Download Excel Crop Care Limited

GICS Industry : Chemicals l Sub Industry : Fertilizers & Agricultural Chemicals l Website : www.excelcropcare.com
Excel Crop Care Limited
Key Stock Indicators
NSE Ticker :
Bloomberg Ticker :
Face value / Share:
Div. Yield (%):
EXCELCROP
EXCC:IN
5.0
2.5
CMP (as on 17 Feb 2011—Rs/share):
52-week range up to 17 Feb 2011 (Rs)(H/L):
Market Cap as on 17 Feb 2011 (Rs mn):
Enterprise Value as on 17 Feb 2011 (Rs mn):
Div. Yield (%):
0.0
Shares outstanding (mn) :
Free Float (%) :
Average daily volumes (12 months) :
Beta (2 year) :
250.0
332.5/137.5
2,751
4,062
Incorporated in 1964, Excel Crop Care Ltd (ECCL) manufactures crop protection chemicals like
insecticides, weedicides, fungicides, fumigants, and rodenticides. It has presence across the
agricultural value chain. Its product range includes bio-products, bio-pesticides, seed treatment,
plant growth promoters and crop protection products. The company has three manufacturing
plants located at Bhavnagar, Silvassa and Kutch. It employees ~1,200 employees.
KEY HIGHLIGHTS
Integrated player in crop protection segment
ECCL derives revenues from different streams like insecticides, weedicides (herbicides), fungicides,
fumigants and rodenticides. The company derived ~59% of its revenue for FY10 from insecticides,
~24% from weedicides and ~17% was contributed by fungicides and other products. It’s key
products include endosulfan, glyphosate, chlorpyriphos, aluminum phosphide, and zinc phosphide.
Endosulfan is its largest selling product accounting for ~ 35% of its revenue for FY10. The company
has also initiated advice program for farmers on integrated pest management and cropmanagement.
Strong distribution network
ECCL has distribution network of ~40,000 dealers who make its products available in over 80% of
the India’s agricultural market. Also in the recent past the company has expanded its presence
beyond the traditional and large agro-chemical consuming areas, such as Andhra Pradesh, Punjab,
Haryana and Maharashtra to non-traditional areas such as Assam, West Bengal, Uttar Pradesh,
Madhya Pradesh and Rajastan. ECCL has also tied up with multinational corporations such as
Sumitomo Chemicals India Pvt. Ltd., BASF India Ltd., Bayer crop science Ltd. and Dow chemicals
International Pvt. Ltd. to market their complementary products through its distribution channel.
11.0
80.8
40,571
1.3
Key Financial Indicators
Mar-08
5,390.0
10.3
223.7
4.2
1.0
20.3
4.8
0.9
17.5
19.6
3.8
Revenue (Rs mn)
EBITDA ma rgins (%)
PAT (Rs mn)
PAT ma rgins (%)
Gea ring (x)
EPS (Rs /s ha re)
PE (x)
P/BV (x)
RoCE (%)
RoE (%)
EV/EBITDA (x)
Mar-09
7,218.1
14.3
340.9
4.7
1.0
31.0
2.2
0.5
35.4
25.0
2.0
Mar-10
6,444.7
11.5
370.5
5.7
0.8
33.7
7.4
1.5
20.3
22.6
5.5
n.m. : Not meaningful
Shareholding (As on December 31, 2010)
Promoter
19%
FII
3%
DII
12%
Growing Exports
ECCL’s exports have registered a growth of ~15% CAGR between FY06-10. Contribution of exports
to the total revenue has grown from 29% in FY06 to 33% in FY10. ECCL exports its products to Latin
America, Africa and neighboring countries like Sri Lanka, Bangladesh, and Pakistan. Its key export
markets are Brazil and Argentina where company has tie ups with local companies to market its
products.
KEY RISKS
Product concentration risk, as single product (Endosulfan) contributing ~35% of FY10
revenue
•
Environmental regulations by government
•
Dependency upon rainfall
(index)
250
600
500
-8
13
100
0
0
Note:
1) YTD returns are since April 1, 2010 to Feb 17, 2011.
