Heranba Industries Raghuram Shetty, MD, and Raunak Shetty, ED, talks about the March quarter numbers, expansion plans in Vapi, Demand situation, current capacity utilisation levels, export orders and growth outlook for FY22. Edited Excerpts:
Q: The company has posted strong results. The numbers are good, margins have expanded on both YoY and QoQ basis. Please share the highlights of the quarter?
Raghuram Shetty: We have published the results recently and have posted good growth. In fact, the growth has been good for the last four to five years and it will continue to be strong. Revenue growth was also good and we have grown well in all the parameters. Going forward, our growth will remain good because our business has a presence in four to five segments of which 50% comes from domestic and 50% plus comes from export. In domestic, our business is present in B2B and B2C. We have a presence in 16 states with more than 8,000 dealer distributor network. Similarly in exports, we have 50 % business and there as well we are present in B2B and B2C. At the same time, we are also entering into new markets and we have got registrations in the US and Europe. We have got registration for two to three products at two to three places in Europe. Recently, we received registration for one product in the US as well. So our growth will be good in this.
Q: What is the update on Vapi expansion plans till when can we expect the plant to commercialize?
Raghuram Shetty: We have two sites in Vapi and have also got permission for a small site and it will become functional in the next two quarters and by then production will start there. So, we will have three units in Vapi and one unit at Sarigam, which is around 150 km away from Bombay, where our work for formulation of 22,000 and brands is going on in 55,000 square meters area. Secondly, work for permission is going on for 22,000 square meters and we are likely to get permission for it in the next 1-2 months. Production and CapEx work will be carried out in the facility. Similarly, we also have a second site at Saykha and there also we have an area of 9 acres and permission has been granted for it and shortly our work will be started there and the production will start there in the next one one-and-a-half year.
Q: How is the demand scenario right now? Kharif is in full swing and what impact it will have on-demand?
Raunak Shetty: Rains have been good this year, so a strong demand is coming from the ground level for the agrochemicals. Even sowing across segments have increased a lot, like in pulses and soya due to which the second quarter will be quite good in the Indian market. Similarly, globally, even though COVID is there, farming is going good due to which the push for agrochemical is going good, which will have a positive impact on the year’s result.
Q: What are the current capacity utilisation levels?
Raunak Shetty: In technical, our capacity is almost in the range of 88% but we have space and we can increase our capacity for the purposes, we continue to debottleneck. In the case of formulation, our capacity is around 55% and there is a lot of scopes and when the business of formulation increases, like in the case of Kharif or in export there is an increase in demand for formulation then we can utilize and capitalize on it.
Q: Please update about the export orders and how much revenue do you target from exports?
Raghuram Shetty: We have been focusing on export for the last two to three years and export growth has been good. Approximately, 50% of our business is in domestic and approximately 50% is in export. We have two segments in exports and they are B2C formulation and technical exports. When comes to its growth than our order book always remains full for three months. In the US, we have received registration in the recent past and also received two to three registrations in Europe and a lot of work is going on the front. Similarly, a lot of work is also happening on the R&D front and two to three of our products are coming and they are going to be an export-oriented product. Going forward, our exports will be very good.
Q: What is your growth outlook & guidance for FY22?
Raunak Shetty: We have grown at 18-20% in the last three to four years and going forward, it seems that we will continue to grow at 18-20%.
Raghuram Shetty: Growth will continue to be good and if we will compare the last year’s balance sheet with this year’s balance sheet then top revenue grew by around 28%. Similarly, if seen in other parameters, the growth has been quite good and if you compare whatever EBITDA or PAT of the last two to three years then there has been a steady growth in those. We will continue in the same range and make effort to maintain the growth of 18-20% as told by Mr Raunak.
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