecticide; close 32% is fungicide, balance herbicide
37). we basically concentrate on new products - typically only 1 or 2 sources else we do not enter - and thats our differentiator
38). by FY12 end we will be 5% of overall Rice scope -Nominee Gold. leave it to you to reason out market potential
39). GLP accredition helps broaden service offering to MNC partners in process research. if existing partner can offer GLP certification to them it certainly helps.
)- End of questions-
Guys,
Lets have your first-cut impressions on the concall. here’s mine
a) The explainations on the forex impact part didnt fully add-up. i wud like to get more details in our meeting, hopefully
b) margin impact - If you take out the 6cr additioonal S&M and say 2 cr addition stabilisation exp on CSM, margins come back to over 18%; which is what the Mgemt has been maintaining. So I’m reasonably okay with the tenor, quality and tone of answers provided
c) overall tone is pretty bullish; no apologetic tone baout anything; guidance or otherwise
)- Donald
Disc: I have vested interests in PI; Please do yr own homework for any investment decisions.
My impression on the tone was positive- they see the lower margin this quarter as investing upfront in marketing, inventory, etc. & as non- recurring. Seemed to want to say, that operating leverage will kick in after initial investments.
Quarterly fluctuations seems a fact in the agri-business. They seemed upbeat on the prospects.
CSM business - no new contractual additions this quarter but were in discussions. They seemed positive on the segment.
Management came across confident of maintaining and delivering on the top & bottom line for this year ( and if I heard properly for the next few years ).
Don’t know them enough to make a call if they deliver on what they say - but felt they were quite upbeat on future growth & their ability to maintain margins.
Forex part I still fail to understand. If the company is a net exporter (as is claimed here as well as in Donald’s calculations above), then how on earth did they manage to lose money in a quarter where rupee depreciated???!!! All net exporters made money this quarter, so cannot understand this.
Another interesting theme in this concall is most of the really important factors cannot be commented on by the management because there is supposedly competition out there!! Again, one hand the company is saying that they are partnering with innovators and no one else can sell what they are into, and on the other hand they are scared stiff of letting out any data-oriented information. Gives me a bad feeling about the whole thing!!
I am willing to hold on for one more quarter, but now my inclination is more towards
getting out than accumulating.
Yeah, they sounded positive.
I liked what I heard of CSM business. This business margins are stable and they are scaling up on that. The new plant is dedicated for CSM is what I heard. At full capacity it can do about 800 cr annual sales ?. something like 2x current sales in CSM. They have not increased the order book though.
I’am bit concerned about agri input business in general (not about PI specifc).
I thought this year monsoon was good and still they did not deliver.
If monsoons are bad, then also they will struggle.
So under what kind of conditions will this business prosper ?
They were talking about “cloud conditions/patterns” etc and and their product mix did not match this climatic conditions and they is why their margins in agri input business was bad.
Now, if the company has to adjust the product mix according to cloud patterns and other climatic conditions, it may be a tough ask for the company.I will not bet big on such a company.
I dont think my concern it is specific to PI in particular, but agri input comapanies in general. we also saw rallis struggle this quarter.
is it good to bet substantial part of our portfolio on these kind of companies, which have to predict on cloud and other climate conditions and then adjust product mix accordingly ?
@Abhishek - am as concerned as you on the forex risks front.
We should treat this as a hypothetical case study.So that we understand what happened, and can evaluate future risks on this front properly.
No prior knowledge of PI Industries is necessary!
Premise: A Net Exporter (earning forex) manages to lose money, when Rupee depreciates. Rupee depreciates by 9% in just 10 days of September 2011
Data Provided:
a) Total Export Data (247.10 Cr), Total Import data (171.25 Cr), Net forex earnings (70.46 Cr) or $14-16 mn
b) Hedged contracts outstanding as on 31 Mar ($20 mn), Hedged forex exposure as on 31 Mar ($6.4 mn)
c) Unhedged Forex loans (32.46 mn)
Please elaborate on scenarios where the Net Exporter can end up losing money, when rupee depreciates.badly as it did in Sep 2011
I am no expert; just trying to work out the likely scenarios. Subject experts please help!
