Insecticides (India) Limited (NSE: INSECTICID) Q4 2025 Earnings Call dated May. 28, 2025
Corporate Participants:
Unidentified Speaker
Masoom Rateria — Investor Relations, Orient Capital
Rajesh Aggarwal — Managing Director
Sandeep Aggarawal — Chief Financial Officer
Analysts:
Unidentified Participant
Bharat Gupta — Analyst
Arnav Sakhuja — Analyst
Sneha Jain — Analyst
Kartik — Analyst
Kunal Tokas — Analyst
Agastya Dave — Analyst
Manish Jain — Analyst
Presentation:
operator
Foreign. Ladies and gentlemen, thank you for patiently holding. The conference is expected to start in few minutes. Please continue to hold. Ladies and gentlemen, good day and welcome to Insecticides India Limited’s Q4FY25 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Masoom Rativa to thank you and over to you ma’ am.
Masoom Rateria — Investor Relations, Orient Capital
Thank you and welcome to Q4FY25 earnings con call of Insecticides India Limited. Today on this call we have with. Us Mr. Rajesh Kumar Agrawal the Managing. Director, Mr. Sandeep Agrawal the Chief Financial Officer and Mr. Dushyan Sood the Chief Marketing Officer. Before we proceed the call I would like to give a small disclaimer that this conference may contain certain forward looking statements which are based on beliefs, opinions and expectations of the company as on date. Now I would like to hand over the call to Mr. Rajesh for his opening remarks. Over to you sir.
Rajesh Aggarwal — Managing Director
Thank you very much. Good evening everyone. Welcome to Q4 and full year FY25 earnings call of Insecticides India Limited. Thanks for taking the active interest in IIM and your participation. Today I’m joined with year 4 and CMO Mr. Dushan Sood. So let me start with the industry outlook. There is a very positive sentiment across the industry. There was a good monsoon prediction and we have seen the good pre monsoon shower that has covered the entire country at large. All the catchment areas are receiving good rains. The crop swing is expected to start a little early in the early part of June itself.
Farmer has made good earning in the field crops in particular in the Ravi season because the crop condition was good and prices of most of the field crop was quite good. The raw material prices for the industry are stable and overall I can say. That there are the signals of favorable. Tailwinds and we expect this to continue in fiscal 2026 also. Now let me talk about I. We. Had very good launches during the year. The highest number of launches, almost 12 launches were done in the fiscal 25. Out of these 12 launches, four products I am able to shift to Focus Marathna this year. The total number of Focus Marathna till last year were 12 which has been increased to 16. And I can say that there is. A very good acceptance of the products We Take to the market last year the farmers are generally very happy, the trade is happy and I expect the good growth from these products. This year we did not wait for the season. Whenever we got the registration we launched the products. I can say it was a trial launch that’s why the number achieved in the last year was not very big. But this year as I have suggested that four products are moving to focus Marathna interest of the Maratna also will be giving a good performance. So we can anticipate that this quarter.
These products are going to support us. Well in our growth strategy for the year 2026. Also the number of launches are big. There are almost half a dozen products which are lined up for launches. So recently in this week I’ve launched a product called Altair which comes from. Disable of Nissan which is the seventh. Product in the list of Nissans which is coming to Insecticide India directly from Nissan. And today we can say that Nissan is the most important Japanese partner for Insecticide India and plays a very important role in our patented product portfolio or I can say the value added portfolio or the premium product portfolio. So this is going to be a herbicide for rice again patented, very interesting product. And in the recent past with our launches Insecticide India has developed a good I would say say on the rice on the herbicide segment for almost all the major crops in the country we.
Have got these specialty herbicides and they. Are doing very well across the country. May it be rice, pulses, maize, cotton, wheat, sugar cane they have got the solutions and they are number one solutions in this. If I talk about the major herbicides which are doing good for IL they are like Hachiman Tori Tori super which is a recent launch, green level, green mix, green expert stroke. Again it was relaunched by making the technicals in house million. So in this perox came out of our own technical. Super which was a recent launch again came out of our. Own technical Stroke came out of our own technical which was relaunched billion came out of our own technical. So a lot of development is taking their place for AI manufacturing also and which take these products to the FM segment and we are very very confident that we’ll be able to make them big. Talking about the. Our presence across the. Country I can say that today IL is present across the length and breadth of the country across all crop segments and we have the solutions for every crop for every season which makes us. More buoyant that we are present across. And selling throughout the year. So the 60% business comes in the. First half of the. So that is going to remain like that. But you can see that in Q4 we have posted a decent increase in our top line as well as the bottom line. And I believe that this type of feature will continue in the future. Also talking about the Dahish plant there is a good news. We have made an investment of about 150crores in this plant. And now this plant has received the in principal approval from the government which means that in the month of June we shall start our production. The plant is going to commence in the production.
