IPLNSEJuly 21, 2022

India Pesticides Limited

8,486words

196turns

11analyst exchanges

0executives

Key numbers — 40 extracted

27.4%

g presentation uploaded on the exchanges and our website. During the quarter, our revenue grew by 27.4% supported by increased demand of our existing products and new products launches. The ongoing glob

INR 70 crore

acility, which are proposed to be used for herbicide technical and intermediates. Capex outflow of INR 70 crore as planned for FY23 is progressing well. 2 | Result Update: Q1 and FY2023 India Pes

INR 221 crore

d raw material management. Taking you through the financial highlights, the total revenue stood at INR 221 crore as against INR 174 crore in Q1 financial year 22. That is YoY growth of 27.4%. EBITDA in Q1 FY 23

INR 174 crore

. Taking you through the financial highlights, the total revenue stood at INR 221 crore as against INR 174 crore in Q1 financial year 22. That is YoY growth of 27.4%. EBITDA in Q1 FY 23 stands at INR 59 crore, E

INR 59 crore

t INR 174 crore in Q1 financial year 22. That is YoY growth of 27.4%. EBITDA in Q1 FY 23 stands at INR 59 crore, EBITDA margin was 26.6% in Q1 FY 23. The PAT stood at INR 41 crore in Q1 FY 23, as compared to I

26.6%

year 22. That is YoY growth of 27.4%. EBITDA in Q1 FY 23 stands at INR 59 crore, EBITDA margin was 26.6% in Q1 FY 23. The PAT stood at INR 41 crore in Q1 FY 23, as compared to INR 42 crore in Q1 FY22. P

INR 41 crore

EBITDA in Q1 FY 23 stands at INR 59 crore, EBITDA margin was 26.6% in Q1 FY 23. The PAT stood at INR 41 crore in Q1 FY 23, as compared to INR 42 crore in Q1 FY22. PAT margin was 18.5% in Q1 FY23. The revenue

INR 42 crore

e, EBITDA margin was 26.6% in Q1 FY 23. The PAT stood at INR 41 crore in Q1 FY 23, as compared to INR 42 crore in Q1 FY22. PAT margin was 18.5% in Q1 FY23. The revenue from export stood at INR 101 crore as com

18.5%

The PAT stood at INR 41 crore in Q1 FY 23, as compared to INR 42 crore in Q1 FY22. PAT margin was 18.5% in Q1 FY23. The revenue from export stood at INR 101 crore as compared to INR 64 crore in Q1 FY22,

INR 101 crore

ared to INR 42 crore in Q1 FY22. PAT margin was 18.5% in Q1 FY23. The revenue from export stood at INR 101 crore as compared to INR 64 crore in Q1 FY22, domestic revenue stood at INR 118 crore as compared to INR

INR 64 crore

22. PAT margin was 18.5% in Q1 FY23. The revenue from export stood at INR 101 crore as compared to INR 64 crore in Q1 FY22, domestic revenue stood at INR 118 crore as compared to INR 106 crore in Q1 FY22. Reve

INR 118 crore

om export stood at INR 101 crore as compared to INR 64 crore in Q1 FY22, domestic revenue stood at INR 118 crore as compared to INR 106 crore in Q1 FY22. Revenue from technical and formulation stood at INR 170 c

Guidance — 20 items

D. K. Jain

opening

“This will be manufactured in our existing facility at Sandila plant, which will further safeguard us from any supply chain challenge of the intermediate, which is largely imported.”

D. K. Jain

opening

“We anticipate a good market potential for this product.”

D. K. Jain

opening

“The manufacturing process was developed in the industry by our R&D and project engineering teams.”

D. K. Jain

opening

“Our team is continuously working on developing chemicals from basic stages and process for the same to reduce the impact of such situation on our ability to produce chemicals going forward.”

S.P. Gupta

opening

“During the quarter, we launched six molecule in Q1 FY23 and as part of our earlier announced medium-term strategy of launching eight new molecules.”

D.K. Jain

“So taking the first question, we are adding the capacities for the new molecules and we see a lot of demand for these and presently these molecules are largely imported, there are very few manufacturers in India, so we have included that as our expansion model and there is very good demand of these products, not only in India, even for exports, and there will be multiple customers for this.”

S.P. Gupta

“Value wise, the amount of increase will be around INR 4.5 crore for this quarter.”

D. K. Jain

“And we are getting stabilized no, so next year it will contribute more.”

D. K. Jain

“For the remaining here we have got two more products apart from Pretilachlor there are two more products which we are adding and the block for these are under construction, which we will be adding, one we will be adding most probably by next month and another one we will be adding say by January.”

D. K. Jain

“Okay, sir other than this whatever the capacities you have mentioned now, do we have any plan to come up with multipurpose plant at Sandila itself?”

