(1/18)
About:
IPL is engaged in the manufacturing of various types of pesticides (technical & formulations) & pharma intermediates.
Pesticides contributed about 95% of total sales, while pharmaceutical intermediates contributed about 5% to total sales of the company in FY22.
About:
IPL is engaged in the manufacturing of various types of pesticides (technical & formulations) & pharma intermediates.
Pesticides contributed about 95% of total sales, while pharmaceutical intermediates contributed about 5% to total sales of the company in FY22.
(2/18)
Pesticides:
According to IMARC Group, the market will reach INR 320 billion by 2027, with a CAGR of 7.07% from 2022 to 2027 driven by the need to improve total agricultural production. Pests & illnesses consume approximately 20-25 % of the entire food produced in India.
Pesticides:
According to IMARC Group, the market will reach INR 320 billion by 2027, with a CAGR of 7.07% from 2022 to 2027 driven by the need to improve total agricultural production. Pests & illnesses consume approximately 20-25 % of the entire food produced in India.
(3/18)
Growth Drivers:
• Total usable arable land per capita has been decreasing in recent years. Pesticides are expected to play a significant influence in raising average agricultural yields per hectare.
• Farmers are becoming more conscious of use of pesticides
Growth Drivers:
• Total usable arable land per capita has been decreasing in recent years. Pesticides are expected to play a significant influence in raising average agricultural yields per hectare.
• Farmers are becoming more conscious of use of pesticides
(4/18)
• Pesticide penetration in India is substantially lower than in other major countries such as the USA and China. This shows that the pesticide business is still substantially untapped, with plenty of possibility for future expansion.
• Pesticide penetration in India is substantially lower than in other major countries such as the USA and China. This shows that the pesticide business is still substantially untapped, with plenty of possibility for future expansion.
(5/18)
Key Challenges:
• High R&D costs:
It takes an average of 9 years & $180 mn to develop a new agrochem compound. Companies in India have traditionally not concentrated on developing novel compounds & they will have problems in establishing these competencies.
Key Challenges:
• High R&D costs:
It takes an average of 9 years & $180 mn to develop a new agrochem compound. Companies in India have traditionally not concentrated on developing novel compounds & they will have problems in establishing these competencies.
(6/18)
• Threat from Genetically Modified (GM) seeds:
Genetically modified seeds have self-immunity against natural enemies, which could have a severe influence on the agrochemicals industry.
• Lack of efficient distribution systems
• Threat from Genetically Modified (GM) seeds:
Genetically modified seeds have self-immunity against natural enemies, which could have a severe influence on the agrochemicals industry.
• Lack of efficient distribution systems
(7/18)
The company at a Glance:
• 2 Active Manufacturing Facilities
• 2 In house Laboratories
• Exporting to 25+ countries
• Top 10 customers generate 58% of the total revenue
• Sole Indian manufacturer for Captan, Folpet and Thiocarbamate Herbicide.
The company at a Glance:
• 2 Active Manufacturing Facilities
• 2 In house Laboratories
• Exporting to 25+ countries
• Top 10 customers generate 58% of the total revenue
• Sole Indian manufacturer for Captan, Folpet and Thiocarbamate Herbicide.
(8/18)
Key Products and Their Application:
Key Products and Their Application:
(9/18)
Upcoming Expansion Plans:
• Capex of ₹70cr planned for this fiscal
• 2 more manufacturing blocks at the existing Sandila facility are proposed to be used for herbicide Technicals & intermediates
• Targeting further increase of Sandila plant capacity by 4,000 MT
Upcoming Expansion Plans:
• Capex of ₹70cr planned for this fiscal
• 2 more manufacturing blocks at the existing Sandila facility are proposed to be used for herbicide Technicals & intermediates
• Targeting further increase of Sandila plant capacity by 4,000 MT
(10/18)
Key Strengths:
• Diversified product portfolio:
IPL has around 28-30 molecules (technical) registered. Company is continuously investing in its research and development capabilities to develop new molecules which are expected to reduce its dependence on old molecules.
