Excel Crop Care has been on our Buy list since March 2010 when it was quoting at Rs. 169. Since then, Excel Crop Care has catapulted to Rs. 315 on the back of strong Q1 FY 2011 results, representing a return of about 86% in about 8 months. Excel Crop Care‘s growth story continues as it delivered superb results for Q2 FY 2011. Excel Crop Care‘s total income increased 43.97% to Rs. 230.22 crores as against Rs. 159.91 crores in the preceding quarter last year. Excel Crop Care‘s net profit doubled to Rs. 20.76 crores from Rs. 10.05 crores on a YOY basis.
Excel Crop Care‘s half-yearly results were also quite impressive. Excel Crop Care‘s sales in H1 2011 were Rs. 450.26 crores as against the sales of Rs. 361.47 crores in H1 2010. Excel Crop Care‘s total income was Rs. 433.42 crores as against Rs. 353.07 crores in H1 2010. The Net Profit in H1 2011 soared to Rs. 38.32 crores as against Rs. 25.36 crores in H1 2010. Excel Crop Care‘s EPS soared 52% to Rs. 34.84 as against Rs. 22.91 in H1 2010.
| (Rs cr) | Sep 2010 | Sep 2009 | YOY |
|---|---|---|---|
| Operating Income | 230.22 | 159.91 | 43.97 |
| Total Expenses | 197.28 | 140.44 | 40.47 |
| Operating Profit | 32.94 | 19.47 | 69.18 |
| Other Income | 0.36 | 0.04 | 800.00 |
| PBDIT | 33.30 | 19.51 | 70.68 |
| PBT | 29.18 | 15.11 | 93.12 |
| Adjusted Net Profit | 20.76 | 10.05 | 106.57 |
Applying the pro-rata calculation of last year’s H1 2010 EPS to the full year, the 2010-11 EPS ought to be in the region of Rs. 51.72. If that happens, Excel Crop Care, which at the CMP of Rs. 315 is qouting at a PE of 9.26 on the basis of the FY 2009-10 EPS of Rs. 34.01 will quote at a PE of 6.09 which is very competitive.
| Company Name | LTP ( Rs) |
M.Cap. ( Rs in Cr.) |
P/E (x) |
P/BV (x) |
RONW (%) |
| United Phosp. | 199.30 | 9,097 | 17.4 | 3.02 | 18.05 |
| Rallis India | 1,457.85 | 2,840 | 30.1 | 6.69 | 28.93 |
| Meghmani Organ. | 21.15 | 534 | 9.8 | 1.14 | 7.59 |
| P I Inds. | 467.45 | 526 | 12.6 | 3.64 | 37.45 |
| Nag. Agrichem | 191.35 | 309 | 5.8 | 1.53 | 33.83 |
Excel Crop Care has been growing at a reasonable pace in the past. Excel Crop Care‘s 3 Yr CAGR Sales growth is 14.02% while its 3 Yr CAGR Profit growth is 35.25%. Excel Crop Care‘s Return on Equity is about 22% which is very attractive. Excel Crop Care‘s Debt to Equity Ratio is about 0.89 which is quite reasonable.
Excel Crop Care‘s valuations compare favourably to the valuations of market leaders Rallis and United Phosphorous. While Rallis, at the CMP of Rs. 1,457, is quoting at a PE of 30.1 on the basis of the TTM Eps, United Phosphorous, at the CMP of Rs. 199, is quoting at a PE of 17.4. Meghmani Organics, at the CMP of Rs. 21.15, is quoting at a PE of 9.8.
About Excel Crop Care:
Excel Crop Care manufactures crop-protection chemicals. In 2009-10, Excel Crop Care derived approximately 59 per cent of its revenues from insecticides, 24 per cent from weedicides, and the balance 17 per cent from fungicides and others. Excel Crop Care‘s key products include endosulfan, glyphosate, chlorpyriphos, aluminium phosphide, and zinc phosphide, of which endosulfan is its largest-selling product, accounting for nearly 35 per cent of its sales (about 40 to 45 per cent three years ago). As on June 30, 2010, the major shareholders in Excel Crop Care were the Shroff family, which holds a 19.24 per cent stake, and Nufarm Ltd, an Australian crop protection and industrial chemicals company, which holds a 14.69 per cent stake.
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