So that we understand what happened, and can evaluate future risks on this front properly. And when I meet Management I can quiz them armed with correct perspectives.
a) The company follows a policy of hedging 90-95% of its NET forex earnings.
In this case 70 Cr ~=14-16 mn. As on 31st Mar its had $20 mn hedged
Does it not depend on at what levekl they had hedged?/ they could hedge at Rs 47 in Mar (when it was Rs 45) for 1 yr forward, but in Sep Rs goes to $50, so the company actually posts a MTM loss of 3 Rsx20 mn =6 Cr
b) Forex $6.4 mn hedged at 48, so MTM losses Rs. 3x6.4 mn=1.8 Cr
b) Unhedged Forex loans interest liabilities =5% x $32 mn = $1.2 mn; so for Q =0.3 Mn interest liability suffers a loss of 2x0.3 =Rs 6 lakhs
Subject experts please help!
Rgds
Donald
Key Takeaways from Q2FY12 Concall of PI Industries Ltd. :
-
Agri-Input segment grew by 35 % YoY in H1FY12 to stand at Rs. 295 cr… For Q2FY12, Agri-Input segment grew by 9.28 % YoY to stand at Rs. 153 cr.
-
CSM segment grew by 140 % YoY in H1FY12 to stand at Rs. 154 cr… For Q2FY12, CSM segment grew by 174.62 % YoY to stand at Rs. 92 cr.
-
Unexpected heavy rain spell followed by a dry and cloudy spell affected the revenues of Agri-Input segment in Q2FY12. However, Rabi season looks promising because of increase in water in reservoirs leading to better plantation.
-
EBITDA for H1FY12 grew by 48 % YoY to stand at Rs. 80.08 cr… For Q2FY12, EBITDA grew by 13.1 % YoY to stand at Rs. 37.3 cr.
-
Company decided to incur high Operating Expenses as well as high SG&A expenses in Q2FY12 itself and take a one-time hit on EBITDA margins by keeping long term growth in focus. Such expenses were necessitated by scale-up of CSM business as well as two new product launches in Agri-Input Segment. As per management, such high expenditure, especially on SG&A front (~ Rs. 9 cr.), is not likely to get repeated in Q3 or Q4 and so EBITDA margins of H2FY12 are likely to be substantially better than H1FY12.
-
Company launched two new products in Agri-Input segment ; one insecticide and one fungicide. Insecticide was launched in tie-up with Bayer while fungicide was launched in tie-up with BASF. Both are high potential products with insecticide catering to crops like Tea, Chillies, etc. and fungicide catering to Vegetables.
-
Company’s flagship product, Nominee Gold, continued its growth momentum with revenues from this product increasing by 60 % YoY in H1FY12 despite taking a severe hit in Q2FY12 because of unfavourable weather conditions.
-
Order-book of CSM segment at the end of H1FY12 stands at USD 325 mn. as there were no fresh intake of orders in Q2FY12. However, as per the management, negotiations are progressing well and substantial order-wins are expected in H2FY12.
-
Company’s balance sheet has considerably improved YoY with debt-to-equity ratio standing at 0.69 as compared to 1.16 year before. Company expects to end fiscal FY12 with debt levels similar to that are at the end of H1FY12 (Rs. 170 +/- 10 cr.). Inventories of Rs. 213 cr. includes Rs. 125 cr. inventory from Agri-Input segment and Rs. 12.5 cr. inventory w.r.t. projects (upcoming CSM facility) that will subsequently get converted to capital-work-in-progress in due course.
-
In CSM segment, company has commercialised one new molecule in H1FY12 while molecules that were commercialised in FY11 are significantly scaled-up.
-
Company expects to end FY12 with revenues of close to Rs. 900 cr. with 325-340 cr. coming from CSM segment and rest coming from Agri-Input segment.
-
Overall EBITDA margins are expected to settle at 18-18.5 % for FY12. Going forward, company expects substantial improvement in EBITDA margins in both the segments with CSM margins expected to improve to 22-23 % and Agri-Input segment margins expected to improve to 19.5-20 %.
