Insecticides (India) Ltd

NSE:INSECTICID

Earnings Call Transcript 2023-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to the Q1 FY '23 Earnings Conference Call of Insecticides (India) Limited, hosted by Asian Market Securities Limited.

This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual results may differ from such expectations, projections, et cetera, whether expressed or implied. Participants are requested to exercise caution while referring to such statements and remarks.

[Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Saurabh Kapadia from Asian Market Securities Limited. Thank you, and over to you.

[Saurabh Kapadia, analyst]

Thank you. Good evening, everyone. On behalf of Asian Market Securities, I would like to welcome you all for 1Q FY '23 Earnings Conference Call of Insecticides (India) Limited.

From the management, we have with us Mr. Rajesh Aggarwal, Managing Director; and Mr. Sandeep Aggarwal, Chief Financial Officer of the company.

We will start the call with [indiscernible] and then we will move to Q&A session. I now hand over the call to Mr. Rajesh Aggarwal for his opening remarks. Over to you, sir.

[Rajesh Aggarwal, executive]

Thank you very much. Welcome, everyone. On behalf of Insecticides (India), I, Rajesh Aggarwal, MD, extend our very -- heartiest welcome to all the attendees of today's investor call. So today, we are going to discuss the quarter 1 results which ended on 30th of June 2022.

First of all, I'll discuss about the industry. This is a growing industry of agrochemicals worldwide. If we look at the world market size, which is about $60 billion, more than 2/3 rather, I would say, about 70% of the market worldwide is generics, which means there's a huge potential for a country like India to grow in the international markets. And if we look at the agrochemical consumption in India, which is about $3 billion, we are also a net exporter of more than this amount, about $3.5 billion worth of agrochemicals are exported from India.

So if we look at the current market dynamics, the international geopolitical situation which is tough, so -- which has created one good potential for India, which is China Plus One policy. Now all the countries, all the developed countries, all developing countries are looking at partners, and that India is shooting in that position where they wish to develop one more supplier apart from China. And if we look at today's situation worldwide, the rains, the situation of drought which we are hearing from various parts of the world, the war situation, overall, it is leading to food shortages.

So I can say that people are realizing that food is very, very important, and which is creating a lot of scope for agrochemicals worldwide. And the market is huge. The world market is huge. In India, we see the domestic consumption which is just $3 billion. If I take it as $3 billion, which is less than $5 billion -- 5% of total world market, it consumes more than 70% -- like it's -- with 5% consumption of agrochemicals it is taking care of 17% population. And we are also exporting. So this means that there is a huge potential of growing the agrochemicals or a market within the country and also in the international markets. But yes, the type of agrochemicals which are coming now, which were using in the past are changing. A lot of new generation products are entering into the market. And we have been certifying India, we believe in innovation and R&D, and we are also trying to be the part of this change, and we are bringing new molecules by our R&D centers and by the efforts of our scientists.

If you look at the crop protection, more than 20% to 25% crop gets lost in the fields or in the storage condition by the insects. So which means that again, the potential is huge and opportunity is huge. We at Insecticides (India) believe in innovation, and we run 4 R&D centers. 3 R&D centers are for agrochemicals with different vision. When I say different vision means 1 R&D center is unique which is a JV and it works for the product discovery. Apart from that, we do a lot of work on formulation development, and we believe that the consumers need the solution. They do need the product. So we are trying to bring newer solutions by creating the mixtures, by creating new formulations, by mixing 2 products or 3 products and developing the synergistic effect, taking the patents wherever we are able to prove our synergies and trying to bring those products available to the farmer, which are the readymade, I would say, formulations or readymade mixtures of 2 or 3 products. which can give wonderful results to the farmer and we are getting a good success in the products, which are launched in last 4, 5 years in this segment.

Similarly, we are also working on reverse engineering all the products which are off-patented. We are trying to develop their technicals in India, make them first time in India. And today, I'm glad to say that most of the registrations which we are getting and the products we are launching are more than -- more in 9(3) range than 9(4), which means they are manufactured first time in the country.

Our laboratories are also doing very well actually, like 3 of our laboratories are NABL. And recently, we have done a GLP accreditation. GLP is a big thing, I believe, because across the country, we have got the 52nd GLP accreditation. And this 52nd GLP accreditation is across sectors. It is not agrochemical or chemical alone. So in the country today, there are only 52 GLP laboratories when we have got this accreditation. So this is a big further indicator.

I believe that along with the agrochemicals, biologicals are also winning a lot of popularity. Looking at the situation because, today, if you look at the world, it has started talking about organic, though there are no organic solutions available today in the world, which have become very big. It is a developing industry. But I believe that in the times to come, lot of organic solutions are going to come actually and they are going to become an integral part of crop protection, which we are just in the nascent stage now. So we can look after the health of the soil. We can look after the health of the plant through biologicals. And along with this, also, we can fight with some insects and diseases, and we can delay the usage of agrochemical, I can say, or we can review the quantity of chemical, which is going in certain places by using the biological things.