So there will be a lot of new products which will be started in this plant and there will be some expansion of the capacities because the new plant will be used majorly for manufacturing of insecticide fungicides and their intermediate in the old facility. We are going to enhance our capacity and some new herbicides and their intermediates and also some new herbicides will be launched from the older plant. Which means that we are going to divide the herbicides and the insecticides area in totality in Dahesh plant in this fiscal. Because the announcement in the power connection is also expected which should come in another two months.
So we’ll come into production and this. Year this plant is going to contribute roughly about 100 crores. This expansion with a CAGR of more than 50% in next three to four years. Because the expectation is very big and our hope from this new expansion is quite big and we will be launching many new products and increasing our capacity for many products from this new expansion. Here I would also like to talk about our expansion budgets which for this year we have kept at around 100 crores. By 26amajor investment is going to go to Sopanana which is going to be a fully automatic plant and it will boost the momentum. The most part of the 100 crore expense is going to go to Sultanala.
There will be some maintenance capex which will be used across our plants. But yes, the major part will be this. Today I would also like to talk about the inventory because on 31st of March you would have seen the increased inventory in the system. So that’s the part of the strategic move because if we look at the current scenario the monsoon predictions were quite good and the preparedness was the for the new season was quite needed. We had very aggressive launches in the year 25 and we have very aggressive launches in 26. There were a lot of new eyes, new brands which are to be introduced into the market.
We had to build up the inventory. In the month of March which will. Finish Very soon, by June July you will see a big impact because these are the months of selling and we are fully prepared to take on the market. So the most important thing which I would like to talk today is that we are working on effective implementation of things all across the organization. We are working on inventory control, we are working on working capital, we are again working on the expansion and projects. And to finish off these things kindly, the outlook from the trade is very very positive. I shall always beat the market. We shall continue with our double digit growth strategy with the top line growth coming majorly from Maharatnas which will mean that the bottom line will increase better than the top. With this I hand over the call to the CFO Mr. Sandeep Agarwal to explain the result.
Sandeep Aggarawal — Chief Financial Officer
Good evening everyone and welcome. So the major financial highlights of the results are there is strong revenue growth of around 32% registered during 4Q25 and the major with a very good margin improvement also the major growth has come from our premium products. The major products in which we register the growth are here, Mission Micoraza and some new launches and gross Profit margin in ever 25 also stood at 32% which is showing improvement of 655bps over the last year. So this is due to the better product mix, sales, improved pricing strategy on which we are working and some new launches.
So they all combined contributed to the improvement in the gross margins. So EBITDA margin forever 25 also improved by 281 bpf due to the result of our aggressive market campaigning and field promotions to support the launches of the new product in the market. The return on capital employed and return on equities also improved in our 25. So the RO CE 18% and ROE is 13% respectively during the year. If you’ll see the results, some markings. So if you see the full year revenue growth it is around 2% and quarter on quarter revenue growth is around 32%.
B2C Premium Products vs January if you see during the full year the premium products has increased from 59% to 61% in overall B2C sales and during the quarter it has come down from 52% to 51% and you will see the sales by segment. So the basic improvement is there in B2C sales segment which has increased from 69% to 75% and the corresponding decrease has come in B2B sales from 26% to just come to 20% for overall year. Whereas during the quarter the B2C sales has come down from 62% to 59% and B2B sales have increased from 24% to 27%.
We will see the margins. The gross profit for the full year has improved by 28% and the gross profit for the quarter has been increased by 51%. So EBITDA margin also improved by 36% for the full year. So from 8.3% it has come into the double digit figure of around 11.1%. And EBITDA level for the quarter has also improved by 226%. From 3.2% it has come improved to 7.9%. We will see the pat. So full year pat has also improved by 39%. From 5% it has come to 7% and during the quarter it has improved by 85% from 2.8% to 3.9%.
So these are the basic financial highlights. So now we can open the session for question and.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Bharat Gupta from Fair Value Capital. Please go ahead.
Bharat Gupta
Hi Rajesh Singh. Sandeep Singh. I hope I’m audible. So first of all congratulations for a good set of numbers. Sir, I have a couple of questions. First can you just speak to us about the volume growth which we have witnessed during that quarter four in for the full year as well.
Rajesh Aggarwal
So in the full year the volume growth has been roughly about 10%. The average price decline during the year is around 8%. So the total growth in terms of numbers is showing about 2%.
Bharat Gupta
Answer for the quarter past quarter I’m.
Rajesh Aggarwal
Not shed but quarter sales we are showing an increase of 32%. So you can increase that. So roughly volume growth will be around 40 or something.