Conclusion :
Agri-Input segment was the main culprit for lower revenue growth for Q2FY12 as due to unfavourable weather conditions entire sector suffered and PI was also not spared. Inspite of substantial headwinds faced by its main operational segment, viz. Agri-Input, and that too in its highest contributing quarter (Q2) of the fiscal, company was able to attain an overall revenue growth of 31.3 % YoY (excluding Polymer Segment which is sold-off, the like-to-like YoY growth comes to 41.45 %) and a QoQ growth of 18.8 % on a consolidated basis because of an exceptionally good performance of company’s other operational segment, viz., CSM.
Unfavourable weather conditions coincided with two new product launches in Agri-Input segment and as the initial cost during any product launch is high, EBITDA margins suffered to stand at just 15.3 % for Q2FY12. However, these one-time expenses have to be looked at in the light of benefits that they are likely to accrue in H2FY12 as almost all the expenses (especially SG&A) w.r.t. two product launches are written-off in Q2FY12 itself and no expenses are pending to be written-off in Q3 or Q4. Hence, EBITDA margins are likely to improve substantially in H2FY12.
Ground conditions for Agri-Input segment have also substantially improved because of good monsoons with water levels in all the 81 major reservoirs across the country in the first week of November’2011 at 119.309 bn. cubic centimeters which is 105 % of last year’s storage and 119 % of the average storage of last one decade. These conditions augur very well for coming Rabi Season and that is the reason why management conservatively estimates a revenue of Rs. 280 cr. from Agri-Input segment in H2FY12.
Also, regarding CSM segment the visibility is extremely high with management’s conservative estimate of its contribution put at Rs. 170-185 cr. in H2FY12.
In above paras we have used the phrase ‘conservative estimate’ because, as per our analysis, the figures provided by the management are the minimum the company can achieve in both the operational segments. This is because, if we look at the forex hedge taken by the management and the order-execution mandate that company has till March’2012 at USD 48 mn. for CSM segment, the CSM segment is likely to atleast attain a revenue figure of Rs. 200-210 cr. in H2FY12. Here, we need to remember that even in Q2FY12, CSM segment has operated at an EBITDA margin of 20 % + and if we extrapolate this margin to H2FY12 then CSM segment itself is likely to contribute ~Rs. 40-44 cr. in EBITDA in H2FY12. Similarly, we have seen the worst in terms of Agri-Input segment revenues in Q2FY12 and with water levels in reservoirs at all-time high, Rabi season is expected to contribute handsomely in H2FY12 and management estimte of Rs. 280 cr. revenue contribution from this segment is on a conservative side. However, here the story will be margins which got severely affected in Q2FY12 because of one-time expenses written-off w.r.t. new product launches. As benefits of costs incurred start flowing in coupled with good growth in revenues because of improved ground conditions, EBITDA margins for this segment are conservatively estimated to be in the range of 18-20 % for H2FY12 which will mean an EBITDA contribution of ~Rs. 50-56 cr. from this segment.
To conclude, what we will have in H2FY12 on a consolidated basis is an EBITDA of Rs. 90-98 cr. for H2FY12 and if we add it to the EBITDA achieved by PI in H1FY12 then for entire FY12, EBITDA comes to Rs. 170-178 cr… Now, with debt-levels projected to be at Rs. 170 +/- 10 cr. and after deducting depreciation, interests costs and taxes, PAT for fiscal FY12 comes to Rs. 91-96 cr. without exceptional gains (of Rs. 23 cr.) which means a diluted EPS without exceptional gains of Rs. 36.3 â 38.3. Hence, ultimately what we have is a Rs. 900 cr. company with a strong visibility of atleast 30 % growth for next two fiscals trading at a P/E of just 14 on FY12e numbers of which first half has already passed.