But yes, a lot of development is going to take place here. We run our R&D center in this, but now we are setting up a new company. And this new company will be starting its business in the next fiscal, actually. We have targeted -- we are still in the initial stages of setting it up. But yes, we are -- our scientists are working in the R&D, and we are trying to develop certain products. Some of our range is already in the market, which is being outsourced at the moment. But we want to do the major activities in-house by setting up this 100% fully owned -- fully, I would say, our own subsidiary. So we are setting up this subsidiary in the name of IIL Biologicals Limited.

And I would also like to talk about patents. In this quarter, we have backed a few patents, which has come out of the JV. But along with the JV, our all the R&D centers are also filing for patents. As I told you, there are 3 R&D centers which are working for agrochemicals. And 1 R&D center is working for biologicals. So all our finally filing patents, and we have filed more than 32. And at the moment, I believe we have received half of them actually and others are in process. So -- and this patent filing again is a continuous process because as we are developing newer products, newer technologies, we are filling more and more patents regularly. And the vision is that slowly but we should be coming up with the new range of products, which should be relatively a novelty for the market so that we can build up good fortune for the investors and a good advantage to the farmer or the consumer can be given, and we can bring out the products from a new range of new seeds.

Indeed, current year, we have launched 2 big products. One is called Torry, which is a herbicide for corn received a very good success. We could also make 2, 3 partners in this. And with the partners, we have done a very good sales for this product, make a good beginning actually in the season. And along with this, we have also launched on patented product through Nissan, which is called Shinwa. Shinwa is an insecticide, again, unique product, patented product, which is market by us in the country. We've got 1 small season actually in the month of April and May. And again from August, the new season is going to start. So from this product also, we are quite hopeful and we believe that it should help us in growing and establishing the brand.

Along with this, we also plan to launch 2 new products -- 3, rather, 3 new products in this quarter in Q2, which is namely, Izuki. Izuki is again from the house of Nissan. So it's a mixture product, a fungicide, which is very good for various crops, particularly rice. And we have the -- this product is a mixture of 2 fungicides, which comes from Japan, one is from Nissan and the another one is from Hakko Chemicals. So this is also a unique chemistry. Apart from this, we are going to manufacture 2 new technicals actually in the plants. One is going to manufacture in the Dahej and one is going to manufacture in Chopanki. So we are going to launch 2 new products, mainly Supremo and [ Stella ] out of this, and we are also very hopeful that this should also become a good and big brands for tomorrow.

So along with this, I would also like to talk about the launches which were made in the COVID period, made in these last 2, 3 years. So the big launches are Hachiman, Kunoichi and Oxim. And I believe these are going to be very good products and big products for us. Hachiman was -- it is for soybean. We've got very good response in quarter 1 and also in quarter 2 with this product. Kunoichi is doing fine and it will be growing because after the rains we -- it's a miticide, the demand is going to come. Oxim demand is also going to come in the second season. So I mean to say, the new launches, which has happened in past 2, 3 years, they are being very good actually, and they are helping us in generating lot of volumes.

Now in terms of sales. First, I would like to talk about the B2B segment. Here, I would like to tell you that the B2C segment is also growing for the company because the new launches, the partners are also taking interest. So we are partnering with some of the companies, and we are sharing some of the products with these companies, the new launches, because these are the new chemistries and all the companies are keen. So this is increasing our B2B segment. But the basic target of launching this product is B2C because we wish to bring the new technology directly to our farmer in our product range, in our product scheme. And this year, we have very clearly divided our product range into Focused Maharatnas and Maharatnas, followed by Gold and Silver range of products.

So Focused Maharatna as the name suggest, is the main key and followed by Maharatna because the number of Maharatna were increasing. And this year, when it crossed 30, then to make it simpler for the team and for the market, we made 11 products as Focused Maharatna and about 20 products as Maharatna products. And we wish to target minimum 2/3 market share from these 2 range of products, actually. And the Gold range and silver range will follow.

So the idea is so that the team and the market is aware that these are the products where we are focused, which are the products which has to be sold first in the market. So since a lot of new products are coming, so we had to do some tail cutting in the old ranges. So we have identified and put about 50 products in the Silver range and there are about 30, 40 products in the Gold range. So the idea is Silver range is the tail cutting range, which means these products are to go. And we are trying to bring the new mixtures and new solutions into the -- our range by Focused Maharatna and Maharatna. Of course, we have better margins. There will be new generation technologies. There will be majorly green acres constituting majorly the green technologies. So ultimately beneficial for all.

