Key highlights from Insecticides (India) Limited (INSECTICID) Q1 FY23 Earnings Concall
Q&A Highlights:
- Himanshu Upadhyay from O3 Capital asked about the average size of SKU five years ago and currently. Rajesh Aggarwal MD replied that the sizes on an average are becoming big. Some products in the past that were INR100 crore plus brands, are now not in existence. However INSECTICID will be creating certain 100 crore plus brands now. Also, INSECTICID has some 7-8 products that will be crossing INR 50 crores in FY23.
- Sathya Narayana of Capricorn Research asked if the company agrees that interest subvention of agri loans will be favorable for pharma friendly companies like INSECTICID. Rajesh Aggarwal MD replied that it will always be helpful.
- Sathya Narayana of Capricorn Research enquired if face value split also is on the table with the impending Board meet to consider a bonus issue of shares. Rajesh Aggarwal MD clarified that the company is going ahead with one thing only and the split is not on the plan.
- Riju Dalui asked about the drivers of 20% growth in 1Q23. Rajesh Aggarwal MD answered that the growth is due to the new generation formulations made by the company and growth from target products. In some of the other products also the company has made growth. The company added that price contributed 7-8% of the growth and the rest by value.
- Riju Dalui enquired about export growth in 2Q23 or on a full year basis. Sandeep Aggarwal CFO answered that exports generally will move slowly and the company was aggressive initially on the target but by seeing dents in the markets, the company has reduced the number to INR150 crore. INSECTICID is confident of achieving the target.
- Abhijeet Bora from Sharekhan asked if the revenue growth can be expected in the 18-20% range for FY23. Sandeep Aggarwal CFO replied that is the target kept internally. So 20% can be expected for FY23.
- Abhijeet Bora from Sharekhan also asked about the margin guidance over the next 2-3 years. Sandeep Aggarwal CFO answered that it depends on the market situation. However, the company has the target to continuously improve margins. Margins should improve 100 bps YonY for which the company is working towards.
- Abhijeet Bora from Sharekhan enquired about the FY23 capex guidance. Sandeep Aggarwal CFO said capex for FY23 should be about INR40 crores, largely related to the pending capex at Dahej and some towards Chopanki which is in final completion stage.
- Saurabh Kapadia of Asian Markets Securities asked about JV products and plans about further capacity expansion. Rajesh Aggarwal MD replied that all these products will be bigger in terms of value but smaller in terms of volume. These will be pharma plants, most of which will be setup in Dahej. The expense will be INR25-30 crore per annum for now.