As the time goes by and Q3FY12 numbers come out, FY13 numbers will come into picture wherein contribution from the new CSM facility will kick-in which will change the entire landscape as CSM segment, on a conservative basis is likely to post revenues of Rs. 650 cr. for FY13 with EBITDA margins of 21 % +. FY13 will also see the new products that are launched in this FY12 fiscal (in association with Bayer and BASF) start contributing handsomely to the revenues and profits of PI and even if we consider no growth from this segment and assume that revenues from Agri segment will remain at FY12 levels of Rs. 575 cr. with lowest EBITDA margins of 17 % then also we have an EBITDA of Rs. 233 cr. for fiscal FY13 which after deducting all expenses w.r.t. depreciation, interest and highest taxes gives us a PAT of Rs. 128 cr. which means a conservative EPS of Rs. 51 for FY13. If we apply the historical P/E valuation commanded by PI even in worst market conditions at 15 times current fiscal numbers and 12 times forward then also within six months we have a minimum rate of Rs. 610 which will be the lowest Best Buy rate at that time. We don’t think that in current uncertain markets we have many safe companies like PI with a credible management and tremendous growth visibility and so with minimal positive trigger the stock is expected to get significantly rerated upwards.
1 Like
Don’t know them enough to make a call if they deliver on what they say - but felt they were quite upbeat on future growth & their ability to maintain margins.
Have tracked this company since last one year and attended each and every concalls, management often delivers more than promised and is very concerned regarding raising shareholder wealth. Have very positive view of the management
By the way. if the above scenario is not flawed, this would have held true for everyone! When the rupee depreciates badly,is it right to say?
a) This is a risk every fully-hedged NET exporter would face if rupee depreciates as fast as it did in last month of Qr- 9% in 10 days- leaving no scope for correcting action in that Qr.
b) And every partially hedged NET exporter would face the same risk
c) Fully Hedged net Importers will stand to gain
d) Partially hedged net importers will stand to gain
e) Unhedged Importers will face the full risk of paying up more
Hi Abhishek,
will try to reply to your queries 1-by-1 in bold…
First, its a net exporter overall but not on a quarterly basis… Hence, in case of severe unexpecteddepreciation of currency in any single quarter, the company will suffer as many of its raw materials, especially in agri segment are imprted and it has to keep on producing them to cater to the markets… However, CSM segment i.e. export will be a gradual affair as still Agri segment dominates the revenues and its 60:40 ratio… Also, my anamysis makes me believe that even in the event of significant depreciation in currency, PI will not benefit hugely the same way as it will not suffer in the opposite case as currency risks and benefits must have been mapped in the contract of CSM and above a certain % company will not suffer nor it will benefit.
This is because they are partnering with companies that are 20-30 times bigger than themselves and if in any public fora like concall and all if management speaks which is not liked by clients, it builds mistrust in the relationship which could be fatal for the company as well its shareholders… These contracts are very sensitive in nature and an Indian company like Pi has been able to penetrate this market is itself a big thing… For this they have workedvery hard over entire lastdecade and so they have to work very cautiously…
(Innovators track each and every move of the company in their own way as they are outsourcing patented molecules and Pi is one of the two vendors worldwide and so their business depends on PI)
Contrary to your feeling, my analysis makes me believe that this is the right thing done by the management and they have even shared many things which they otherwise should not have shared…
…
Hi Ananth,
Please find my replies in bold…
__
_The monsoon was good but it was very uneven… Agrichem companies prosper when there are more pest attacks… they suffer when either the crop plantations are low or weather conditions are such that they prevent many pest attacks from occuring as also prevent agrochemicals use… _
Your contention that monsoons were good still they suffered is totally wrong as you can’t look at agri companies on a quarterly basis but you need to look at w.r.t. two seasons viz., Kharif and Rabi… In Kharif (H1Fy12) they grew by 35 % which is not small by any standards… now whether this growth came back-ended or front-ended that should not be a concern… On the contrary, I wonder why all are not imagining one thing that if weather conditions would have been favourable in Q2 also then what would have been the growth ??? its despite bad conditions that they have grown 35 % in kharif season and if Rabi season is good then the growth rate will be exceptional…
With regards to allocation of space for Pi in portfolio its an individual decision based on various factors but remember one thing that every compant, whether you take Titan, Reliance, Jubilant Food or for that matter any co. is dependent on some or the other factor to prosper… For Agri companies its weather but agri-chem. usage is so low in India and with improved irrigation facilities, agrichem cos. are not that much suffered by vulgarities of weather as fertilizer companies are…
Yeah, they sounded positive.
