Sharda Cropchem Limited has informed the Exchange about Investor Presentation
24th January, 2024
To,
National Stock Exchange of India Limited Exchange Plaza, 5th Floor, Plot No. C/1, G-Block, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051
BSE Limited Phiroze Jeejeebhoi Tower, Dalal Street, Mumbai – 400 001
Trading Symbol: SHARDACROP
Scrip Code: 538666
Subject: Investors / Analyst’s Presentation for the quarter and nine months ended 31st December, 2023
Dear Sir/Madam,
Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), we are enclosing herewith the presentation to be made to the Investors/Analysts on the Financial Results of the Company for the quarter & nine months ended 31st December, 2023.
The presentation is also being uploaded on the website of the Company the Listing www.shardacropchem.com Regulations.
in accordance with Regulation 46 of
We request you to take the same on record.
Yours Sincerely,
__________________ Jetkin Gudhka Company Secretary & Compliance Officer
Encl.: As above
Investor Presentation January 2024
Safe Harbor
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sharda Cropchem Limited (the “Company”), have been prepared solely for
information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection
with any contract or binding commitment what so ever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed
information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty,
express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This
Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this
Presentation is expressly excluded
Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively
forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions
that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets,
the performance of the industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion,
technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as
other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation.
The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties
included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.
2
About Sharda Cropchem Limited
“We are a fast-growing global agrochemicals company with a peer position in the generic crop protection chemicals industry. Our vast and growing library of dossiers and IPRs provide us solid foundations for growth in the global marketplace, especially in Advanced Markets such as Europe, North America and Latin America. It equips us with the ability to operate in a diversified range of formulations and generic active ingredients space globally”
Agrochemical Focused Company
Intellectual Property (IP) driven company engaged in marketing and distribution of wide range formulations and generic active ingredients
Asset Light Business Model
Efficiently channelizing time and resources for strengthening core competency of identifying generic molecules and registration opportunities which offer scalable growth with limited capital requirements
Large Pipeline of Registrations*
Procured 2,901 registrations. Additionally, it has filed 1,075 applications for registrations globally pending at different stages
Diversified Sourcing Arrangements
Enduring relationship with multiple manufacturers and formulators enables to source and supply formulations or generic active ingredients at competitive prices
Consistently Increasing Global Presence
With diversified range of product portfolio, Company has grown by expanding business operations in 80+ countries, across Europe, NAFTA, Latin America and ROW
Widespread Distribution Network
Presence in the entire agrochemical value chain with 525 third party distributors and 500+ sales force serving the Company’s esteemed clientele in 80+ countries
Company’s apt domain knowledge and experience gives substantial competitive advantage for expanding business in existing markets and new geographies
*As on 31st December 2023
5
Asset Light Business Model
Overall Agrochemical Value Chain
Sharda’s Operating Area
√
√
√
√
Basic & Applied Research
Identification
Registration
Active Ingredient Manufacturing
Formulation & Packaging
Marketing & Distribution
SHARDA CROPCHEM’s ASSET LIGHT BUSINESS MODEL
Focus on identification of generic molecules, preparing dossiers, seeking registrations, marketing & distributing formulations through third-party distributors and/or own sales force
Manufacturing of AIs and formulations is outsourced
Highly flexible operating model resulting in • Overall cost competitiveness
• Efficient management of fluctuating market
demand across various geographies
• Offering wide range of formulations and AIs
Acts as a key differentiator from an innovator company, allowing the Company to save its capital, time and resources on R&D
6
Increasing Global Presence having a Widespread Distribution
Presence 80+ countries
across Europe, NAFTA, LATAM & RoW
Global Resource Deployment 500+
Over the years, we’ve built a strong brand franchise within our global markets; we are benefiting through the economies of scale in our portfolio and leveraging value of our supply chain to deliver value to our customers across geographies
Company has gained a great deal from globalization, including new customers and diverse geocentric revenue streams. Over the years, we have mastered flexibility and adopted innovative ways to grow our business overseas
Distributors 525+
CAPEX incurred in 9MFY24* Rs. 276 Cr.
