India Pesticides Ltd

India Pesticides reported its financial results for the second quarter of fiscal year 2024 (Q2 FY24), ending on September 30, 2023. The key highlights are as follows:

1. Total revenue for Q2 FY24 stood at Rs. 206 crore.
2. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was Rs. 31 crore, showing a significant increase of 19.2% compared to the previous quarter.
3. Net Profit for Q2 FY24 was Rs. 20 crore, indicating a 25.6% increase quarter-on-quarter.

• Despite challenges in the agro-industry, such as high-cost inventories, destocking in international markets, and price declines due to oversupply of raw materials from China, IPL achieved sustainable revenue of Rs. 206 crore. This was driven by robust domestic demand and a strong focus on operational efficiency.
• IPL is continuing with its expansion project through its subsidiary, which is expected to be commissioned by the end of the fiscal year. The company is also investing in new products and expanding manufacturing capabilities at its existing facility. In the quarter, IPL acquired land adjacent to its Sandila plant, which will support future expansion efforts.
• IPL plans to incorporate an additional block for Intermediate and another for Technical by the second half of FY2024. This expansion is expected to increase production capacity by approximately 2000 metric tons, with completion scheduled for Q4 FY24.

Key Strategic Developments:

• IPL is implementing a strategic succession plan, welcoming the chairman’s sons to join the board, signaling a transition towards future growth.
• The company is in the planning stages of establishing a new subsidiary with an asset-light business model.
• IPL has acquired land adjacent to the Sandila plant to facilitate expansion efforts.
• There are plans to increase the present installed capacity of Technical and Intermediate by around 2000 metric tons to a total of 26,200 metric tons, expected to be completed by Q4 FY24.
• Capital expenditures (Capex) of Rs. 50 crore have been planned for IPL and Rs. 60 crore for Shalvis Specialities Limited (a wholly-owned subsidiary).
• IPL is exploring opportunities for further diversification into new chemistry.
• The Hamirpur Project is expected to be commissioned by Q4 FY24.