Bharat Gupta
Right. So sir is primarily driven by the like the physic or the early onset of the monsoon. Or like is like. Can you just preface about the good amount of growth which we have witnessed during the quarter.
Rajesh Aggarwal
Quarter is not very important actually quarter is just due to the follow up because there were certain launches actually which we had planned like stroke had come in in the last year itself. So in the B2B segment we could push some stroke quantity and some other products were placed in advance. So generally we don’t do that very much. But still we could manage to get some parts of volumes from every segment like B2C, B2B and also from exports. So everything contributed and it was positive.
Bharat Gupta
Right sir. Secondly, with respect to the recently launched product Padi herbicide. So can you just brief us about the estimated market size of this product and does it complement Green label which is our existing product in the Padi herbicide category?
Rajesh Aggarwal
Yes, these are all complementary products. Actually because this is a predetermination I can add every type of swing at different price ranges. Because some of the solutions which we have are 300 to 400 rupees per acre range. There are some specialty solutions that go up to 600 rupees per acre range. This is going to be expensive product particularly for the farmers where the weed intensity is very high. And after using those generic solutions or even the new generation solutions they are forced to use the labor also because of that high density of weeds and the variety of weeds which are not controlled by the generic product.
So there we are spending about 4,000 to 5,000 rupees on the manpower per acre. So for those farmers we have bought this magnet solution which is going to cost them about 1800 rupees. And this will save them the manual labor and this will increase the productivity in their fields. Why? Because the entire recovery is going to happen by the chemical solutions which will decrease the competition from the leads. So the crop yield and the crop vigor is going to increase actually for this farmer and they will pay this money. So our target initial target is in the naturally segment.
And the basic target of achieving the sales is going to be from some east central part of the country and southern part of the country. So there will be major markets for this product. And talking about the market size, Peddy herbicide market is a very vast market actually. So if I talk about the generic product then it goes in large volumes. The tequila floor is very, very popular. Then the Spurgec came in, then the mixture. So there are a lot of products which are selling at very high volumes. So in terms of value we can anticipate to begin with a modest number of 10, 15 crores.
But in the second year itself you can touch 40, 50 crores with this product. So at this moment I am putting it in Maharatnas. Next year there may be a possibility of catching a focus. Maharashtra.
Bharat Gupta
Sir, with respect to herbicide only, how do you see the current level of demand playing out because of the early onset of monsoon and what is the inventory position out there in the market? With respect to the agrochemicals across the nation.
Rajesh Aggarwal
Generally, if you talk about the inventory portion in the market, if I don’t see the inventory I want to show the distributor will never see the inventory because.
operator
Sir, sorry to interrupt but your voice is not clear. Can you come a little closer to your speaker?
Rajesh Aggarwal
Yes, yes, yes, yes.
operator
Thank you. Sir.
Rajesh Aggarwal
The inventory situation in the market is. I’ll say there has been the signals of shortages from 3, 4 months, particularly. If I talk about the rice herbicide, the corn herbicides, there are shortages in the market. So we were building up because we are the manufacturer of technicals for many of these products. So we were building up our brand. And we are trying to place it in the market in the best possible manner. Even for the non selective herbicide, the demand is going to start immediately and there are shortage signals on the market. I can say that June should see a good demand for these herbicides, better than usual. So now it depends how much we are able to place. We are in a good situation. But still that tightness we are also going to face in the month of June because there were manpower shortages which happened after the war. Luckily the war settled fast so things have started improving.
But still the manpower, the entire manpower is going to take some time to come back.
Bharat Gupta
Also sir, like you mentioned, there are some shortages and like in respect to the quantities which are about to get dispatched. So this with respect to industry. So has the industry players taken advantage of the situation in terms of increasing or creating a price hike? And how do you see the trend of the raw materials placing out during the quarter and how do you see it for the next quarter?
Rajesh Aggarwal
Demand and supply always plays an important role for the herbicides. It’s a small window actually. So yes, there is some price rise internationally also in the domestic market also, but not very big. But still like I don’t see that already some advantages people have started taking. But yes, if the shortage prevail then there can be some price rise in the market. But we have to keep the fingers crossed for that.
Bharat Gupta
But like Q, we haven’t taken any pricing hike in this particular season. In the start of the season.
Rajesh Aggarwal
I didn’t say that actually last year was a level of price where there was a price drop. There has been some price improvement in the month of April, so which has gone up to May and there will be another price. So that’s a regular practice. Every year you have two to three revisions actually generally till August. So first revision comes up in mid April or May, second revision comes in somewhere in June. And if the season is good then the third revision comes in July also last year they were all negative because July was a very dry month.
The monsoons were very very erratic. So if the rains are good and the season is positive then there will be positive region.