If I talk about the seasonal situation. This year, the season is little delayed because the monsoons were a little late and then there were continuous rains. So some of the crop got destroyed at certain places, some were -- there were resowing, some areas are doing well. Other areas, there is excessive rainfall. But the good part is that everywhere, there is water. The water canals are full, the dams are full, which gives a good hope for the new season. Yes, there is excessive rains at certain cases, which is not wanted at the moment. So due to which some sprays get delayed or even, I would say, some -- one of the spray is gone from many parts of the country. But still, the market is very, very aggressive, very, very good. The growth is very good. There is good demand actually from across the -- in the Q1, we have seen good demand for the herbicides in particular. We have seen good like, market is asking for good quantity of products, actually. So herbicide this season is still continuing in certain areas, which is extended sale, I would say. The insecticides season has just started. So we are quite hopeful.

But the Q1 is very, very good, like there has been a growth of about 20% in the revenue, 19.5% precisely. We have closed to at about INR 560 crores with the EBITDA margin of INR 58 crores. The EBITDA growth is little lesser, which is about 10.5%. It should have been more. But this was the season which was basically for herbicides only and the Maharatnas and Focused Maharatna moment was not to the desired extent. I believe, generally, we -- the second quarter is very, very good, which is where we are able to move around our Maharatna and Focused Maharatna products, and it should be helping us in increasing the profit margins and also increasing the sale numbers actually in this quarter.

So the target for EBITDA would be to increase by about 100 basis points. If I talk about Q2, in the Q2, the total sales volume, we have done the growth of about 20% in Q1. I believe we should be able to beat this Q1 growth in Q2. So the numbers of Q2 will be still even better. There is growth both in the domestic market as well as the international market, there is a good potential. But we accept a target of about INR 200 crores for the international markets, which have toned down a little to INR 150 crores because there are certain challenges which we are facing.

Today, if we look at the international situation the prices are disturbed and prices of all the commodities have gone up due to which there is a lot of instability. Along with this, the currency worldwide has deteriorated too much, and the countries do not have the dollars to pay. So this has slowed down our exports because people are shaking to avoid the -- they are avoiding to place with big orders because of the non-consistency of price or the heavy price increase and they are converting these big orders into small, small orders and trying to take a smaller consignments.

But we are very, very hopeful that with our tie ups and the agreements which we have now, because we are investing a lot on data generation, particularly for the formulation as well as the technicals. When you have to send these new products to the advanced countries, then you have to generate a lot of data. And we have developed a potential of generating the impurities in-house by virtue of our GMP and which is helping us a lot in this data generation. So we are investing a lot on lot of technicals and we are signing with more and more companies actually to take our products to the international market. I'm quite hopeful though this year, we'll be repeating the last year sales.

Last year, the export business was about -- roughly about INR 140 crores -- INR 130 crores. So this year, we'll cross that. Roughly, we'll reach to about INR 150 crores. But in the years to come, this will have a very huge potential actually, and it will give a good opportunity and we'll be exporting both from our entrance at from our chemical segment as well as biological segment, and this is going to give us a good opportunity.

If I talk about the domestic market. This is the year where the people have started moving to the fields, with meetings, conferences, the farmer training programs. All have started in a big way, actually. And this year, we are very, very aggressive on the advertisement and media front also. We have signed Mr. Ajay Devgn as our brand ambassador. I believe he should be able to take our new products to the farmers actually and should build the credibility of the company in TV market. And we are very, very aggressive on mass media, both print and electronic and all field activities. And we are conducting lot of training program across the country. And we are trying to introduce all these new products wherever. Because already 2, 3 products are launched. 3 are in line and 3, again, I am expecting. So the target is to launch 8, 9 products into this year. And whenever we bag the registrations because that the registration is one of the toughest things actually for us which happens because the delay is continuously happening actually. And due to the delays, the products gets to be delayed.

So we launch as we get the registrations. We launch the products, we'll do the prior test launches. We'll catch the market, we'll fill the market, and we'll bring all these products to the market.

So overall, I would say it's a good potential. Q1 is quite good with a 20% growth. If I talk about Q2, Q2 will be surpassing these numbers of top line, like the growth should be 20% plus. The bottom line growth also should improve. The margins are going to definitely improve. Actually, we target EBITDA increase of about 100 basis points in this quarter and in the year as a whole. So with the good, I would say, good season, looking ahead, we are very, very positive on this.

Here, I would also need to discuss about the CapEx. Majorly, we have made the investment into 2 locations, Rajasthan and Dahej. So in Dahej, we have completed our SEZ plant. In Dahej, we are working on the major expansion in our technical plant where we wish to backward integrate and start certain new technicals. So 2 new technicals, 1 is already started which is namely [ Tim-bor], the another technical for this [ piston ] product is also going to come from Dahej. But this complete plant, we were targeting to complete it by September. But due to heavy rains in Gujarat, the construction activities are little disturbed, actually. So it might extend by about a month, so around Diwali, plus-minus, we should be able to start the operations of this plant. But we are almost ready and we are in the final stages of starting this plant.

