Best Agrolife Ltd. posts excellent Q1 results; revenue jumps 77 percent, profits zoom 300 percent
Aug. 18, 2020
BSE listed Best Agrolife Ltd., a leading global player in the agrochemicals sector and one of India's largest manufacturers of agro-inputs, has announced excellent results for the quarter ended 30 June 2020. The company has in place its long term financial priorities which have a three-dimensional approach wherein the focus areas are - capital allocation, earning, and growth.
The company's Q1 FY2021 unaudited results saw the company's total revenue rose to Rs 363.04 crore from Rs 204.18 crore (Q1 FY1920), which is about a 77 percent increase. The Profit almost tripled from Rs 5.46 crore (Q1 FY1920), to Rs 16.21 crore (Q1 FY2021), while the EPS rose from Rs 6.03 (Q1 FY1920) to Rs 6.95 (Q1 FY2021).
"We have defined our objectives clearly and the company will work towards achieving the same wherein the primary focus is to accomplish sustainable EPS growth. This will be supported by incremental earnings across economic cycles. Also, we are anticipating a significant increase in ROCE and ROE which will be driven by our various initiatives," said Vimal Kumar, Managing Director, Best Agrolife Ltd., with regards to Earnings.
In terms of ROCE and ROE, the project targets are 32.78 percent and 24 percent respectively in FY22. Notably, as per projections, there is a significant increase in EPS (basic) to 30.44 and compared to 7.24 in FY20. For the Growth - approach - the company is enabling models to deliver profitable organic growth. Increase in commitment towards Research and Development and creating a strong push for its branded products.
Best Agrolife Ltd. had previously announced that it became first in India to have granted license/registration for manufacturing DIRON (DINOTEFURAN 20 percent SG), a super systematic insecticide with quick uptake and knock-down, that controls a broad spectrum of previous and invasive pests. With two formulations, it is super flexible when it comes to application. With quick action through contact and ingestion, resulting in robust pest control management. This product is an import substitute for a similar Japanese insecticide.
Currently, the company caters to several Bluechip Corporates for P2P which include UPL Ltd, Jubilant, Indo Gulf Fertilisers, Mahindra Summit Agriscience, Bharat Rasayan, etc. According to a recent survey, the estimated size of the Indian agrochemical market is USD 3 Billion, which is a positive for companies like Best Agrolife. The boost to the agro sector by the current government will increase the demand for agrochemicals and insecticides.
"Going forward, the demand for innovative products will shape the industry. We believe farmers will look to combine crop protection, seeds, digital and application technologies while fulfilling societal requirements. This will lead to an increase in revenues and profitability of companies such as Best Agrolife Ltd," said Kumar, commenting on this.
"Planning a long term strategy and to avoid conflict of interest among business segments and as a good corporate governance measure the company has decided to integrate all its businesses in a single entity in a phased manner," Kumar added. In addition, towards R&D activities, the company plans to introduce new value-added chemistries and integrated R&D facilities in the chemical zone in Gujarat.
"The company plans to add new innovative specialty molecules and improve its product basket. These initiatives will increase the percentage of value-added product offerings as well as enhance the overall margins," Kumar further said Best Agrolife is preparing to increase its Formulation plant capacity to 50000 MTPA. With regards to the Pan-India supply chain network, the plan is to increase the distribution network to 2000 plus dealers and 25 plus depots. Considering international footprints, Best Agrolife is in the process of obtaining licenses for Vietnam, Myanmar, United Kingdom, and the USA.
"This entire drive will be backed by value-added innovative products as we are planning to increase the share of value-added branded products in our product basket," Kumar further added. "We are working with a Single Point Agenda to emerge as an icon for growth, technology, and innovation and to become a significant player of the Indian Agro-Chemical Industry both in terms of turnover and margins," Kumar said while commenting on the company road map.
Best Agrolife has progressed notably and is now considered as one of the top 20 companies in India and its product portfolio comprises more than 60 active ingredients and various formulations of pesticides and plant micro-nutrients for protecting and nourishing a wide range of crops. Its product range includes insecticides, herbicides, fungicides, plant growth regulators, etc. It sells under the brand name "Best". The company has four strategically located manufacturing plants, two in Uttar Pradesh and two in J-K. These plants are well equipped with state-of-art indigenous infrastructure for the production of high-quality agrochemicals.
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