2) 1-m, 3-m and 12-m returns are up to Feb 17, 2011.
Volumes (RHS)
EXCELCROP
Jan-11
-2
Dec-10
5
200
50
Nov-10
71
Oct-10
-9
Sep-10
-6
300
Aug-10
21
100
Jul-10
12-m
Jun-10
3-m
Apr-10
1-m
400
Feb-10
YTD
150
May-10
Returns (%)
NI FTY
('000)
700
200
Stock Performances vis-à-vis market
EXCELCROP
Indexed price chart
Mar-10
•
Others
66%
NIFTY
CRISIL COMPANY REPORT | 1
Excel Crop Care Limited
BACKGROUND
ECCL is engaged in the business of agrochemicals comprising insecticides, weedicides (herbicides), fungicides, fumigants and rodenticides. The company's product basket
includes soil enricher, bio-pesticides and plant growth promoters. It has also developed a seeds business.. ECCL is one of the largest sellers of endosulfan (an organochlorine insecticide) in India and derives around one third of its revenues from this product. However ECCL is gradually reducing its reliance on endosulfan (because it is
banned in many countries because of its alleged harmful effects on human beings), by increasing sales of its other products. Share of endosulfan product to the total
revenue has declined to nearly 35% in FY10 from over 40% in FY07.
COMPETITIVE POSITION
Peer Comparison
Revenue (Rs mn)
EBITDA ma rgins (%)
PAT (Rs mn)
PAT ma rgins (%)
Gea ring (x)
EPS (Rs /s ha re)
PE (x)
P/BV (x)
RoCE (%)
RoE (%)
EV/EBITDA (x)
Excel Crop Care
Ltd
Mar-10
6,444.7
11.5
370.5
5.7
0.8
33.7
7.4
1.5
20.3
22.6
5.5
EID Parry (India)
Ltd
Mar-10
76,095.6
13.0
5,636.9
7.4
1.2
65.3
3.2
0.7
19.0
24.1
3.8
BASF India Ltd
Mar-10
16,290.9
10.7
960.7
5.9
23.6
21.2
2.4
25.0
15.9
10.7
ClariantChemicals
(India) Ltd
Dec-09
9,532.2
21.2
1,076.1
11.3
40.4
17.5
5.5
48.7
32.6
9.2
n.m: Not meaningful
FINANCIAL PROFILE
Key Financial Indicators
Units
Irregular monsoon decreased top line and margins; PAT however improved
Revenue
ECCL’s revenues declined ~11.5% y-o-y from Rs. 7.2 bn in FY09 to Rs. 6.4 bn in FY10.
This decline in its revenue for FY10, was mainly on account of decline in input prices
in the domestic markets which the company had to pass on to the end consumers.
This also impacted company’s export revenues during FY10.
Rs mi ll ion
EBITDA ma rgins Per cent
PAT
Rs mi ll ion
PAT ma rgins
Mar-08
Mar-09
Mar-10
5,390.0
7,218.1
6,444.7
10.3
14.3
11.5
223.7
340.9
370.5
Per cent
4.2
4.7
5.7
EBITDA margins decreased by 280 basis points due to temporary blips caused by
deficient rain fall which resulted in excess supply thus putting pressure on margins.
Revenue growth Per cent
23.1
33.9
-10.7
EBITDA growth
Per cent
20.8
85.4
-28.1
PAT however improved from Rs. 340.9 mn in FY09 to Rs. 370.5 mn in FY10, due to
~40% decline in interest cost.
PAT growth
Per cent
16.3
52.4
8.7
Gea ring
Times
1.0
1.0
0.8
RoCE
Per cent
17.5
35.4
20.3
RoE
Per cent
19.6
25.0
22.6
INDUSTRY PROFILE
Pesticides
The pesticides industry comprises two basic product segments - technical and formulations. The technical segment forms the basis of formulations, which are
manufactured via the batch-mixing process to develop palatable dosage forms. In 2008-09, total pesticide consumption stood at 43.9 thousand metric tonnes (TMT;
technical grade) vis-à-vis production of 85.3 TMT.
