Insecticide India Net Down 49%, Revenue Up 21.8% For Q3FY20

One the largest domestic agrochemical player’s in Indian market, Insecticide India reported its net profit for the quarter ended December 31, 2019 at Rs 9 crore, a decrease of 49 per cent with margins of 3.3 per cent, the company said in its communications to BSE. The company, however, recorded revenue from operations of Rs 263 crore in Q3 FY20, representing a growth of 21.8 per cent on a Year-on-Year basis. "Revenue growth was primarily driven by branded sales which grew 70 per cent on a Y-o-Y basis contributing 75 per cent to the total sales and was partially offset by decline in Institutional Sales and Exports," it said. 

“Q3 FY2020 started on a positive note for agrochemicals sector as the sowing period extended to October and demand picking up during Rabi season. There were late rains in some parts of the country, where sowing has been delayed a bit, but output in general is expected to be better due to optimum moisture content in the soil," said Rajesh Agarwal, Managing Director, Insecticide India.

Explaining the reasons for the decline in profits, Agarwal said: "The profitability for the quarter was impacted due to decline in Institutional Sales and Exports and fair valuation of inventory in this environment, further aggravated the situation. However, on a year to date basis our margins were less impacted, and we are hopeful that the profitability will improve going forward with recovery in prices is expected by end of next quarter."

For the 9-month period - April-December 2019, Insecticides India said its operating revenue increased to Rs 1,125 Crore from Rs. 993 Crore in nine month comparable period in FY19, thereby clocking a growth of 13.2 per cent on year on year basis. 

The Earnings before interest, tax, depreciation and amortization (EBITDA) for the company increased by one per cent to Rs. 158 Crore from Rs. 157 Crore in the 9-month period compared to EBITDA of same period last year. The company reported a marginal fall in Profit After Tax (PAT) to Rs. 93 Crore from Rs. 94 Crore in 9M for FY2019.

EBITDA margins declined to 14.1 per cent as compared to 15.8 per cent last year, a decrease of 180 basis points. Lower margins are due to decline in institutional sales, exports and fair valuation of inventory. Exports for the six-month period have declined to Rs.31 Crore from Rs.49 Crore, representing a decrease of 38 per cent on Y-o-Y basis. In the current quarter, company have launched three new products with total eight new products in the entire fiscal year. This has contributed Rs. 20 Crore to the net sales of the agrochemical group. Incecticide India has an overall range of 12 products that are approved under guidelines for registration of chemical pesticides 9(3) category.

Group’s maharatna category products registered a growth of 18.2 per cent y-o-y growth and the overall top-line growth is further supported by other branded products that registered an impressive  growth of 43.2 per cent, offsetting de-growth in institutional sales. It may be considered first of positive new post budget while government is getting more cautious about pesticides regulation act of India and on the other hand concentrating more on zero budget natural farming.