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Risks & concerns — 6 flagged

This will be manufactured in our existing facility at Sandila plant, which will further safeguard us from any supply chain challenge of the intermediate, which is largely imported.

— D. K. Jain

Our team is continuously working on developing chemicals from basic stages and process for the same to reduce the impact of such situation on our ability to produce chemicals going forward.

— D. K. Jain

So, given the decline in commodity prices, can we expect gross margins to improve from here and are we taking any price increase going forward?

— Yogesh Tiwari

So, did you see any impact of the delayed monsoon and will we pick up in Q2?

— S.P. Gupta

So what I understand is like there was no impact of the delayed monsoon in Q1?

— Yogesh Tiwari

Sir, the growth rate exactly is very difficult to tell, but what we can understand that two years back there was good demand, last year there was some overstocking of the material in that country and now this problem is resolved.

— Yogansh Jaiswani

Q&A — 11 exchanges

Yes, thank you for the opportunity. My question was that since you are increasing the capacity of technical, I wanted to understand the demand scenario or if you could guide us with a growth rate of your customers or formulators and innovators, and are they increasing capacity? That is one. Second, as a supplier, where does IPL stand? I mean, are we in the top 5 or 10 to these formulators or we are just among many other suppliers and three would be, since I believe we are already operating at peak capacity so post the expansion of technical capacity can we see any new client addition going ahe

Noel Fernandes

Also, if you could quantify, I mean, on your customer end, are they building any capacity or any growth rate that you could mention globally, your global customer? Yes, we are always in discussion with our customers. They indicate us their increased requirements and accordingly we increase the capacity of our product in the plant. So we are always in relationship with them and there is a continuous dialogue between both of us. Got it, sir, and you also mentioned that the energy cost was high. So if you could tell us in percentage terms on quarter on quarter? 3 | Result Update: Q1 and FY2023 In

Hello, am I audible?

Management

Sir, good afternoon. Congratulations on good set numbers, kudos and convey our appreciation to the R&D team, having coming out with such a good performance molecule.

D. K. Jain

Thank you. Sir, my first question is, continuation of what the earlier participant asked about the demand scenario. Sir, you have mentioned about the new molecules where these are all imported products, so you are able to replace them. Now we are hearing lot of news about onset of recession in US and Europe. So for the existing molecules, what you've already tied up, are you seeing any drop in demand or customers coming back and requesting you to reduce the quantity? Something like that? No, sir, we are not getting any such requests from any of our customers across the world. On the other hand

Okay, sir, I just wanted to understand now you mentioned in your opening remark we were confident to continue our growth trajectory, so what is the trajectory we are looking at, is it 25-30% revenue growth, that's what we are looking at going forward?

D. K. Jain

Yes, sir. That's what we have already indicated, even during our last call that we would like to increase our revenues at the rate of 20- 25%. Okay, and what margin? For now the present margins will continue more or less, maybe one or two points here and there, but more or less in the same range. Okay and this growth will largely be driven by these two new products that we are adding, right. Two more products this year at the existing site and as I told earlier that we have got a new site, the work is going on that new site also. So, we would be adding new products at our new site at Hamirpur

Hi sir. Good afternoon. Thank you for taking my question. So I just wanted to understand, in the Sandila Capex that we're doing of INR 70 crore this is the 2000 that has already come on stream and another 4,000 that will come in two phases, is that correct?

D. K. Jain

Yes, correct. Okay, and we are expecting all of this to be utilized within this year only. Yes, these capacities will get commissioned, and the full inclination will come within the next year. Okay, so this growth of 20-25% that you were talking about, is that for 23, 24, or are we saying over 2-3 years it is the growth we're targeting? No, growth we are targeting madam for the coming 3-4 years, 5 years because this site now is more or less full with this additional capacities are 4,000 tons our Sandila site will be fully occupied. So we already have started as mentioned earlier, we have a new

Good afternoon, sir, am I audible?

D. K. Jain

Yes, sir. Sir, first of all, congratulations to the whole management for a great track recording performance. It's great to see the numbers that we have been posting. Sir, I have two questions. Sir, one, as we 7 | Result Update: Q1 and FY2023 India Pesticides Limited Q1 and FY2023 Results Update understand about the company we have done so well because we have few products in which we are the leaders and some of the products we are perhaps just 2-3 players in India, and now we are increasing the product basket. So what I would want to understand is that the new products that we are bringing, w

Yes, hi sir, thanks for the opportunity. I actually have only one question. So just wanted to check what was the overall capacity in utilization during this quarter, last quarter and 1Q FY22?

