indofil industries Limited

INDOFIL INDUSTRIES LIMITED

INDOFIL INDUSTRIES LIMITED(Indofil) is one of the largest players in the agricultural Chemicals as well as Industrial Chemicals segment. Indofil Industries Limited has now a well-equipped manufacturing infrastructure, an experienced Research and Development team, and an excellent distribution network in the global marketplace.

Indofil Industries Limited is now present in more than 120 countries. Indofil Industries Limited is a successful marketer of Insecticides in India. The company is a promoter of the “Crop Care Concept”, where the needs and problems of the crops are identified and attempts are made to fulfill all the needs and solve the problems in a systematic approach.

Indofil Industries Limited is also a leader in the manufacturing of specialty performance chemicals and supplies its products to a wide variety of small, medium, and large industrial manufacturers across the globe. The Specialty and Performance Chemical Division (SPCD) is headquartered in Mumbai and its manufacturing facilities are located in Thane, Vashi(Navi Mumbai), and Vapi in Gujarat.

The company has started a new initiative called “IndoLife Super Specialities”, in which they will work mainly to improve the return on investments for farmers by providing research-based innovative solutions. The department will address various issues at different stages of crop growth.

INCORPORATION DETAILS

 PARTICULARS OF SUBSIDIARIES AND ASSOCIATE COMPANIES

BOARD OF DIRECTORS

Dr. Bina Modi (Chairperson and Managing Director)

Ms. Charu Modi (Executive Director)

Mr. Samir Modi (Non-Executive and Non-independent director)

Ms. Aliya Modi (Non-Executive and Non-independent director)

Mr. Sunil K. Alagh (Non-Executive and Independent Director)

Mr. M. N. Thakkar (Non-Executive and Independent Director)

Mr. Sanjay Buch (Non-Executive and Independent Director)

Mr. S. Lakshminarayanan, IAS(Retd.) (Non-Executive and Independent Director)

Dr. Atchutuni L. Rao (Whole-time Director)

PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

SHAREHOLDING PATTERN (As of 31-03-2020).

 INDUSTRY OUTLOOK

Agro Chemical is the second largest and the fastest growing segment in the Indian agri-input industry. With the recent outbreak of Covid-19, almost all the sectors of the economy are affected, leaving out only a few niche segments. Sectors that produce raw materials like agrochemicals including pesticides and insecticides are currently in high demand as agriculture and other allied activities are defined as essential commodities in the country. Pests and diseases, on average, destroy around 20-25% of the total food produced in India. India has been losing agricultural production worth Rs 1.48Lakh crore annually, due to the damage caused by pests, weeds, and plant diseases. Agrochemicals act as a key input for crop protection and better yield. As per a report, the cost of pesticides is roughly around 0.4% of the total cost incurred by farmers.

The global market for agrochemicals is expected to grow at a cagr of 4.3% between 2019 and 2024and can reach $299.8billion by 2024. The industry is being significantly shaped by new developments such as precision farming, integrated pest management (IPM), and off-patent products. India is the 4thlargest producer of agrochemicals after the United States, Japan& China. The agrochemicals industry is broadly classified into insecticides, herbicides, fungicides, rodenticides, biopesticides, and nematicides. Demand for Insecticides constitutes around 60% of the overall demand in the industry. Maximum consumption of crop protection chemicals arises from the state of Andhra Pradesh, followed by states like Maharashtra, Punjab, Madhya Pradesh, Chhattisgarh, Gujarat, Tamil Nadu, and Haryana.

The future of agrochemicals is bright. And the growth can be attributed to global population growth, growing impetus to prevent crop loss and increase yields, and rising consumer demands for sustainably produced food. However, there are some factors that can slow down the growth of the industry. These factors are Longer product development cycles and escalating costs, Increasing severity of regulatory requirements, and Government farm subsidy reduction.

Talking about the Speciality chemical industry, the Global specialty chemical market is expected to grow at a cagr of around 4%, between 2020 and 2025. It is expected to reach a market size of $1.2 trillion by 2024. Major factors driving this market growth are the increasing efforts for oil exploration and production, and the robust growth of construction activities, especially in the Asia-Pacific and the Middle East& African regions. On the contrary, increasing environmental regulations and decreasing fossil fuel reserves may hamper the growth of the market. In India, the segment is expected to grow at a CAGR of 12% to reach over $87 billion by 2025.

KEY FINANCIALS OF INDOFIL INDUSTRIES LIMITED (In Rs. Crores) 

BALANCE SHEET OF INDOFIL INDUSTRIES LIMITED(In Rs. Crores)

 DIVIDEND AND RETAINED EARNINGS

 PERFORMANCE OF THE COMPANY

Revenue from operations reduced by 1.5% from Rs. 2,251.76 Crores in FY 2019 to Rs. 2,216.33 Crores in FY 2020.

EBITDA decreased by 24.15% from Rs. 376.72 Crores in FY 2019 to Rs. 285.73 Crores in FY 2020. EBITDA margins also fell from 16.73% in FY 2019 to 12.89% in FY 2020. This states that the efficiency of the company is decreasing.

The consolidated Profit of the company stood at Rs. 94.76 Crores in FY 2020, 49.79% less than the Rs. 188.72 Crores profit of FY 2019. Because of the fall in Net profit, EPS also fell by 50.19% to Rs. 44.37 in FY 2020.

It can be assessed that, although the revenue of the company is increasing, the EBITDA of the company decreasing.

The current ratio of the company is 1.35. This states that the company does not have any liquidity issues.

The company has consistently given dividends over the past 3 years. However, the Dividend per share in FY 2020 was only Rs. 5, less than the dividend per share of FY 2019, which was Rs. 8.         

In FY 2020, the Company sold its stake in Hifil Chemicals Private Limited to the Joint Venture Partner as Hifil could not commence any business operations for over a decade since its inception.

The Company has established Indo Baijin Chemicals PrivateLimited, a Subsidiary, in the form of a Joint Venture with ShanghaiBaijin Group, China for the manufacture of important raw materials. In FY 2020, the joint venture generated a Profit (excluding Tax) of Rs. 38.14 Crores, against Rs. 10.91 Crores in FY 2019.