Insecticides

The company engaged in the formulation of pesticide and manufacture of technical pesticides posted a set of encouraging numbers for Q1FY13. Formulation remains its mainstay, contributing 87% to its net sales, YoY, this was up 17% and up 98% on a QoQ. Despite a 50% rise in excise duty outgo, its net sales for current Q1, on a YoY was up 22% at Rs.149 crore. Operating expenses rose 17% and interest outgo at Rs.4.72 crore, was up over 5.5 times. It ended the quarter with a net profit at Rs.12 crore, up 33%. Q4 is seasonally its weakest quarter hence would not be right to compare the numbers on a sequential basis.

Looking ahead, monsoon has played truant and this directly affects the company in Q2. But the company feels that with its launch of new products in collaboration with America’s Vanguard and Japan’s Nissan Chemical, there will be support to its margins. Also its unit at Dahej has started production, with a lot of backward integration. This too is expected to boost the numbers despite poor monsoon. By the end of first half of FY13, the company estimates to have clocked a turnover of Rs.500 crore, which is almost equal to that of entire FY12 at Rs.554 crore. Post the first half, assuming stock price remains buoyant, the promoters plan to dilute 10-15% of their stake to fund its further expansion plans.