In addition to newer markets, the wide global presence has allowed us to find new, specialised sales and local marketing talent.
Successfully adopted a factory-to- farmer approach to become a one- stop solution provider to our global customers
* Plus related revenue expenditure on registrations
Strengthening and widening the sales force in Europe, USA, Canada, Mexico, Colombia, South Africa, India, and rest of the world, in addition to third party distributors with a goal to enhance its presence in the agrochemical value chain
It enables the Company to penetrate its formulations and generic active ingredients in various countries backed by the third-party distributors and presence of its own sales force
7
The Sharda Advantage
THE SHARDA ADVANTAGE
Global Reach
Wide Product Range
Healthy relationships with suppliers
Quality with Affordability
Faster Sales Service
One Stop Solution Provider for Crop Care Products
8
Way Forward
Forward Integration - Build Sales Force
Expand & Strengthen Distribution Presence
➢ Leverage market presence and execution capabilities
➢ Expand geographical reach using existing library of
➢ Adopt the factory to farmer approach and be a one stop
solution provider
➢ Strategy on ground in different regions of NAFTA, Europe, LATAM and other key markets in ROW
dossiers
➢ Two-fold strategy of further penetrating existing markets
and entering new markets
Continual Investment in Product Registrations
Focus on Operational Efficiencies
➢ Continue to identify generic molecules going off patent
➢ Accelerated focus on revenue generating investments
➢ Investing in preparing dossiers and seeking registrations
➢ Margin improvements
in own name
➢ Better cost management and eliminate NVAs
9
Industry Outlook and Growth Drivers
Global crop protection chemicals market value (In Billion USD) – CAGR of 3.5%
59.7
8.1
42.0
62.8
77.0
43.7
53.0
5.3
2020
3.9
0.5
8.4
5.9
4.3
0.6
2025e
10.2
7.7
5.4
0.8
2030e
Herbicide
Fungicide
Insecticide
Nematicide
Molluscicide
INDUSTRY DRIVERS
1
2
3
A growing population: the global population is set to increase by 1.2 billion by 2030 and 2 billion by 2050, while the middle class will more than double to 4.9 billion by 2030
A growing middle class fuels demand for increased food and protein production, which in turn drives demand for grain to support growth
Fewer arable acres per capita means that products need to continue to maximise farmer yields; arable land is expected to decrease from half an acre per person today to less than one- third of an acre per person by 2050
Primary Research, Secondary Research, Magna Information Centre
10
Experienced Management
Mr. Ramprakash V. Bubna Chairman & Managing Director
Mr. Ashish Bubna Whole Time Director
Mr. Manish Bubna Whole Time Director
•
•
•
Holds a Bachelor’s Degree of Technology in Chemical Engineering from IIT, Bombay
He has over 55 years of experience in chemicals, agrochemicals and related businesses
He is responsible for the Company’s overall business operations and strategy
•
•
•
•
Holds a Bachelor’s Degree in Commerce from the University of Mumbai
Over 32 years of experience in marketing of chemicals, agrochemicals and related businesses.
Instrumental in strategizing early investment in product registrations and building the library of product dossiers.
Responsible for marketing, procurement, registrations and logistics functions of the agrochemical business.
•
•
•
•
Holds a Bachelor’s Degree in Chemical Engineering from the Department of Chemical Technology, Bombay University.
Over 30 years of experience in chemicals, agrochemicals and related businesses
Spearheaded the Company’s foray into the conveyor belt and general chemicals business
Also oversees the information technology, logistics and documentation functions of the Company
11
Q3 FY24 Financial Highlights
Q3 FY24: Segment Wise Highlights
Cr.