Bharat Gupta
Right Sir. And sir, like with respect to the raw material. How do you see the trend playing out?
Rajesh Aggarwal
Raw materials like you have to make an arrangement because it’s a cyclic industry. That is one reason. Actually we have to plan four months in advance. So generally we’ll keep always the stock for four months. Three to four months. You cannot do it 100% for. But all the major requirements to keep the raw materials in stock. So that’s the industry practice which you have to. With our large variety and our. I would say the integration. Sometimes we are forced to plan for technicals, formulations, brands, everything we do that. This year I had to engage some more go downs, extra go down facility which we did actually because we were preparing for the season.
So I can say that iron is ready. But nobody can fulfill the 100% demand. Because our business is a stable type of business. When I say stable like if the rainfalls are low then you will end up selling 90%. If the rainfalls are big, you end up selling 110. I cannot do 120, 130. Because achieving more than the target is very very difficult. Because you cannot supply at that speed with the market wants sometime.
Bharat Gupta
Right? And sir, if the situation continues to remain as point is currently it is in terms of overall like you have guided. You are looking out for a double digit strong double digit growth. How do you see the volume growth as well as pricing like in a range. What kind of a ballpark figure.
Rajesh Aggarwal
It becomes very difficult to predict. I’ll continue with my guidance of double digit growth only we’ll beat the industry. That is something I would say. I don’t want to go very bullish. That will do this that it will be just beating the industry as always.
Bharat Gupta
Sure.
Rajesh Aggarwal
Thank you.
Bharat Gupta
And and said our last question with respect to Cairos. So any progress which you can share on this and going forward how much benefit can occur for us with respect to gross margin improvement.
Rajesh Aggarwal
Karos has been positive. In the first year itself we have registered a profit of roughly about 2 crores. So in this fiscal we can expect a profit of around 1012 crores from this Caro business. But next year it will multiply. Once we go into the larger chunk of business then it will multiply. But again we had bought this company for 5 all crores so 6 crores. Maybe we’ll make a recovery in year 200%.
Bharat Gupta
Right? Right sir. Thanks so much sir. I will get back in the question. Thank you so much.
Rajesh Aggarwal
Yes, thank you.
operator
Thank you very much. Participants who wish to ask questions may press star in one at this time. The next question is from the line of Arnav Sakuja from Ambit Capital. Please go ahead.
Arnav Sakhuja
Hi. Thank you for taking my question. I just wanted to confirm one thing you mentioned earlier for Q4FY25. What was the volume and value here?
Rajesh Aggarwal
Quarters are important but is the strategy which is more important? I believe so. We are going on this fiscal FY26 preparing for this. On this preparation. Yes. There has been some volume growth also and value growth also. Like in the last year. If we calculate in totality we have calculated that there has been a value degrowth of 8% means the volume has gone up by 8, 10% and the value has gone up by 2%. So that way it is the value below the price improvement would have been won’t have been there in the last quarter.
There is some price improvement in the quarter one which is the running quarter now. So further price improvement will be depend on the market how the market moves further.
Arnav Sakhuja
And just one more question. So you were talking about the Capex which you completed the 150 crores of capex. Just wanted to confirm this is for the Dahed plant.
Rajesh Aggarwal
We are going to capitalize the Dahedge plant because we have got the approval for the hedge plant and we had spent about 150 crores in the hedge in the current fiscal. The Sota Nala plant was a Rajasthan plant which we are making. So we have spent about 50 odd crores there already and there will be additional investment of about 100 crores in the new projects which will be majorly attributed to all the maintenance capex because we keep on expanding small small faculty across plants every year.
Arnav Sakhuja
Okay, thank you.
Rajesh Aggarwal
Thank you.
operator
Thank you very much. The next question is from the line of Sneha Jain from SKS Capital. Please go ahead. Sneha Jain.
Sneha Jain
Hello. Am I audible?
operator
Yes ma’ am, you’re audible now.
Sneha Jain
Thank you for the opportunity. I wanted to ask how many new registration or new products are we going to launch in FY26 and with the majority of them would be 93 registration.
Rajesh Aggarwal
We are going to launch six products in NY26 and all these are expected to launch soon. So the first product is going to be Altair which is a Japanese collaboration mind 3. Then there is Centro SE which is again mixture product which is 93 Brahmos is my own technical which I made and I am going to launch a formulation. Formulation would be 94. The technical registration was 93. And news is another mixture which is going to be 93. Vista Gold was a good product. It’s a relaunch of that. It is line four for another product is spoke which has already come in the FM not scope.
It is Sparkle. Sparkle is going to be 93. Again it’s a perfect word which is going to come in a collaboration.
