Excel Crop Care Ltd's Q2FY19 standalone net profit declines 7.47% yoy to Rs41.78cr

Excel Crop Care Ltd's revenue for Q2FY19 came in at Rs408.7cr, up 6.2% yoy. The operating profits of the company for the quarter stood at Rs68.3cr which declined by 5.5% yoy. The EBITDA margin contracted by ~207bps yoy in Q2FY19. The net profit after tax came in at Rs41.8cr, a decrease by 7.5% yoy.

• Gross margin has remained stable at ~36% during Q2FY19 as compared to the last year despite volatile external environment and currency fluctuations.

• However, the contraction in EBITDA margin is on account of lower operating leverage during the quarter on likely softness in the sales volumes. This is also on account of increase in other expenses by ~26% yoy to Rs57.2cr, which likely includes legal and consultancy expenses towards merger with the promoter company ‘Sumitomo Chemical India’.

• The trade receivables have increased sharply despite no significant increase in level of operations to Rs400.3cr as on September 30, 2018 vs. ~Rs248cr as on March 31, 2018. This indicates increase in the working capital days of the company during H1FY19 on account of erratic monsoons and soft crop prices.