Exports are expected to drive production, with domestic demand likely to remain moderate over the medium term. Further, the government`s decision to recognise
product patents limits the growth of domestic players to an extent. However, it provides multinational innovator companies greater competitive advantage and pricing
flexibility. Despite the seasonal nature of demand, players have maintained operating margins at 10-15 per cent over the last 5 years, backed by high-value product
offerings.
CRISIL COMPANY REPORT | 2
Excel Crop Care Limited
ANNUAL RESULTS
Income Statement
(Rs million )
Net Sales
Operating Income
Mar-08
5,237.9
5,390.0
Mar-09
7,005.7
7,218.1
Mar-10
6,239.0
6,444.7
EBITDA
EBITDA Margin
555.7
10.3
1,030.4
14.3
741.1
11.5
Depreciation
Interest
Other Income
82.9
85.6
-5.6
93.1
474.4
-5.3
98.6
88.3
4.1
351.7
223.7
535.5
340.9
569.6
370.5
4.2
4.7
5.7
No. of shares (Mn No.)
11.0
11.0
11.0
Earnings per share (EPS)
20.3
31.0
33.7
Mar-08
381.6
-134.4
82.9
-309.5
Mar-09
457.6
-180.8
93.1
-458.3
Mar-10
558.3
-198.9
98.6
-200.7
20.6
-181.1
15.8
-88.4
-214.9
18.2
257.3
-182.7
9.0
PBT
PAT
PAT Margin
Cash flow
(Rs million )
Pre-tax profit
Total tax paid
Depreciation
Change in working capital
Balance sheet
(Rs million )
Equity share capital
Reserves and surplus
Tangible net worth
Deferred tax liablity:|asset|
Long-term debt
Short-term-debt
Total debt
Current liabilities
Total provisions
Total liabilities
Gross block
Net fixed assets
Investments
Current assets
Receivables
Inventories
Cash
Total assets
Mar-08
55.0
1,167.5
1,222.5
123.7
17.6
1,224.0
1,241.7
1,015.5
107.9
3,711.3
1,364.7
894.9
52.8
2,763.5
1,115.3
966.0
192.9
3,711.2
Mar-09
55.0
1,449.7
1,504.7
137.4
20.6
1,459.2
1,479.7
1,096.3
171.2
4,389.3
1,555.9
1,018.2
34.7
3,336.5
1,318.9
1,327.1
163.5
4,389.4
Mar-10
55.0
1,725.1
1,780.1
137.6
11.3
1,444.6
1,455.9
1,327.7
194.6
4,895.9
1,704.7
1,096.5
25.7
3,773.7
1,631.9
1,456.2
145.3
4,895.9
Revenue growth (%)
EBITDA growth(%)
PAT growth(%)
Mar-08
23.1
20.8
16.3
Mar-09
33.9
85.4
52.4
Mar-10
-10.7
-28.1
8.7
EBITDA margins(%)
Tax rate (%)
PAT margins (%)
10.3
38.2
4.2
14.3
33.9
4.7
11.5
34.9
5.7
24.6
5.0
109.6
19.6
17.5
16.1
5.0
135.1
25.0
35.4
18.6
6.3
161.5
22.6
20.3
Gearing (x)
Interest coverage (x)
Debt/EBITDA (x)
1.0
6.5
2.2
1.0
2.2
1.4
0.8
8.4
2.0
4.2
1.2
4.9
1.2
4.0
1.3
187
169
214
Ratio
Cash flow from operating activities
Capital Expenditure
Investments and others
Dividend payout (%)
Dividend per share (Rs)
BV (Rs)
Return on Equity (%)
Return on capital employed (%)
Cash flow from investing activities
Equity raised/(repaid)
Debt raised/(repaid)
Dividend (incl. tax)
Others (incl extraordinaries)
-165.3
0.0
253.7
-64.4
-27.1
-196.7
0.0
238.1
-64.4