Sneha Jain
Okay, okay. Sorry. Yeah. So I wanted to probe a bit about on the reciprocal tariffs the in of us basically both on us and on Japan which is a mega trading partner for us. And will we be signing further JV contracts manufacturing in India with them.
Rajesh Aggarwal
Everything is going to be happening. You have to understand that pesticides are the commodities which are the restricted products. You have to register then you can sell. So at the moment I don’t have any registration in USA and our major part of the business comes from the domestic market. My 95% business is domestic business, 5% is export. That does not restrict me from doing the international businesses because we are investing too much on registrations in Japan, in America, America including South America and North America. All the countries Europe and many parts of the world. Many of my products are under registration because the major.
You have to understand one concept. The concept is China plus one and Europe plus one. Previously these were the manufacturers. Now look, people want to look at the until they sources who can manufacture and supply to them. So India will also be one important partner for America. And if my product gets the registration and I am the in competition then they have two competitors. They have to compare me with China or any other Indian company. If I am competitive, definitely I will get the market. And even if I am little expensive then also because the other partner who is going to work for me in America or in any he has invested money on me and he is banking on me.
He has to take some quantities from me which can be large or small. It depends on the type of working we have. So the dependence comes in automatically we get the share. So we expect that yes, we are going to grow in the international markets. But I don’t want to give any big data for that. At the moment we are a domestic play company with 95% contribution coming from the domestic.
Sneha Jain
So can the Japanese company give outsourcing to us?
Rajesh Aggarwal
We are already working on this. I’ll make the announcements once the business starts. We are work already working with Many companies for many products agreements are okay.
Sneha Jain
And so last question would be what would be the growth levels for us in FY26 and for the next three years?
Rajesh Aggarwal
I mean the outlook basically what would be the growth level? It’ll be. The strategy is the premiumization. We wish to bring the efficiency in the system. We wish to bring the premium products to the market. We wish to introduce newer patented IPR protected products. We wish to give new formulations, new technicals. We wish to do the crimes activities for the companies. So there is a lot of new technology products which are going to come from the stable of I. We are going to grow in the domestic markets and well as the interaction.
Sneha Jain
Thank you so much.
Rajesh Aggarwal
Thank you.
operator
Thank you very much. Before we take the next question we would like to remind participants that you may press Star in one to ask a question. The next question is from the line of Karthik from Samatwa Group. Please go ahead.
Kartik
Many congratulations to the management of insecticides India for a good set of numbers. My first question is what is the outlook on the exports and is any the capex that we have recently done and the one which is in pipeline aimed at increasing exports.
Rajesh Aggarwal
Exports generally don’t need too much of capex. It’s a routine capex which I’m investing for the export market. Because for exports you have to invest on generation of data. We are having three NABL labs and the fourth one is also coming up. So I think it’s four now one GLP lab which is in house. So we develop the impurities in house. We develop the technicals in house. We develop the all the reference standards in house and that after that we give it to the CROs. It’s a regular practice that the R and D teams have to do.
We have a team of more than 150rd scientists which are engaged regularly on working of the on development of products in different stages. Formulations, technicals, improvement of recipes. So they are doing their work. So that is a regular salary which I am paying. So it goes from there. So nothing big. When I sign the export agreement from any company those companies have to generate the data in their countries. I have to give them the centralized data which I keep on generating regularly as a regular practice. So there is no special expenses which I have to incur for export apart from keeping export office which I have at Mumbai.
Mumbai builds a team of about 20 odd people who are sitting for the international businesses. So that is the expense I am making at the moment. My contribution from the international market is coming to roughly about 5% that will grow slowly. There is not going to be any dramatic change. But yes, we are expecting some international order from big companies. So once they start then it will start changing. So once the business start happening because initially you get the trial quantities, after the trial quantities are successful then you start getting the regular quantities. Once the regular quantities start happening then yes the international business will start growing directly.
But at the moment contribution is.
Kartik
Thank you sir. The second question is on slide number 10. There we have a good practice of actually showing product freshness index. And we have always witnessed an exponential growth in each of the preceding years. However in FY25 it seems to have such 511. Is there. Is there any specific reason behind this or tapering Is very, very interesting point.
Rajesh Aggarwal
You have picked up. Actually I would like to say as we grow in the premium products. We have grown in the premium products. Here again in this fiscal. In the B2C segment it has been the growth. But in the B2B segment I have suffered a degrowth of about 20% in the past year. What was happening that when the new product is introduced people take P2P so when they were taking P2P we are including it in the freshness index. But this year they have taken bulk. So that showed a negative thing. I’ll make the improvement in our presentation that from this year I’ll only show the brand and not show the P2P production.