Coming to Chopanki. In Chopanki, we have completed almost and we are into final stages. We should be able to start our plant fully in this month. Partially the activities are started. But again, we are going to start few more technicals, and we are going to increase the capacity of certain more products. And this -- everything is going to start in the month of August mainly. So we complete our expansions in Rajasthan in August, and we'll complete our expansions in Dahej in October. So that's the vision. So with this vision, we move ahead, actually. And I believe that this year should be a very positive year because the team is moving into the market. Our contract with the farmer is to the maximum contract with the network is to be maximum. We are conducting more and more meetings, meeting the people, trying to train the people physically, doing lot of trials in the fields. So I'm very, very confident of a good year ahead.

Thank you very much.

[Operator]

[Operator Instructions] We have our first question from the line of Himanshu Upadhyay from O3 Capital.

[Unknown Analyst]

Yes. Am I audible?

[Rajesh Aggarwal, executive]

Yes, yes.

[Unknown Analyst]

Yes. Congratulations on good set of numbers. And sir, my first question was on the patent received, the 4 products, and where the life is pretty long also. One is fungicide and 3 are pesticides. Can you tell the scope and the size of these products and what crops are they -- can cater to? And which are the markets to which we will like to market? And what would be the way we would like to take these products to the market? Will we take it individually or we want to take a multi-partner or multiple players? So some thoughts that on commercialization, size and scope of these products?

[Rajesh Aggarwal, executive]

We are bringing in a lot of products. Some products are coming through the Japanese partnership. So all these Japanese partnership products are generally patented technologies. There we'll be very, very choosy in making the partners. I'll go slow in making the partners, 1 or 2 partners I'll add year-on-year actually. I'll not go very aggressive in this. Rather, in case of Hachiman, we have chosen not to go ahead with the partners, and we just made 1 partner. 1 Plus One partner was there which we -- the target is to keep the number of partners little lower.

You see, we have not thought about setting up any partner this year, which is a fungicide actually. But to other products, basically, which we are bringing -- which are generic technologies, actually, which are developed for the first time in India, there we chose to go ahead with some partners, actually. So we started with little number of partners, but we'll be adding partners here. But this time, we'll be choosy, again, 2 to 3 partners or maximum 4 partners in 2 years' time, that is the target. That is the vision.

So for Torry, for Supremo, for Stella, we'll make partners in discussion, 2 to 3, 4 partners, actually. So these days a lot of demand for herbicide is going up. Good rains, good demand for herbicides. And apart from this also, a lot of, I would say, the manpower cost is going up. So good demand for herbicides.

Fungicides are also becoming popular and the demand will be higher because of good rains, like there will be a lot of disease. So already, we see disease incidents, we see our -- incidents in various crops actually across the country. So they have also started picking up. So our target is across all crops. It depends that what type of registrations we are doing. What we are doing differently, we are becoming more aggressive on maize and sugarcane now. We were very, very aggressive on cotton, maybe which are the main crops, wheat and some other, pulses, vegetable crops. So vegetable also we are becoming aggressive as some of our products like Shinwa, like Kunoichi which has come now.

So we are trying to find the gaps in our range. We are trying to see these gaps and ultimate aim is that we should be present in all important crops. Like if I talk about Hachiman, Hachiman is very good for soybeans. So it has filled our soybean bucket. If I talk about Kunoichi, Kunoichi takes us to all the vegetables and fruits and other things, actually, flowers. If I talk about Izuki, Izuki will it take us to paddy, Torry has taken us to corn at the moment, and the future is with the sugarcane also. So likewise, as you get the products, as we bring the newer technologies, so we are going to become aggressive on one by one, different crops. Actually, wherever we see the segment.

[Unknown Analyst]

See, sir, my question was on the patent received. The 4 products which we have got patent received, the Novel, fungicides...

[Rajesh Aggarwal, executive]

I didn't get it actually. The question is on what?

[Unknown Analyst]

No, I'm saying we got patents for 20 years on 4 products, okay? One was -- one is fungicides, which is the carbamate compound. I see your pesticides...

[Rajesh Aggarwal, executive]

Yes. Yes, I'll be talking about these also. So these are the new patents which has come for the JV. So whenever you get the patent, you get it for 20 years. So the registration of the product is going to take time. From the JV and that into the -- when it is -- the first product, which we had planned is ready, ready for commercialization. But still, a lot of data generation is pending, and it will take 2 years.

So for all these products to come, which are through the JV, so I can say it takes about 3, 4 years gap after the patent. So 4 to 5 years, it will need to launch these products after the patent. So for the JV patent, the new discovery things, we are only going to come 2 to 3 years down the line, they will start coming. And majority of these products where we are getting the patent, they should come by 2030 I, believe.

[Unknown Analyst]

Sir, even a product where we got the approval in 2018, okay? 2 products, one in the fungicides and the pesticide, there also you think it will take another 4, 5 years?

[Rajesh Aggarwal, executive]

I'm talking about new discoveries because I'm not sure because your voice is not very clear. If we are talking about the new discoveries, new discoveries...

