Best Agrolife – Think Big, Think Best!

There is a stretch in the working capital as the company is transforming from a run of the mill B2B player like others in the sector to a branded player. So they have pushed the brand in the market. Sales and PAT figures are indicative of the same and so are the margins in the quarter.

Plant and equipments are genuine (I have visited both Gajraula and Greater Noida plant). The company does outsource some production to another company Ravi Crop Sciences. They purchase intermediates and supply back technicals to Best Agrolife itself. This is also the reason why Ravi Crop Sciences appears as a customer in AR whereas it is actually a vendor (supplier). Also, the company has converted a large portion of its own sales from B2B to B2C for the technicals it used to manufacture for other companies earlier.

Yes, this is because the growth in sales is Working capital driven. The nature of the business is working capital intensive for all Agro chemical players. However, it is seasonal too. December end, most of the cash is released in the system between Kharif and Rabi season. But investors don’t get to see as BS is reported in Sep quarter and March quarter only.