…
Mahesh,
Thanks a lot for your detailed inputs.
Some observations on yr inputs:
a) Its better if you can substantiate the the source of this monsoon report and the optismism for the Rabi crop(as quoted below). is it from some journal/website?
b) You make no mention of the Forex risks, going forward. Whats your take on that?
-Donald
Conclusion :
conservatively estimates
Hi Donald,
The link to the latest article mentioning reservoir water levels :
http://www.business-standard.com/india/news/moist-earth-springs-hopesturdy-rabi-crop-output/455031/ Link: http://www.business-standard.com/india/news/moist-earth-springs-hopesturdy-rabi-crop-output/455031/
__
Apart from these, I have received many inputs from analysts that have ground level contacts which consider the record water levels as a very positive sign for forthcoming season.
__
With rgds. to forex risks, I have not made any mention of it because its a passing phenomenon and I don’t regard it as a major concern especially for a well-run company like PI which has to its disposal services of consultants of international repute… It will be a concern from FY13 onwards once CSM revenues increase considerably and not now…
You and other members of the forum feel free to ask any query you have…
Rgds.
…
_Crystal Crop Protection Raises Rs 150Cr From Everstone Capital_
Delhi-based Crystal Crop Protection has manufacturing facilities in Jammu and Haryana and employs 600 people.
Private equity firm Everstone Capital has invested Rs 150 crore in Crystal Crop Protection Pvt Ltd, a Delhi-based manufacturer of crop protection chemicals, the firm announced on Wednesday.
Headquartered in Delhi, Crystal Crop Production is engaged in the business of pesticide formulations, products like fungicides, insecticides, herbicides, seeds besides agri-equipment such as spray pumps among other categories. Founded by first generation entrepreneur NK Aggarwal in 1983, the agro- chemical company is now run actively by his son Ankur Aggarwal who spearheads the operations.
The firm has manufacturing facilities in Jammu and Haryana and employs 600 people.
The capital raised will be primarily used to help Crystal further consolidate its position in the Indian market, strengthen its presence in the international markets, enhance its existing product portfolio, and explore inorganic growth opportunities in India and abroad, the firm said on Wednesday.
aIndia has the largest area under cultivation for many crops but productivity is significantly lower than world averages a with increased industrialisation and urbanisation, productivity improvements are a necessity to meet Indiaas food requirements. Crystal is well positioned to take advantage of this requirement and has an attractive business model backed by a respectable management team that can build Crystal into one of India’s foremost crop protection and agri-services Company,a said Dhanpal Jhaveri, partner and CEO, Everstone Capital.
Everstone Capital that manages over $1.5 billion in capital, across two PE funds, one real estate fund and one industrial warehousing fund, was co-founded by Sameer Sain and Atul Kapur who remain the firmas managing partners. It recently closed a $580 million PE fund for the Indian market.
**_
Somehow results of quite a few other pesticide co’s don’t seem to be affected by the weather in q2. Insecticides India, Dhanuka posted quite robust no’s. So is it due to weather patterns in specific states where PI gets their maximum revenues ?
Disclosure: I’ve exited PI Industries for now.
__
The_**
When you look at Agri companies you can’t compare them qrtr. to qrtr. but you need to compare them season to season and for that there are two croping seasons viz. Kharif and Rabi… You need to look at how a company has performed in a particular season and then compare it asto how its peers have performed in that particular season to assess whether the company you are interested inis better than its peers or not… Now, if you look closely at the results announced by agrichem cos. then you will find that PI has outperformed all its peers in terms of revenue growth in kharif season… Lets take here the example of the two cos. you have mentioned viz., Dhanuka & Insecticides… Dhanuka grew in Kharif season by 15 % while Insecticides grew by 26 %… PI outperformed both by growing at 35 % in kharif season and while doing that it surpassed the size of Dhanuka this time and has reduced the gap with Insecticides (from last year’s 17 % to this year 11 %)…Hence, to say that other cos. performed well and Pi has not performed will be totally wrong… Its just that because of the two product launches in Q2, Pi took a one-time hit on profitability and I don’t see this atall as a concern but an opportunity to enter…
Rgds.