[Unknown Analyst]

Yes. Yes. The new discoveries...

[Rajesh Aggarwal, executive]

The new discovery, we cannot launch without data generation. It takes that type of time. Companies worldwide claim that 1 new discovery takes more than INR 1,000 crores to launch and this type of time. We have set up this JV in 2013, and we are setting in 2023, already 10 years are gone. I'll be launching my first product by 2025 or '26 and majority of the product, 2, 3 products which are there in line, they will come by 2030.

Everything is going to come -- the new discovery, India has not discovered anything so far. London, Britain has not discovered anything so far. There are many developed countries who have not discovered anything. So this is a big achievement, INR 1,000 crores, I can sell a product of INR 1,000 crores. I could take a call, I need to launch it by myself or I can sell it. I have a Japanese partnership, I cannot, otherwise, that technology can be sold. It's a big thing actually. It takes time.

[Unknown Analyst]

And one more thing, on the exports side. This year, we have said that the exports are tough for you. So is there any particular geographies where we are facing challenges? Let's say, Europe or...

[Rajesh Aggarwal, executive]

Yes. The challenges are coming from worldwide, particularly if I talk about Africa, Middle East, also from South America. We are facing challenges of collections. So the collections are not coming. They are getting delayed, even the LC are not honored the way they should be. The ECGC is cutting down the limit. We are the -- bankers are reducing the number of banks -- like the banks, the bankers here they give the clearance that, yes, you can take LC from this bank. The bank define, they approve the banker. But ultimately, they're reducing the number of banks. So there are a lot of challenges which are coming actually because of which we are trying to go relatively slower.

[Unknown Analyst]

Okay. Sir, if the challenges are not on the product side and the raw material side that much, but the challenges are on the financing side of the supply chain.

[Rajesh Aggarwal, executive]

Yes, the financing side, and the second thing is the price. The prices have gone up and their currency has depreciated. So it has depreciated so much that we are finding it difficult to sell. Sometimes they say, okay, reduce the price. But we don't want to -- we cannot because the cost has gone up for us also. So Indian currency has depreciated little, but other currencies have depreciated more actually. So all the developing countries, their currency has developed much more than us. So that is also coming as a challenge.

[Unknown Analyst]

And one last thing. See, we have tried to focus on 3 products and grow those products in the last few years, okay? Can you give an average size of an SKU since what was 5 years back and what is it now? And how much benefit does it help in the economies of scale when a product is, let's say, a INR 50 crores versus INR 5 crores or INR 10 crores?

[Rajesh Aggarwal, executive]

Definitely, it depends in which position the product is. If it is a new product, which is a patented product, the price keep on going up and that gives the advantage. If it is the off-patented technology, the price goes down. But again, the quantities are going up, so it is giving the advantage. So most of the off-patent -- if I talk about the off-patent technologies, yes, the market size goes up, but the profitability per liter goes down. But absolute number goes up, actually.

So that's the situation for most of these products. But if they are patented products, then yes, there is an advantage. But at the moment, most of the products we have are off-patented. The patented products are just limited to some of our mixtures, which were launched 3 or 4 years back. So in those case of mixtures, again, the quantities are improving. So some of these are in the Focused Maharatna range, which are contributing the maximum in terms of top line as well as bottom line.

And there are other products which will be diminishing slowly. So it's a mix of things, actually, I cannot say that 5 years back product is being very good now. So we have set up a range where -- which are the focus products. So they still are into Maharatna's. That means they are contributing. So if something is not contributing, you have removed out of Maharatna.

[Unknown Analyst]

I was just trying to understand every size of a molecule, okay? What was 5 years back and what is currently because of so much effort on consolidation has gone. So that was the question...

[Rajesh Aggarwal, executive]

We do 135 brands. When you see a molecule, I don't understand. You want to talk about the technical or a formulation?

[Unknown Analyst]

The formulation. The brand, what we are doing what was the average revenue per brand, what you were doing. And how is it changed now in last 5 years?

[Rajesh Aggarwal, executive]

Like if you look about the average revenue from the brand, it has brought 11 plus 20 [ years ] , I'm saying, about there are now 35 products in the Focused Maharatna range. And these 35 products are going to contribute 65% of my total business of brand. So yes, the sizes on an average are becoming big actually. So there were certain focus in the past, which were INR 100 crores per brand, but now they are not into a distance. But we'll be creating certain INR 100 crores worth brands now and we have more than half a dozen products, which we'll be crossing this year. So that way, like the products are improving. The products are changing, the product mix is changing. So there are challenges because there are already 27 products which are into the list, which is proposed for winning. But I'm quite sure that the 27 will not go. There will be 5, 7 products which are going to go and 20 should exist actually.

So these 27 products almost contribute 40% of Indian market actually. So if all of these goes, yes, the news products are going to come up and they are going to take the share. But I don't think most of these go. So there will be some products which we are monitoring, which are important products in that. But the vision is that we continuously bring -- plan to bring the new chemistries, new products and establish them.