Key Strengths:
• Diversified product portfolio:
IPL has around 28-30 molecules (technical) registered. Company is continuously investing in its research and development capabilities to develop new molecules which are expected to reduce its dependence on old molecules.
(11/18)
•Sustained growth:
The total OI grew by 10.86% in FY22 at ₹721.71 cr which is further expected to increase in FY23 on the back of launch of 5 new products in FY22, one more product launched in Q1FY23 & 2 more products to be launched by the end of FY23.
•Sustained growth:
The total OI grew by 10.86% in FY22 at ₹721.71 cr which is further expected to increase in FY23 on the back of launch of 5 new products in FY22, one more product launched in Q1FY23 & 2 more products to be launched by the end of FY23.
(12/18)
Financial risk profile:
The company is seeing an improved overall gearing of 0.02x in FY22 vs 0.11x in FY21.
Interest Coverage Ratio of the company remains healthy at 33.73x for FY22.
The Company’s cash balance as on sept 30th stood at ₹78.1 cr, debt ⬇️ ~73% YoY
Financial risk profile:
The company is seeing an improved overall gearing of 0.02x in FY22 vs 0.11x in FY21.
Interest Coverage Ratio of the company remains healthy at 33.73x for FY22.
The Company’s cash balance as on sept 30th stood at ₹78.1 cr, debt ⬇️ ~73% YoY
(13/18)
Key Weakness:
• Working capital intensive:
During FY22, the operating cycle of the company was at 138 days as compared to 104 days in FY21, largely due to increase in the collection period (Up 81 days in FY22 from 45 days in FY21)
Key Weakness:
• Working capital intensive:
During FY22, the operating cycle of the company was at 138 days as compared to 104 days in FY21, largely due to increase in the collection period (Up 81 days in FY22 from 45 days in FY21)
(14/18)
• The inventory requirement for pesticides industry generally remains high due to commoditised nature of products and seasonality factor.
Further, company has to allow higher credit period for newly launched products to generate the demand for those products initially.
• The inventory requirement for pesticides industry generally remains high due to commoditised nature of products and seasonality factor.
Further, company has to allow higher credit period for newly launched products to generate the demand for those products initially.
(15/18)
• Exposure to forex fluctuation:
Company generated about 45-47% of the revenue from exports which exposes company to inherent risk of forex fluctuation. However, IPL imports some portion of its raw material requirement, which provided a natural hedge to some extent.
• Exposure to forex fluctuation:
Company generated about 45-47% of the revenue from exports which exposes company to inherent risk of forex fluctuation. However, IPL imports some portion of its raw material requirement, which provided a natural hedge to some extent.
(16/18)
Key Numbers & Ratio:
• Market Cap: ₹2,881cr
• Stock P/E: 18.8 vs Industry P/E 24.70
• RoCE: 40.5%
• RoE: 30.7%
• PEG: 0.54
• Sales 3 year CAGR: 28.1%
• P/S: 3.44
• Debt 3 years back: ₹61.1Cr
• Debt Now: ₹8.7cr
• NPM Last Year: 43.2%
Key Numbers & Ratio:
• Market Cap: ₹2,881cr
• Stock P/E: 18.8 vs Industry P/E 24.70
• RoCE: 40.5%
• RoE: 30.7%
• PEG: 0.54
• Sales 3 year CAGR: 28.1%
• P/S: 3.44
• Debt 3 years back: ₹61.1Cr
• Debt Now: ₹8.7cr
• NPM Last Year: 43.2%
(17/18)
Shareholding Pattern:
Q2FY23 vs Q1FY23
• Promoters. 67.20% vs 66.76%
• FIIs: 0.62% vs 2.11%
• DIIs: 1.59% vs 1.07%
• Public: 30.60% vs 30.05%
Shareholding Pattern:
Q2FY23 vs Q1FY23
• Promoters. 67.20% vs 66.76%
• FIIs: 0.62% vs 2.11%
• DIIs: 1.59% vs 1.07%
• Public: 30.60% vs 30.05%
• • •
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