Agrochemical Segment
Non-Agrochemical Segment
TOTAL REVENUES
83%
842
80%
508
17%
175
20%
% of Revenue
100%
100%
124
1,017
632
Q3FY23
Q3FY24
Q3FY23
Q3FY24
Q3FY23
Q3FY24
-40%
-29%
-38%
On Consolidated Basis
13
Q3 FY24: Product Wise Highlights (Agrochemical Segment)
Herbicides
Insecticides
Fungicides
Cr.
TOTAL REVENUES (Agrochemical Segment)
59%
55%
11%
23%
30%
22%
% of Revenue
100%
100%
495
118
250
842
97
280
110
508
Q3FY23
Q3FY24
Q3FY23
Q3FY24
Q3FY23
Q3FY24
Q3FY23
Q3FY24
-43%
+21%
-56%
-40%
On Consolidated Basis
14
Q3 FY24: Region Wise Breakup (Agrochemical Segment)
Europe
NAFTA Region
38%
316
-27%
45%
231
47%
396
-54%
36%
184
Q3FY23
Q3FY24
Q3FY23
Q3FY24
LATAM Region
6%
50
-33%
7%
34
RoW
-26%
9%
80
12%
59
Q3FY23
Q3FY24
Q3FY23
Q3FY24
% of Revenue
Cr.
TOTAL REVENUES (Agrochemical Segment)
842
508
Q3FY23
Q3FY24
-40%
On Consolidated Basis
15
Q3 FY24: Region Wise Breakup (Non Agrochemical Segment)
Europe
NAFTA Region
14%
26
-5%
20%
24
66%
115
-36%
60%
75
Q3FY23
Q3FY24
Q3FY23
Q3FY24
LATAM Region
5%
8
-17%
6%
7
RoW
-30%
15%
26
14%
18
Q3FY23
Q3FY24
Q3FY23
Q3FY24
% of Revenue
Cr.
TOTAL REVENUES (Non - Agrochemical Segment)
175
124
Q3FY23
Q3FY24
-29%
On Consolidated Basis
16
Q3 FY24: Financial Highlights
Revenues & GP Margin
EBITDA
Profit After Tax
30.5%
1,017
26.2%
632
197
Increased other expenses are related to strengthening of global workforce to support future growth
108
Q3FY23
Q3FY24
Q3FY23
Q3FY24
Q3FY23
5
Q3FY24
47
• Overall Volumes have reduced by 20.8% Y-o-Y in Q3 FY24
• Gross Margins reduced to 26.2% in Q3 FY24
• Agrochemicals by 21.0% Y-o-Y
• Non-Agrochemical by 15.8% Y-o-Y
• Revenues has de-grown due to
• Raw Material and Finished goods sales price have reduced
substantially. This has led to a stock revaluation as per Accounting
Policy and has impacted the GP and profitability to the tune of Rs. 7
• Weaker demand because of a drought season in Europe and
crores
adverse weather conditions in NAFTA
• Company experienced significant decrease in product price realizations
• Lower product price realizations across all regions
• The Company is seeing an improving trend in Q4 FY24
Cr.
17
9M FY24 Financial Highlights
9M FY24 Segment Wise Highlights
Cr.
Agrochemical Segment
Non Agrochemical Segment
TOTAL REVENUES
79%
2,032
77%
1,424
21%
531
23%
% of Revenue
100%
100%
427
2,563
1,851
9MFY23
9MFY24
9MFY23
9MFY24
9MFY23
9MFY24
-30%
-20%
-28%
On Consolidated Basis
19
9M FY24: Product Wise Highlights (Agrochemical Segment)
Herbicides
Insecticides
Fungicides
Cr.