So the idea is that whatever big products we introduce, they should be in a market -- they should obtain a market size of INR 50 crores to INR 100 crores in 1 to 2 years or 3 years of time. So that is the vision. So we are trying to launch the bigger products now and work with these technologies and develop these technologies into the market.

[Unknown Analyst]

One last thing. You said, 12 your products have more -- will be more than INR 50 crores revenue in FY '23. 12 brands, that is what you said?

[Rajesh Aggarwal, executive]

I'm not getting you clearly actually. I don't know what is the problem...

[Unknown Analyst]

I am saying, you stated that the 12 products, the revenue would be more than INR 50 crores in the FY '23.

[Rajesh Aggarwal, executive]

I didn't say 12, I said half dozen. Almost 6, 7 products. 1 to 7 or 8 products, actually, I can look at the link, I can give you the exact number. But there can be about 7, 8. 12 is difficulty actually.

[Unknown Analyst]

Okay. Okay. So I got confused so that's why. And last thing, the 35 Maharatnas -- 30, 35 Maharatnas, which will contribute 65% of your revenue. Is there any of those drugs which can -- which will also -- in the list of the 27 products which can move out of -- which will not be sold? Or these...

[Rajesh Aggarwal, executive]

Like these trade products are not there, but there may be certain measures where 1 or 2 products will be -- can be from that segment. So that goes then, yes there can be chance of again a product change. But you should appreciate that we are continuously bringing the newer technologies, and we are ready for any changes which are going to come in the world actually, or in the country.

So I would say that we are also making the presentation to government of India that when the product comes, it comes time typically, and it should also -- if they plan to move it out of the country, it should also move out scientifically. So whatever there is a data gap, as an industry, we are trying to develop all the data gaps, and we have submitted those papers with the government. So I feel that they should not go. But ultimately, due to various pressures, the older technologies will move out, the newer technology will come. But through by virtue of our R&D centers and partnership, we are continuously working with the newer technologies and bringing the new products. So most of the new products which we are bringing are from the generation range.

[Operator]

[Operator Instructions] We have our next question from the line of [ S.A. Narayan ] from [ Capricorn Research ].

[Unknown Analyst]

Rajesh, I must compliment you for the progress you and your team have made over the years. I have now 2 questions. From your anecdotal experience, would you agree that any interest subvention for -- of agriculture loans would be favorable for farmer-friendly companies such as insecticides?

[Rajesh Aggarwal, executive]

Okay. Yes, definitely. Whatever advantage comes to the farmer, definitely, it is going to like, help him in increasing the input cost into the agriculture. So anything which comes, it is always helpful, actually.

[Unknown Analyst]

All right. Good. I'm aware you have an intending Board meet to consider a bonus issue of shares. Is face value split also on the table to make the script affordable for small investors? Can it also be on the table?

[Rajesh Aggarwal, executive]

We are going ahead with one thing only. So there is no such plan of repeating the share.

[Operator]

[Operator Instructions] We have a question from [ Rishu Delo ] an individual investor.

[Unknown Attendee]

Can you please indicate the volume growth that you did in this quarter?

[Rajesh Aggarwal, executive]

Actually, volume growth is important but it is not actually important because the new products which are coming, the dosage is lower, the prices are higher. So volume, should we look at the volumes in the industry, like at the time from our inception, our market size was [ INR 500 ] crores in 2001 when we entered into agrochemical and Insecticide (India). And today, it has increased to about $3 billion actually. So say, about INR 25,000 crores, INR 30,000 crores.

So the volumes are continuously diminishing. The type of formulations which are going into the market are continuously changing naturally. So in totality, the volume does not matter. We manufacture 3 type of major formulations. One is granule formulations, another is powders or WGs and third one is liquid actually. So we can -- if you want the numbers, category-wise, we can share those numbers because generally liquid and powders or WGs are expensive products and granules are cheaper formulations, actually. So that can be given.

I don't have the number handy because we don't chase the volumes actually because we have to chase the volume product-wise, not in totality because if I dispatch 100 loads from 1 plant and 20 loads from 1 plant, the price of 20 loads will be -- like it can be higher than the 100 truckloads actually from another plant. So we don't chase the total number of trucks, we although that it's always healthy, but that's not my target.

[Unknown Attendee]

Got it, sir. But the thing is that I wanted to understand that the 20% growth that we have registered this quarter, so how was the -- like what are the drivers for this growth? So far, the growth was mainly driven by realization improvement or some of the components like, will be prior volume-driven growth? So that's what we wanted to understand.

[Rajesh Aggarwal, executive]

The idea is like the growth, yes, we have -- there are 2 reasons. Number one is the new generation formulations we made, particularly like as I told you, Hachiman was launched last year but this was the first full year where we could -- like we got for Hachiman. Then another project, Torry, had come in and some of our other Focused products we had targeted. So all these target products made a growth. And some of the other products, we have -- we are believed -- they had growth also on the Focused products.

