- Agriculture sector grew by 3% in india all due to good khareef season.
- Vaccination drive might prevent 2nd wave
- Govt expenditure on rural economy was commendable
- Good monsoon has resulted in higher reservoir levels
- Overall Paddy is up by 3%.
- The govt has announced additional expenditure if 65k crores in subsidies.
- Fertilizer industry: Sales volumes were down on YoY basis
- Consumption at the farm level was down by 5%
- Major raw material prices continue to be firm.
- Company gave a strong performance by continuously focusing on sales mix and better capital management
- Nutritional business had a great quarter.
- Company market share was 14.3%, up by 1%
- The capacity utlization was 80%.
- Company is focusing on increasing its capital project esp in Vizag
- Sulphuric acid plant has been successfully commissioned.
- The bio pesticide business registered a phenomenal growth.
- Retail stores have been fully functioning throughout the year.
- Business has improved its operational efficiencies.
- Company is focusing to fast track the upcoming projects.
Capex plans
- Company was looking for 350 to 400 crores in FY 20 but covid had reduced its plan.
- For coming next 4 quarters the coming is focusing on Rs. 450 crores including fertilizer business
- Business would increase the capacity and add multi purpose plant.
- Many molecules have gone off patented such have been identified for manufacturing.
- Company would also work towards PLI scheme and would participate in it.
- For fertilizer business, the additional subsidies the past dues will be cleared.
- Company is focusing for de-bottle necking the Kakinada plant to achieve higher efficiency.
- Company is also focusing on increasing the throughout
Crop protection
- Company focus is towards to increase the product pipeline getting into new technical manufacturing.
- The growth would be in double digits and margins have been increasing and 17% margins can be looked for.
- Domestic market share is quiet low as product portfolio towards insecticide
- Comapny is increasing the product portfolio
- 5 states results in 60% of demand of crop protection and the comoany is present in 3 of these.
- Current year company seeing some growth in B2B business
- Company is focusing towards branding in this verticle
Capital allocation
- Due to cash surplus that the company would be generating, Company has some aggressive plans and is looking for some growth opportinities
Volume growth
- Fertilizers business, there has been a good demand due to back to back good khareeb and rabi season.
- Normal monsoon is being forecasted, the only watchout is to be on Raw material prices....if they are passed on then farmers behavior has to be watched.
- Crop protection, new molecules in the pipeline would give better prodcut offering to the customers.
- Company is looking for registration of combination molecule in global b2b and b2c markets.
Subsidies
- Additional 65k crores coming in, the old dues for the industry will be wiped off.
- When farmers buys from the retailers and acknowledges, it is then the company can generate the claims to the govt.
- Until there is DBT 2.0, the company would have tovcliam the subsidies to the government.
- Govt would come direct transfer to the farmers sooner.
Capping of fertilizer
- Govt would be capping the amount of fertilizers purchased by farmer to protect shortage from Jan 21
- It won't affect the marginal farmer which consists of 85% of farmers.
- It would affect some of the big farmers.
- Capping would be mainly on urea.
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• Speed of filing products has been increased. Filed 5 new DMFs – 3 in US and 2 in EU
• Currently ramping up the facility in VIZAG with strong customer attraction, and will be commercialized as planned in Q3
• VIZAG EBIDTA growth guidance changed to 40%+ YoY
• Growth Driver: Broad based growth in other products and Vizag.
• PLI: Company has filed Mysore for PLI scheme for 1 molecule.
• Technology: Company is about to complete its 2 out of 3 technology, which will enhance efficiency for Solara.
Shankara Building Products concall was today at 11:30 AM 😀
Here are the Key takeaways from the earning call 👇🧵
Business Updates:
• Q3 has seen uptick in the demand and co. is at its 80% of the pre-covid sales.
• There has been pick up in all the segment.
• Affordable Housing Segment has seen growth in the driver of business.
Segments
• Retail sector has seen 14% of the revenue growth. Revenue contribution 60%.
• Company has decreased the number of stores, as co. believes that they can work more efficiently with less number of stores.
• Avg ticket size of the company has been increased. (See image)