TOTAL REVENUES (Agrochemical Segment)
58%
54%
16%
24%
26%
22%
% of Revenue
100%
100%
1,168
328
347
536
772
305
2,032
1,424
9MFY23
9MFY24
9MFY23
9MFY24
9MFY23
9MFY24
9MFY23
9MFY24
-34%
+6%
-43%
-30%
On Consolidated Basis
20
9M FY24: Region Wise Breakup (Agrochemical Segment)
Europe
NAFTA Region
42%
857
-21%
48%
678
40%
818
-41%
34%
484
9MFY23
9MFY24
9MFY23
9MFY24
LATAM Region
10%
197
-32%
9%
135
RoW
-20%
8%
161
9%
129
9MFY23
9MFY24
9MFY23
9MFY24
% of Revenue
Cr.
TOTAL REVENUES (Agrochemical Segment)
2,032
1,424
9MFY23
9MFY24
-30%
On Consolidated Basis
21
9M FY24: Region Wise Breakup (Non Agrochemical Segment)
Europe
NAFTA Region
22%
117
-41%
16%
69
59%
313
-22%
58%
245
9MFY23
9MFY24
9MFY23
9MFY24
LATAM Region
6%
31
-17%
6%
26
RoW
+24%
20%
87
13%
70
9MFY23
9MFY24
9MFY23
9MFY24
% of Revenue
Cr.
TOTAL REVENUES (Non - Agrochemical Segment)
531
427
9MFY23
9MFY24
-20%
On Consolidated Basis
22
9M FY24: Financial Highlights
Revenues & GP Margin
EBITDA
Profit After Tax
28.0%
2,563
19.8%
1,851
401
Increased other expenses are related to strengthening of global workforce to support future growth
143
9MFY23
9MFY24
9MFY23
19
9MFY24
9MFY23
-112 9MFY24
• Overall Volumes have reduced by 6.6% Y-o-Y in 9M FY24
• Gross Margins reduced to 19.8% in 9M FY24
• Agrochemicals by 7.0% Y-o-Y
• Non-Agrochemical by 1.3% Y-o-Y
• Revenues has de-grown due to
• Weaker demand scenario in Europe and LATAM
• Lower product price realizations across all regions
• Raw Material and Finished goods sales price have reduced
substantially. This has led to a stock revaluation as per Accounting
Policy and has impacted the GP and profitability to the tune of Rs. 91
crores
• Company experienced significant decrease in product price realizations
• The Company is seeing an improving trend in Q4 FY24
Cr.
23
Strong Balance Sheet
Working Capital (in Days)
RoCE
RoE
87 days
131 days
25.7%
19.8%
20.8%
16.5%
119
103
103
144
134
121
Mar-22
Mar-23
Mar-22
Mar-23
Total Equity
Cash & Cash Equivalents
Total Debt
Dec-22
Dec-23
Inventory Days
Recievable Days
Creditor Days
Rs. 2,097 crores
Rs. 370 crores
Rs. 2 crores
Rs. 2,232 crores as on Mar’23
Rs. 328 crores as on Mar’23
Rs. 3 crores as on Mar’23
ROE: PAT/Avg. Equity, ROCE: EBIT/Avg. Capital Employed [(Capital Employed = Equity + Total Debt)]
On Consolidated Basis
24
Annexure
Q3 & 9M FY24 Financial Highlights
Particulars
Revenue from Operations
COGS
Gross Profit
Gross Margin %
Employee Expenses
Other Expenses
EBITDA*
EBITDA Margin %
Forex (Gain)/Loss
Depreciation
Other Income
EBIT
EBIT Margin %
Finance Cost
PBT
PBT Margin %
Tax Expense
PAT
PAT Margin %
Earnings Per Share (EPS) In Rs.