[Unknown Attendee]

Okay. But sir, like our understanding purpose, so can we assume that this growth was majorly driven by the price hike that we have taken?

[Rajesh Aggarwal, executive]

Price hike is not to the extent of 20%. There has been a price hike between 5% to 10% actually in various molecules. In some of the cases, it would have plus 15%. But on an average, I would say the price hike is less than single digit. It's not the double-digit price hike, what I was selling through the market on an average.

So you can say it has grown by 19.5%. So 7%, 8%, maybe the increase in the price, but majority will be increasing revenue volume or volume -- volume rather of different products. In terms of generic products, where we have not focused, we would have lost the volume also. But wherever we are focused, we are getting that share.

[Unknown Attendee]

Okay. And sir, like given the lower revenue in the export that we have registered in Q1, how we can expect the export growth should be in Q2 or in a full year basis?

[Rajesh Aggarwal, executive]

The -- generally, the exports, they move slowly. Like the majority of sales of export in the territory, geographies we have developed, it used to happen in Q2 only. Q1 was always subtle. Because Q1 used to be my domestic market and Q2 used to be my -- so we do first half used to be my domestic market and second half used to be international market traditionally also. But now we have orders. We have planning. So we are confident that we should be able to achieve. So we have -- we were aggressive initially in our targets, and we are confident that we should be able to get it. But as we see those dents in the markets, so we've reduced our numbers by INR 50 crores, and we are talking about INR 150 crores. And it looks like the team had given the targets, and I'm quite confident they are capable of achieving this and they should achieve this.

[Operator]

[Operator Instructions] We have our next question from the line of Abhijeet Bora from Sharekhan by BNP Paribas.

[Abhijeet Bora, analyst]

I have 2 questions. Firstly, on the -- you mentioned that revenue growth will be better in Q2 as compared to Q1. So can we expect the full year growth to be in the range of 18% to 20% revenue growth?

[Rajesh Aggarwal, executive]

That is the target we have kept internally. So should be 20%. Yes. You can expect.

[Abhijeet Bora, analyst]

Okay. And secondly, as we highlighted that there has been some challenges in the export market, so you've got the guidance on that part. So if that comes back, which could be seen in FY '24 and there will be a ramp-up of new products which we are launching continuously, so again, like for FY '24, we can expect the similar 18% to 20% growth?

[Rajesh Aggarwal, executive]

Yes. Because this year, we'll be coming up with the plants, and it depends on the registrations also what we are going to bet. So I'm quite -- like, yes, we can assume that next year again should be a good growth year.

[Abhijeet Bora, analyst]

Okay. And you guided for a 100% improvement in the margin. So like what can be the -- like not peak margins, but on a sustained basis with the ramp-up of new facilities, traction exports, where we can see margins over next 2 to 3 years?

[Rajesh Aggarwal, executive]

Actually, it depends on the market situation. But we have this target in mind that we have to continuously work from improved margins. For this, we are following tail cutting policy, like wherever the products are losing their shares, we are discontinuing these products actually. And we are working on the new technologies. The idea is definitely the margin improvements. So there's a continuous goal of increasing the margins by 100 bps year-on-year. I'll not say that 100 bps will be sustainable year-on-year. There may be certain year where it may go up and there may be certain year which where we didn't challenge, it may go down. But yes, we will continue with this target. Actually, in the past also, we have delivered better results in terms of the absolute margins. So we first wish to cross that and then we wish to move forward. So as we do our backlog integration, bring the newer technologies and then do biologicals, all these things get in place, so the margin should improve actually continuously.

[Abhijeet Bora, analyst]

Okay. And can I get the full year CapEx guidance because we are nearing completion of our expansion plant.

[Rajesh Aggarwal, executive]

CapEx this year should be to the tune of -- about INR 30 crores, INR 40 crores -- about INR 40 crores, you can say.

[Abhijeet Bora, analyst]

Okay. Okay. This will be largely related to the pending CapEx we need to do at Dahej, right?

[Rajesh Aggarwal, executive]

Yes. Yes. And of course, Chopanki is in final completion. So some may go to Chopanki also.

[Operator]

[Operator Instructions] We have a question from Saurabh Kapadia from Asian Market Securities.

[Saurabh Kapadia, analyst]

Sir, my first question is on your JV products. So you mentioned about the timeline of '25 and maybe other products by FY '30. So my understanding is that then this product will be much larger and we will be one whole manufacturer in India. And for that, we will need a larger capacity. So what are our plans in terms of further capacity expansion? Or will that capacity expansion will come in the new company or subsidiary which we are setting up? And how large it will be in terms of CapEx requirement?

[Rajesh Aggarwal, executive]

Like all these products will be bigger in terms of revenue, but smaller in terms of volume. These plants will be like pharmaceutical plants, actually, smaller plants. So we are going to start making our pilot plants already that is in carbs. So small, small plants, we will be setting up now.