So that improvement will be done and that will be visible. So in totality I can say that the follow up or the following of insecticide India tractor brand products is very high in the market. The response is very good. And that is the reason that I’m able to add four more products to my FM segment. And all these four products were introduced in the last year. So I’m that confident with my products which I’m launching. So that confidence also goes with the freshness index. So incidentally since in the past these B2B were also covered so that is showing negative trend but that will improve.
We’ll remove B2B from. For better clarity of market.
Kartik
Mentioned that there could be a hundred crore outlook from this subsidiary. Are we sticking to that guidance? Sir.
Rajesh Aggarwal
Could you repeat the question please?
Kartik
Subsidiary arrows which we have recently acquired and last time the acquisition news was shared with the shareholders. You have also given certain guidance that there could be a possibility of 100 crore in FY26. Are we sticking to that guidance from the subsidiary in this financial year?
Rajesh Aggarwal
Yes, I recently I just in answering another question I said we’ll be wasting up my path of about 10 crores plus. So to reply her question, yes, we’ll stick to 100 crores.
Kartik
Thank you so much, sir. And all the best for the future endeavors.
Rajesh Aggarwal
Thank you. Thank you.
operator
Thank you very much. The next question is from the line of Kunal Tokas from Fair Value Capital. Please go ahead.
Kunal Tokas
Hello.
operator
Yes sir. You’re audible
Kunal Tokas
okay. Yeah. Just secret questions first. Just can you give us a brief. About your joint venture with Oat Agro. From Japan and talk about progress has been made in new products from that joint venture.
Rajesh Aggarwal
It’s a whole story. We tied up with the oat Agro in 2013. So now there are 12 years passed. So what is the job of the JV? The job. The job of the JV is to develop the new products, test them in Japan and test them in India and then give it to the two partners. The two partners are O and Insecticide India. So yes, they develop the product and passing to us. And now we register these products in different geographies of the world and we have to launch.
So the first product which was developed by them. So it has passed many tests and other things. So the name is given to it, the IUPC name. We can even name the other things because it takes a lot of time in all these. Passing through all these stages. Scaling up is complete. Very shortly we are going to make a application in India. And after that it will be applied in different part of the world.
Kunal Tokas
This be the first product to be. Commercialized out of this joint venture.
Rajesh Aggarwal
Yeah, this is going to be the first product which will be commercialized by the jv. But there are series of products which are after this. And let me tell you that these are the real inventions which are the new chemicals. We call it nce. New chemical entities with different modes of action. These are new modes of action. No copy products. Long. I would say long chain products which has come after a lot of research. Because we have research more like we develop more than 5,000 products every year. And in 12 years we have tested more than 60,000.
After testing 60,000, we got 2, 3.
Kunal Tokas
Can you maybe also provide. Any idea about the potential of this new product. Or the other products that are yet to come?
Rajesh Aggarwal
I will only say when you develop a new product and talk to MNC they will say 10,000 crores is the expenditure in developing a product that much only? I’ll say and not say anything else.
Kunal Tokas
All right. And the working capital gains that have increased. This is purely driven by the inventory. Buildup that you
Rajesh Aggarwal
Are voice is not very clear. Actually I have to make an estimate.
Kunal Tokas
What about now, sir?
Rajesh Aggarwal
What? Yeah, better.
Kunal Tokas
Okay. The question was about working capital gains that have increased. Is this only because of the inventory. Buildup that you are.
Rajesh Aggarwal
Yeah, it’s temporary because of the inventory buildup. And you’ll see the improvement in the system because we are very very serious on this. I already made a note in my earnings on this.
Kunal Tokas
Just the last question. So you talked about the direct effect that Curry would have which would not be much on iil. But do you think that Curry might induce China to maybe dump some products here and that can disrupt your business?
Rajesh Aggarwal
Again, voice is cracking. But I have understood that you are trying to discuss about the USA tariffs on India and China. Definitely that will always have an impact. But it’s the matter of registration. We are not a free product. We are not selling a free product. Every Chinese company has to register their product in the different country wherever they want to sell with every customer. Same is the case for India. Register every product with every customer. So it’s whosoever has the registration is expensive or inexpensive. The other person has to buy because he don’t have other other option.
So if the other person has to buy then how competitive your product is. It will depend on the quantum you get. So things are important. But overall I can say there is no much stress in India you do this. The only thing is that the protests are going to expensive become expensive for American purposes.
operator
The line for the participant has been disconnected. We’ll move on to the next question. The next question is from the line of Agastya Dave from CEO Capital. Please go ahead.
Agastya Dave
Good evening sir. Am I clearly audible?
operator
Yes, yes, yes sir. You’re audible
Agastya Dave
sir. Thank you very much for answering all the questions in such details. So most of the questions that I had have been covered. Sir, I have one question on the other expenses. There has been a significant rise in that. Can you point out any particular line items which have seen increase and any any one off items there?