Q3 FY24
632.5
466.9
165.6
26.2%
9.4
109.6
47.2
7.5%
-22.8
68.6
12.2
13.0
2.1%
0.9
12.1
1.9%
7.5
4.6
0.7%
0.51
Q3 FY23
1,017.3
707.3
310.0
30.5%
12.6
102.8
196.7
19.3%
-12.4
65.3
2.7
144.3
14.2%
0.9
143.4
14.1%
35.0
108.4
10.7%
12.01
Y-o-Y
-38%
-47%
-76%
-91%
-92%
-96%
9M FY24
1,851.0
1,484.1
9M FY23
2,563.3
1,846.9
366.8
19.8%
27.7
326.3
18.8
1.0%
-18.6
212.9
61.8
-119.7
-6.5%
6.8
-126.5
-6.8%
-15.0
-111.6
-6.0%
-12.37
716.5
28.0%
29.6
292.5
400.8
15.6%
69.5
180.5
33.2
177.6
6.9%
2.0
175.6
6.9%
32.5
143.1
5.6%
15.86
Cr.
Y-o-Y
-28%
-49%
-95%
NA
NA
NA
* EBITDA is excluding IA & IAUD write-off (Rs. 0.5 cr. in Q3 FY24; Rs. 2.2 cr. in Q3 FY23 ; Rs. 6.0 cr. in 9M FY24; Rs. 6.5 cr. in 9M FY23)
On Consolidated Basis
26
Key Financial Performance Indices
Cr.
Revenue
EBITDA & EBITDA Margin*
Profit After Tax & PAT Margin
3,580
4,045
1,998
2,003
2,396
20.7%
18.5%
17.6%
19.0%
17.6%
11.2%
8.8%
8.2%
9.8%
8.5%
369
352
455
176
165
229
729
713
349
342
FY19
FY20
FY21
FY22
FY23
FY19
FY20
FY21
FY22
FY23
FY19
FY20
FY21
FY22
FY23
RoCE
RoE
Net Cash & Cash Equivalents^
25.7%
20.2%
20.8%
18.8%
13.9%
14.6%
12.3%
15.2%
19.8%
16.5%
336
269
276
262
325
FY19
FY20
FY21
FY22
FY23
FY19
FY20
FY21
FY22
FY23
FY19
FY20
FY21
FY22
FY23
* EBITDA is excluding IA & IAUD write-off
^ Total Cash & Cash Equivalents – Debt (Includes FDs of Rs. 114 crores clubbed in Non Current Other Financial Assets)
On Consolidated Basis
27
Historical Profit & Loss
Particulars
Revenue from Operations
COGS
Gross Profit
Gross Margin %
Employee Expenses
Other Expenses
EBITDA*
EBITDA Margin %
Forex (Gain)/Loss
Depreciation
Other Income
EBIT
EBIT Margin %
Finance Cost
PBT
Tax Expense
PAT
PAT Margin %
Earnings Per Share (EPS) In Rs.
* EBITDA is excluding IA & IAUD write-off
FY23
4,045.2
2,860.8
1,184.4
29.3%
44.8
438.9
712.6
17.6%
57.6
248.1
40.3
435.3
10.8%
4.5
430.7
88.8
342.0
8.5%
37.90
FY22
3,579.8
2,499.8
1,080.0
30.2%
44.2
336.4
728.6
20.4%
16.5
245.3
28.9
466.5
13.0%
2.2
464.2
115.0
349.3
9.8%
38.71
FY21
2,395.6
1,636.0
759.7
31.7%
37.3
305.5
455.2
19.0%
-19.9
170.4
45.9
312.2
13.0%
2.8
309.5
80.2
229.2
9.6%
25.40
FY20
2,003.0
1,388.8
614.3
30.7%
34.9
282.4
351.7
17.6%
15.1
137.1
42.1
186.8
9.3%
1.9
184.9
20.2
164.7
8.2%
18.25
Cr.