82.1
-173.7
0.0
-23.9
-80.2
2.2
Cash flow from financing activities
Change in cash position
Opening cash
162.2
17.5
175.4
255.8
-29.3
192.9
-101.9
-18.3
163.5
Asset turnover (x)
Current ratio (x)
Closing cash
192.9
163.5
145.3
Gross current assets (days)
n.m : Not meaningful;
QUARTERLY RESULTS
Profit and loss account
(Rs million)
No of Months
Revenue
Dec-10
% of Rev
3
1,514.0
Dec-09 % of Rev
3
100.0
1,378.1
Sep-10
% of Rev
3
Dec-10 % of Rev
9
Dec-09
% of Rev
9
100.0
2,305.7
100.0
5,855.5
100.0
4,909.3
100.0
EBITDA
148.8
9.8
130.0
9.4
333.0
14.4
787.0
13.4
609.6
12.4
Interes t
17.1
1.1
19.0
1.4
16.5
0.7
57.0
1.0
67.7
1.4
Depreci a tion
23.9
1.6
20.5
1.5
24.6
1.1
73.1
1.2
65.5
1.3
PBT
107.8
7.1
90.5
6.6
291.9
12.7
656.8
11.2
476.5
9.7
PAT
74.8
4.9
58.6
4.3
207.5
9.0
458.3
7.8
310.7
6.3
CRISIL COMPANY REPORT | 3
Excel Crop Care Limited
FOCUS CHARTS & TABLES
Sales
-50
50
0
Sales growth y-o-y (RHS)
Rs/share
20
Net Profit
Per cent
20
EPS
15
15
10
10
5
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
-100
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
Mar-09
Dec-08
Jun-08
Sep-08
Mar-08
0
-20
-40
-60
100
Sep-09
500
150
Jun-09
1,000
60
40
20
0
Mar-09
1,500
200
Dec-08
2,000
Per cent
500
400
300
200
100
0
-100
-200
-300
-400
Quarterly PAT & y-o-y growth
Sep-08
2,500
Rs mn
250
Jun-08
Per cent
100
80
Quarterly sales & y-o-y growth
Mar-08
Rs mn
3,000
Net profit growth y-o-y (RHS)
Movement in operating and net margins
5
0
0
-5
Sep 2010
19.3
4.1
10.1
66.5
Dec 2010
19.3
3.1
12.0
65.7
OPM
Board of Directors
Director Name
As hwi n Cha mpra j Shroff (Mr.)
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
Mar-09
Dec-08
Sep-08
Jun-08
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
Mar-09
Dec-08
Sep-08
Jun-08
Mar-08
Shareholding Pattern (Per cent)
Mar 2010
Jun 2010
Promoter
19.3
19.2
FII
1.3
7.0
DII
12.5
10.7
Others
66.9
63.1
Mar-08
-5
-10
NPM
Dipes h Ka nti s en Shroff (Mr.)
Designation
Non-Executive Cha i rma n, PromoterDirector
Ma na gi ng Di rector, Promoter-Di rector
Mukul Govi ndji As her (Dr.)
Non-Executive Di rector
Non-Executive Di rector
Bhupendra na th Vidya na th
Bha rga va (Mr.)
Deepa k Vija ys inh Bhima ni (Mr.) Non-Executive Di rector
Vina ya k Ba ji bha i Buch (Mr.)
Non-Executive Di rector
Nina d Dwa rka na th Gupte (Mr.)
Non-Executive Di rector
Sa ndeep Hemendra Junna rka r
(Mr.)
Kevin Leona rd Ma rtin (Mr.)
Ja gdis h Ra ma nl a l Na i k (Mr.)
Non-Executive Di rector
Director
Director
Sha ra d La l l ubha i Pa tel (Mr.)
Non-Executive Di rector
Pra ka s h Kes ha vji Shroff (Mr.)
Director
Additional Disclosure
This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).
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CRISIL COMPANY REPORT | 4