Rajesh Aggarwal
I don’t think there are any one of items. I’ll give it to the CFO for explaining it in front. Marketing expenses would have been increased. But he’ll explain better,
Sandeep Aggarawal
right? So there is an increase of around 57 crore in the total other expenses, you see. And the major expenses has gone up to the business promotion field. Promotion expenses. As we are a company, we are in the new product launches. So we have to work very hard with the farmers in the field. So for that you have to do some demonstrations. Also you have to do show the. Product to the farmers you have to show the I. So those expenses are going up majorly expenses and. And if you see the exact then I can give you the advice bifurcation also. But the majorly is this
Agastya Dave
sir, though. Line items numbers are there. Ad and sales promotion and DUSA commissions. Last question from my side is because there was an 8% drop in realizations a lot of the line items have moved around significantly if we consider them as percentage of skills. So for example, gross margins have expanded. So the current gross margins are indicating 32% gross margins. Should we consider then going forward and same with other line items because there is such a huge distortion in the realization and a related question there is what about the margins going forward? Given I’m assuming that the raw material basket has kind of stabilized now for pretty much everyone and the demand is looking good.
So how do you see these things varying going forward?
Rajesh Aggarwal
Rajesh, again we have shown a 50% improvement in our profit margins. First we would like to stabilize it around this. We are already on a growth path. I already said double digit growth. I’m already talking about the premium product. We have been working on this strategy for last three, four years. We are cutting down our tail Cutting is a regular exercise at ielts. Because whatever ports are not paying, we are cutting them off. So all these things, the improvement which we had started four years back are paying off now. They will continue to involve but I’ll not say any dramatic change.
But yes, Definitely we’ll see 200 to 300 points change actually in the levels.
Agastya Dave
Even from the base of FY25. Sir. Even on the base of FY25 you expect now 200 to 300. Why are you picking it as a benchmark?
Rajesh Aggarwal
Yes, there will be improvement but it will be slowing because customers are sure sir.
Agastya Dave
I understand that sir.
Rajesh Aggarwal
Supplies and then the speed won’t be cannot be like that. Yeah. Thank you.
Agastya Dave
So very well done sir. And sir, a question. Employee cost now that the Dahish plant is commissioned, how much employee, how much do we need to invest in our employees?
Rajesh Aggarwal
Because I cannot hire and keep them on the plant overnight because of already 25% just a 30 employment already whoever planted and they are working there because water trials expense already Horai in terms of the expenses per kg terms of the plant expansion Because I’m already segment.
Agastya Dave
So I must congratulate you on that and I hope.
Rajesh Aggarwal
Thank you.
Agastya Dave
Congratulations for that and good luck for that sir. So thank you for giving me the time and opportunity. Opportunity all the Best sir. Thank you.
operator
Thank you very much. Participants who wish to ask questions may press star in one at this time. The next question is from the line of F. A. Narayan from Capricorn Research. Please go ahead.
Unidentified Participant
Rajesh, I’m an admirer of the way you have led the insecticides India over the years. I have given this progress that you have brought. I have two questions. The first one is given the 380 profit after tax has jumped from rupees 102 crore in FY24 to rupees 142 crore in FY25. Please give a response in one sentence. What you did different in FY25 that there is such an amount of significant improvement in performance.
Rajesh Aggarwal
Simple. The strategy of premiumization. We launched products continuously and we kept on improving the product mix. And this is going to continue for future
Unidentified Participant
good.
Given this level of performance that you have built, what is that that you plan to do in FY26 to take the company to the next level?
Rajesh Aggarwal
We are continuously improving the product mix like we named the product as FM’s focused Marathnas and Maratna. So we are focusing particularly around the focus Marathna. Improve the number of focus Marathnas from 12 to 16 which is itself indicator that yes, these are going to be the biggest products and we are going to work around these products, advertise these products, develop these products in the market. And my team and the trade also gets that information that yes, if this is coming in this segment then companies focus is going to be around these.
So this will continue and help us actually. And then we are having some mega launches actually in this fiscal also because there are two collaboration products and rest of the products also which are coming up mostly either by my own technical or they are the mixtures which have got IP protection. So these all these things are very very favorable for the company and are going to support because here when we supply these type of solutions then we become the solution provider company not the product.
Unidentified Participant
Okay, so given this, do I consider that FY26 will be similar to the kind of growth that we have had in FY25?
Rajesh Aggarwal
Growth will be good.
We are very very positive. Yes, there will be another jump but it will be good.
Unidentified Participant
All right, look forward many times. All the best to you.
Rajesh Aggarwal
Thank you. Thanks a lot for the appreciation.
operator
Thank you very much. Ladies and gentlemen. In order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Manish Jain From Wealthcare Advisory Partners llp. Please go ahead.