FY19
1,997.6
1,387.3
610.2
30.5%
33.5
250.1
368.8
18.5%
4.5
99.4
20.6
243.4
12.2%
8.4
235.0
58.7
176.3
8.8%
19.55
On Consolidated Basis
28
Balance Sheet – Equity & Liabilities
Equities & Liabilities Shareholder's Funds Equity and Share Capital Other Equity Non-controlling Interest Total Equity
Non-Current Liabilities Borrowings Trade Payables Lease Liabilities Other Financial Liabilities Provisions Deferred Tax Liabilities (net) Total Non-Current Liabilities
Current Liabilities Borrowings Lease Liabilities Trade Payables Other Financial Liabilities Other Current Liabilities Current Tax Liabilities Provisions Total Current Liabilities Total Equity & Liabilities
FY23
90.2 2141.8 0.4 2,232.4
- - - 1.7 2.7 143.4 147.9
3.0 - 1,377.6 431.4 78.1 19.1 61.4 1,970.6 4,350.8
FY22
90.2 1,822.2 0.3 1,912.8
- 2.4 3.5 1.6 2.3 128.9 138.6
38.0 5.1 1,177.6 324.8 55.4 4.2 86.7 1,691.8 3,743.1
FY21
90.2 1,524.1 0.3 1,614.6
- 2.4 8.4 3.2 3.0 92.9 109.9
67.8 4.5 806.8 149.1 58.0 3.2 50.0 1,139.4 2,863.9
FY20
90.2 1,312.6 0.3 1,403.1
0.1 2.4 - 13.1 2.7 69.3 87.5
0.0 - 686.7 89.7 54.4 1.5 24.4 856.7 2,347.2
Cr.
FY19
90.2 1,193.7 0.2 1,284.1
0.1 2.9 - 1.4 2.2 91.0 97.6
0.0 - 636.2 104.0 60.7 0.6 20.1 821.7 2,203.3
On Consolidated Basis
29
Balance Sheet - Assets
ASSETS
Assets
Non-Current Assets
Property, Plant and Equipment
Goodwill
Other Intangible assets
Intangible assets under development
Deferred Tax Assets (net)
Non-Current Tax Assets
Other financial assets
Total Non-Current Assets
Current Assets
Inventories
Investments
Trade Receivables
Cash & Cash equivalents
Other Bank balances
Loans
Other Financial Assets
Other Current Assets
Total Current Assets
Total Assets
FY23
FY22
FY21
FY20
FY19
Cr.
5.0
0.0
663.0
203.9
7.9
72.3
140.6
1,092.7
1,134.3
31.9
1,833.3
176.4
5.5
0.0
28.7
48.1
3,258.2
4,350.8
14.4
0.0
577.4
212.2
4.9
71.6
11.2
891.7
892.8
134.4
1,540.0
56.7
109.3
0.5
48.9
68.9
2,851.5
3,743.1
20.9
0.4
523.1
131.0
6.0
73.6
9.4
764.5
525.5
83.0
1,162.6
85.6
175.0
-
28.1
39.6
2,099.3
2,863.9
27.8
0.4
388.1
161.4
3.9
72.5
11.6
665.7
382.2
115.5
988.4
77.8
75.7
-
11.3
29.6
13.5
0.4
357.8
219.8
5.5
49.2
8.9
655.2
364.9
211.9
811.4
50.6
73.0
-
11.9
24.3
1,681.5
2,347.2
1,548.2
2,203.3
On Consolidated Basis
30
CSR Activities
CSR initiatives taken up by the Company are in the areas of Promoting Education, Healthcare, Eradicating Hunger, Empowerment of Women, Animal Welfare, Promotion of Sports and Rural Development Projects
Promoting Education
Animal Welfare
Medical Aid & Relief
31
THANK YOU
Company: Sharda Cropchem Limited
Investor Relation Advisors: Strategic Growth Advisors Pvt. Ltd.
CIN: L51909MH2004PLC145007
CIN: U74140MH2010PTC204285
Mr. Shailesh Mehendale – CFO Mr. Dinesh Nahar – General Manager - Finance cfo@shardaintl.com / finance@shardaintl.com Tel: +91 22 6678 2800
Mr. Deven Dhruva deven.dhruva@sgapl.net Tel: +91 98333 73300