So all these plants will be set up in Dahej mostly. And we have started working on it actually because we need some plants of that type to do this. So everything will go from internal accrual. We -- I can just tell you initially that the expense will be to the tune of INR 25 crores, INR 30 crores per annum. At the moment, there is no bigger plant. So if we have big plants then we'll fund. Like even if it is a big plant, then it would be spend more than INR 50 crores INR 60 crores in a year. So at the moment, we have not burned out in which year we will start a bigger plan. But the smaller plant of INR 25 crores, INR 30 crore I think will continue. We are looking at the new products, which will be coming in. So we'll be setting up plants. So at the moment, the big plant is not there.

[Saurabh Kapadia, analyst]

Okay. So are we still investing money in the JV or now JV is self-funded or something?

[Rajesh Aggarwal, executive]

No. JV -- we have to give the money. The JV has the bank balance. But still, the structure of JV is such that every year, both the parent companies have to spend in JV. So we have to give our share and Japanese have to give their share. So the money, whatever balance, the corpus we get, we keep it with themselves because the depreciation, the profitability of the JV and other things are to be taken care. So all that money we save and we keep as a corpus.

[Saurabh Kapadia, analyst]

Okay. Sir, coming -- could we know Q2 in the overall market situation. Sir, if you can give us some color in terms of liquidation or the -- in quarter 2, maybe for -- in fact, you said India had also generally for the industry. And also any challenges in terms of any crop where there's no liquidation or any region where we are not seen good liquidation?

[Rajesh Aggarwal, executive]

The situation of market is good if I compare with the last year. Last year, it was a very bad situation in this period. The -- generally the month of August is almost similar to the month of July. But last year, it was 50% of July, if I look at August, actually. And September was 50% of August. That was the situation last year. This year, I believe that we will be touching July figures actually in the month of August. So if we're able to do that, then we should be able to meet the last year in 2 months itself -- last year, Q2 in 2 months itself.

So that is something we are keeping in mind. So let's see how the market goes ahead. I'm very, very positive that the market should be good this year and this rupee should be good for industry as a whole and for Insecticides (India) also by virtue of the new products which are coming in, and lot of new introductions, our Focused products. So everything will support actually. And when I say new products, these are not only the products of this year, rather last 2, 3 years, actually, whatever our launch, they are new for the market actually. They could not grow in the previous years due to COVID because the market movement was very limited. So all these progress are going to grow actually in the market.

[Saurabh Kapadia, analyst]

Okay. And sir, secondly, in fact, there was better growth in Q2 as well as some margin improvement because of the mix of demand of the products. So if I look at your last margins was of 14.5% in Q2. And if I look at the last 4, 5 years, you did 15% kind of a best margin quarter 2. So should we assume that we should be doing interest margin due to given the mix...

[Rajesh Aggarwal, executive]

Already, I have given a guidance of 100 basis point increase actually in the margin in this quarter. So I'll keep that guideline. Yes, there can be better improvement. Very tough possibility. So let's keep the fingers crossed to the season, how the monsoons are going to behave. So far, there are only flash floods. There is no flooding in the country. But now there are more floods actually or more difficult situation, then the situation might differ. Otherwise, yes. The season should be very good. The situation should be very good, and we should be able to cross our targets.

[Saurabh Kapadia, analyst]

Sir, the last thing, if I look at your product pressure impact, then the products which were launched in FY '21 have not seen no good set of -- so is this -- no -- you have launched better production...

[Rajesh Aggarwal, executive]

No. No, the season has just started. Because it was a herbicide market, in the beginning its herbicides, then the insecticide and the fungicide comes. So this index will change in totality in Q2. So after the end of Q2, yes, the first half ends, we can compare. The comparison is too early if we start comparing in Q1 actually.

[Operator]

As there are no further questions from the participants. I now hand the conference over to the management team for closing comments. Over to you, sir.

[Rajesh Aggarwal, executive]

So I thank all the attendees again with the bottom of my heart for attending this meeting and bearing with us for almost an hour. So thank you very much for the interest you take in the IIL products. Definitely, we are going to come up with newer technologies and we are working a lot on technology, on the R&D front. And of course, the GLP certification is going to add as a big feather on our cap. We are working with drones. We are working in terms of CRAMS, and we are trying to do backward integration in our farm so that we can do some import substitution, and we specialize in certain technical so that we can take them to developed market with great confidence.

So overall, I can say that with our vision of manufacturing, research, innovation and also the field development program, I see a good growth for the company. And I thank everybody who are instrumental in bringing IIL here and who are taking interest us. And also I kindly -- captain of our team, particularly Vinayak and Kunal for helping us in this session and all this. And good wishes to everyone. Stay safe, stay healthy. Thank you once again. Thanks.

[Operator]

Thank you. On behalf of Asian Market Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.