Manish Jain
Congratulation on a good set of number, sir. Sir, my question was that in your opening remarks you call that due to the war situation there are shortage of workers. So will it affect the placements in the first quarter? Sir.
Rajesh Aggarwal
Now the exceptional sales move under placements. Yes. If you have more people then there is a chance of producing more. This year we were prepared and we have been manufacturing since
Manish Jain
your wife. Sir, your voice is not clear.
Rajesh Aggarwal
Okay. Yes, there is some shortage of manpower. There is some shortage of manpower because when the war started so people from Jammu fled. Actually and not only there there was impacted other plants also because people were worried and they were receiving calls from the people in the village. Come back to the village. So there was there is some pressure on the manpower. It will take time to recover. So I cannot do 100% what I want. But yes, definitely it will have some impact actually because had that not been there then the performance would have been much better than what it is going to be today.
I can only say that we are already on a growth. So we lose some market share. Sir, in this quarter we never lose the market share. In last 20 years I have never lost the market share. So we have enough. So we have enough stock in the market. We always plan better from the market from the competition. That is the reason we are able to grow better. So we have. We prepare ourselves. We take risk. But these are calculated risk.
Manish Jain
In short we have enough stock with the market, right?
Rajesh Aggarwal
Why do you want your words to come from my mouth? Actually
Manish Jain
it’s okay.
Rajesh Aggarwal
We know the market and we are working hard.
Manish Jain
Okay sir, my next question and the next and the last question is that when will be able to do a 10% net profit margin? Maybe next year. Next year possible.
Rajesh Aggarwal
No, it’s a difficult question for me to reply up front. So EBITDA levels we have already crossed 11 and a half. It will keep on improving. So when it will match the taxation then we’ll have it. I can say that this should be 2 to 3 years target.
Manish Jain
Okay sir, as a congratulation once again and best of luck sir.
Rajesh Aggarwal
Thank you.
operator
Thank you very much. The next question is from the line of Karthik from Samatva group. Please go ahead.
Kartik
Thank you for allowing me to ask another set of questions that you were planning to hire for some senior roles and management level. Is that hiring done or are we expecting some more hiring to happen?
Rajesh Aggarwal
There are things in process so as they will happen because you have to form a strategy then you have to find the right type of people. And then people get free from their current assignments and join you. We have been looking at people around. There will be joinings which will happen during this year also.
Kartik
Okay. Can we. The cost.
operator
Mr. Karthik, your voice is not clear. No sir.
Kartik
Where I’ll repeat once again. Is it better?
operator
Yes. So it’s better now.
Kartik
Thanks. So the question is. The reason for asking this question is. Is majority of costs related to senior leadership or management related hiring already captured in FY25 or are we to anticipate majority of those costs to be reflected in FY26?
Rajesh Aggarwal
I would say that the routine is going to cover that. So routine changes in salary this year may be between 15. About 15% plus. So which will cover the additional manpower required in 26 again when the Sota Nala plant come in then there might be some hike. So it will depend that we have. We are yet to give the numbers that how much will be the sales gain and what all. But yes, I think we should be able to maintain with 15% CAGR on our budgets.
Kartik
Great. Thank you. And my second and last question sir is in the past Q4 was always subdued when compared to Q3. Not absolutely, but relatively Q4 was always subdued related to Q3. What has changed in this quarter at insecticides that Q4 made similar revenue as compared to Q3. And is this sustainable in the future as well? Because are we expecting the lumpiness to settle down going forward? As we have witnessed this quarter.
Rajesh Aggarwal
Actually we don’t form our strategy quarter wise. There was the pressure on the back of the mind that forced the Q4. And then the expectation from the new season was very good. And then we had certain new solutions which were selling in this Q4. So these were the reasons which FDC is going in Q4. And then international market also responded. B2B market segment also responded because B2B was also trading behind and they were also under pressure. So I can say that pressure has done some work. The strategy has done some work. And then of course the expectation from the new season was very very positive.
Because already the IMD and the other agencies had started making the announcement about good rainfalls for this year. People needed the preparedness and the inventories in the market were too low. People needed those products. So that’s why it happened. So I will not say that this is not repeatable, should be repeatable in future one. Thank you sir. That’s all from mine.
operator
Thank you very much. Ladies and gentlemen, due to time constraints that was the last question. I now hand over the conference to management for closing comments.
Rajesh Aggarwal
Thank all the participants for attending this session today with your queries. You have asked very important questions which will be enlightening all other people who are not present in this call or even who are present in this call. Thank you very much for your positive and welcome. Thank you.
operator
Thank you very much on behalf of Insecticides India limited. That concludes this conference. Thank you for joining us. And you may now disconnect your line.