S.P.Gupta

The capacity utilization this quarter was around 80%. 8 | Result Update: Q1 and FY2023 India Pesticides Limited Q1 and FY2023 Results Update And what was the capacity? Because I think there was some confusion earlier in the remarks it was highlighted that it was around 24,000, but then I think it was said 23,500, so what was the overall capacity this quarter? It was 23,500 ton at the end of the quarter and capacity utilization is around 80%. Okay and can you give the similar number for the last quarter? Our volume actually increased by 21% this quarter, so earlier the capacity utilization was

In the last two con calls, the managers highlighted that one of the herbicides products has inventory issue in Australia. So, I just want to know what is the status on the product and what is the revenue contribution from the product in Q1 FY23?

D.K.Jain

No, the situation has improved now, and we are getting continuous orders for that product. Yes, revenue contribution in Q1? In Q1 contribution. It will be around 15%. Of total revenue? Total revenue. Okay, sir, that’s it from my side. Thank you, sir.

Thanks for the opportunity, sir. Congratulations on a good set of numbers, sir, could you throw some light on the growth that we are seeing in our old products like Folpet, Captan Prosulfocarb, in terms of globally what is the growth in these products?

D.K.Jain

So globally there is growth in the fungicide market because some of the fungicides are getting banned, especially in Europe. So, these molecules are finding as an alternative to the banned products. So, there is an increased demand from our customers to supply more of these and we see in the coming years also slowly the volume would increase. Okay, and sir, for example, in prosulfocarb, I think that is one of our key products and we also have a dominant market share in that, so are we also seeing any more competition coming in in these 14 | Result Update: Q1 and FY2023 India Pesticides Limited

Thank you once again.

Management

SP Gupta Chief Financial Officer Investor@indiapesticideslimited.com +91 522 265 3602 Bijay Sharma / Ashok Negi Churchgate Partners ipl@churchgatepartners.com +91 22 6169 5988 India Pesticides Limited Water Works Road, Aishbagh, Lucknow-226 004, Uttar Pradesh, India www.indiapesticideslimited.com

Safe Harbour

Certain statements in this presentation concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The company's results may be affected by factors including, but not limited to, the risks and uncertainties in research and development; competitive developments; regulatory actions; the extent and duration of the effects of the COVID-19 pandemic; litigation and investigations; business development transactions; economic conditions; and

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Speaking time

D. K. Jain

D.K.Jain

S.P. Gupta

Gagan Thareja

Moderator

Rajesh Jain

Bhavin Chedda

Yogansh Jaiswani

Deepak Poddar

Noel Fernandes

Opening remarks

Tejas Sonawane

On behalf of Dolat Capital, I would like to thank the management of India. Pesticides Limited for giving us the opportunity to host their Q1 FY23 Earnings Call. From the management team we have with us today, Mr. Anand Swarup Agarwal, Chairman, Mr. D. K. Jain, CEO and Mr. S. P. Gupta, the CFO. Without further ado, I would like to hand over the call to the management for their opening remarks post which we can open the floor for a Q&A session. Thank you and over to you, sir.

D. K. Jain

Thank you, Mr. Tejas. Good afternoon, ladies and gentlemen. I hope you and your family are staying safe and healthy. I take the pleasure of welcoming you all for the Q1 FY23 Earnings Conference Call of India Pesticides. I hope you all had the chance to look at the financial statements and earning presentation uploaded on the exchanges and our website. During the quarter, our revenue grew by 27.4% supported by increased demand of our existing products and new products launches. The ongoing global uncertainties had an impact on raw material prices during the quarter and increased energy costs. We launched first phase of our backward integration of Pretilachlor technical of 2000 tons per annum capacity during Q1 FY23. This will be manufactured in our existing facility at Sandila plant, which will further safeguard us from any supply chain challenge of the intermediate, which is largely imported. We are planning to expand it further in the current fiscal year. The primary application of th

S.P. Gupta

We remain committed to deliver continuous, sustainable long-term growth with R&D at the core leading to continuous innovations in product as well as processes. For this R&D, I would like to add that we have added two more, very senior scientists of India fame in our team. With this, I would like to pass on to our CFO, Mr. S. P. Gupta to walk us through our financial highlights. Thank you so much. Thank you, sir. Good afternoon, ladies and gentlemen, and thank you for joining the India Pesticides Conference Call to discuss Q1 financial year 23 results. India Pesticides margin and profitability continued to remain strong with our efficient asset utilization, efficient process and raw material management. Taking you through the financial highlights, the total revenue stood at INR 221 crore as against INR 174 crore in Q1 financial year 22. That is YoY growth of 27.4%. EBITDA in Q1 FY 23 stands at INR 59 crore, EBITDA margin was 26.6% in Q1 FY 23. The PAT stood at INR 41 crore in Q1 FY 23,

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