Insecticides India Q1 sales up 22%

By CnAgri2012-08-16 19:29:18 Print Insecticides India reported a healthy performance in the first quarter of FY13. The company’s sales increased to Rs 160.48 crore in the quarter ended June against Rs 129.5 crore in the corresponding quarter last fiscal. The company also registered 29% PAT growth in the first quarter of the current fiscal year.

In an interview with CNBC-TV18, Rajesh Agarwal, CMD of Insecticides India attributes this growth to the launch of new brands and collaborations with American and Japanese companies. The company has started production in its Dahej unit, giving a boost to its overall capacity.

Insecticides India is now eyeing 40% growth with high expectations from Q2. The company also expects to hit sales of Rs 500 crore by the second quarter, informed the CMD.

Q: Could you give us your numbers on your sales, EBITDA and the profit performance this time around?

A: The first quarter has been quite good. If I compare on a QoQ basis from last year, we had sales of Rs 129.5 crore last year and this year it has increased to Rs 160.48 crore. It means there is a 22% jump in sales. If I look at EBITDA margins, there is a 64% increase from Rs 12.30 crore to Rs 19.50 crore. Coming down to PAT, it has grown from Rs 9 crore to roughly Rs 11.72 crore, showing a growth of about 29%.

Q: To what do you owe this improvement? Is this something you can sustain considering the rains have not been as good as they should be?

A: It is true that the rains are not that good and the situation is very difficult. But, this year we have had some major achievements due to which we were able to register this growth.

First is the introduction of new brands with the help of collaborations. We signed two collaborations this year, one with the American company called American Vanguard and the other is with a company called Japan Nissan Chemical Industries. We have launched two products of these companies. These three products have supported our margins.

Secondly, we have started production in our Dahej unit in Gujarat and a lot of backward integration has taken place. It has increased the production capacity for technical products as well as brands. So these collaborations, new product launches and backward integration have helped us to grow this year.

Q: What will your margins be, you did about 10.5% last time around and what would your EBITDA margins be now and by the end of the year because you have done backward integration?

A: We have a target to increase EBITDA margin by 2.5 to 3%. I believe we have been quite successful in doing that because on absolute terms it is showing increase of roughly 64% which translates into 2.5-3% in EBITDA margins on the basis of sales. I believe we have been very successful in doing that.

Q: What about some fund raising, we understand that you are planning to dilute equity and raising about Rs 100 crore, can you take us through why and when and how much?

A: It is taking some time because market is not encouraging. We are not in a hurry and I believe by the end of this quarter we should show a good performance because we are planning good increase this year, roughly 40% plus growth. I have high expectations from Q2.

I think a reasonable part of the growth should come during this quarter, though the climate condition is very dry. It is a huge struggle but, I still believe that we should be roughly somewhere around Rs 500 crore by the end of Q2. That means we will be nearing last year's sale figure of Rs 554 crore. I believe after we finish Q2, we go to the market and that would be the right time.

Q: What is this Rs 550 crore, do you expect to hit sales of Rs 550 crore by September 30 or are you referring to something else?

A: Rs 554 crore was the sale which we did in the whole of last year and this year we will be reaching somewhere near Rs 500 crore, by the end of this quarter i.e Q2. I believe, in the first half itself we will be reaching close to what we did last year.