Insecticides (India) Ltd
NSE:INSECTICID
US |
Fubotv Inc
NYSE:FUBO
|
Media
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
US |
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
|
CN |
NIO Inc
NYSE:NIO
|
Automobiles
|
|
US |
Fluor Corp
NYSE:FLR
|
Construction
|
|
US |
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
|
US |
TopBuild Corp
NYSE:BLD
|
Consumer products
|
|
US |
Abbott Laboratories
NYSE:ABT
|
Health Care
|
|
US |
Chevron Corp
NYSE:CVX
|
Energy
|
|
US |
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
|
US |
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
|
US |
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
|
US |
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
|
US |
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
469.6
1 011.25
|
Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
Fubotv Inc
NYSE:FUBO
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
C
|
C3.ai Inc
NYSE:AI
|
US |
Uber Technologies Inc
NYSE:UBER
|
US | |
NIO Inc
NYSE:NIO
|
CN | |
Fluor Corp
NYSE:FLR
|
US | |
Jacobs Engineering Group Inc
NYSE:J
|
US | |
TopBuild Corp
NYSE:BLD
|
US | |
Abbott Laboratories
NYSE:ABT
|
US | |
Chevron Corp
NYSE:CVX
|
US | |
Occidental Petroleum Corp
NYSE:OXY
|
US | |
Matrix Service Co
NASDAQ:MTRX
|
US | |
Automatic Data Processing Inc
NASDAQ:ADP
|
US | |
Qualcomm Inc
NASDAQ:QCOM
|
US | |
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Earnings Call Analysis
Summary
Q1-2025
In Q1 FY '25, the company's revenue rose to INR 657 crores from INR 640 crores, marking a steady growth. EBITDA saw a notable increase to INR 72 crores from INR 46 crores, while PAT improved significantly, reaching INR 49 crores from INR 29 crores. This robust performance was driven by a 15% volume growth and a 10.8% rise in profit margins, attributed to a higher contribution from premium products. The company remains optimistic, projecting a double-digit growth in EBITDA margins for the year and a strong market demand across all product segments .
ladies and gentlemen, good day, and welcome to the Insecticides (India) Limited Q1 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Bhavya Shah. Thank you, and over to you.
Thank you. Good evening, everybody, and welcome to the Q1 FY '25 Earnings Conference Call of Insecticides (India) Limited. Today on this call, we have with us Mr. Rajesh Aggarwal, Managing Director; and Mr. Sandeep Aggarwal, Chief Financial Officer. Before we proceed with this call, I would like to give a small disclaimer that this conference call may contain certain forward-looking statements, which are based on beliefs, opinion and expectation of a company as of date. Now I would like to hand over the call to Mr. Rajesh Aggarwal for his opening year. Over to you, sir. .
Thank you, Bhavya. Thank you, ladies and gentlemen, and a very good evening. We extend a warm welcome from Insecticides (India) for the Q1 FY '25 Results Con Call. We appreciate your time and interest in our company's performance. I hope that everyone had an opportunity to go through the financial results, which have been uploaded on the stock exchange. We are delighted to present the Q1 results, which underscore the strength of our operational performance and successful execution of our strategic initiatives. The numbers we share with you today are testimonial to the resilience of our business model and effectiveness of our growth strategy.
I would like to turn to the macro environment. The industry outlook today is very, very optimistic. The rains, which were a little low during the month of July are turning good in the month of August. The crop situation broadly is very good across the country, and there is a very good demand across all segments, namely herbicides, insecticides and fungicides. If you look at the demand/supply patterns, I can say that the people were not trusting that this will be such a good season. So the preparedness of the industry is a little weak.
So there is a lot of demand. And as we look at the international scenario, again, the prices have already touched the bottom, and the markets have stabilized. Today [indiscernible] demand/supply gaps are already visible, so which has led to a slight increase in the prices, again, which means that today market has already bottomed out. It is stabilized. Certain products are increasing with a small marginal level, which means that future outlook is very, very optimistic.
The general scenario again looks cautiously interesting. Why say I cautiously because if you look at the entire country, the dams across country are full. Everywhere, there is rainfall. Certain areas were looking apparently a little dryer, but again, they are receiving good rains. The optimism in the industry is very, very high. And the real sales at the ground level have started. It started with the herbicides. Now insecticides and fungicides are also expected to move and a full -- some of the insecticides sales is already coming to the full swing [indiscernible] heavy demand.
Coming down to IIL performance, I would like to talk macro of the strategy, the details will be given by the CFO. So we were very, very clear in our strategy that we have to focus around premiumization of our business. We had very clearly divided our business into Focused Maharatna and Maharatna, which are the premium product for us. We are very, very clear that these are the products which contribute minimum 35% to the bottom line. And of course, Focused Maharatnas are the products which are very established, large products in our portfolio. Sometimes I call them engines for growth because as the engine drives the train, they are like the engines, they are the products around which we advertise. They are the products which we promote. They are the products which we educate to the farmer and the network.
So they are the key products of our portfolio. I can call them super stars of today or superstars for tomorrow because generics are already under a lot of pressure, a lot of international pressure because sometimes I say, when India starts producing, world has to stop because we can make the products at such beautiful prices that it becomes very difficult for the world to compete. So India is becoming a hub for manufacturing the generics and in the old generics since it leads to price war. And sometimes for the developed world, they see that since these generics are coming at very aggressive prices from India, they are hurdle in their growth of new generation products.
So some of the old generation generics are always under the review, under pressure. Sometimes, this pressure is coming from NGOs, sometimes this pressure is coming from Europe, sometimes from other areas. But yes, the market is increasing, but the product mix is changing. The old products will go and the new products will always come in. So Insecticides (India) is fully prepared, fully aware about this scenario. Looking at that, we are working with our partners, particularly the Japanese partner, who are giving us the patented technologies.
If I talk about Nissan [indiscernible] Nissan. We are doing half a dozen products already, and this range is increasing because they are also offering newer solutions. So a lot of new solutions are coming from Nissan. In the past, we have started with single products with them. But Slowly, we made the mixtures where we could back the IPR rights. So with that, our portfolio becomes stronger and these products also can be part of our Focused Maharatna. And now the new generation products, which are coming from Nissan, for that also, we are working with the mixtures also so that we can extend their life cycle, and we will get a full period of 15, 16 years to establish these products into India and a good -- can establish them as a good premium products. Actually, this is the vision.
Along with Nissan, our R&D centers, the 4 R&D centers of the company are also working beautifully. We are making innovations out of that. When I say innovation, we are making new AIs because generally, we talk about the new launches, the new launches of the brands, which goes into the market. But these -- all these launches, they are backed by 9(3) technical registration, what we do in India and manufacture of these technicals in India for the first time or sometimes we are the [indiscernible]. But we are among the initial player who manufacture these products in the country for the first time, so we get the manufacturing advantage here. And then since we are fully integrated, I mean to say, we are making the technicals, taking these formulations to the market, establishing them as brand because that is our key focus to take these new technologies to the market, establish them between the network and the farmers, So that is giving us a big edge.
And we are very successfully able to take these products to the market. Just to testify this, I can say, they're the products which were launched after 2020, they are contributing almost 33% of our total brand business. Like if my brand business in the last fiscal was INR 1,500 crores, INR 500 crores has come out of the new products, which were launched in the last 4 years, which means that the acceptance of our new technology product is very, very high. We are very beautifully able to take these technologies to the market, establish these technologies in the market as the brand leader because we are consistently trying new innovative ways in the market to establish these products.
Talking about our activities in the market in the Q1. So I would like to share because, generally, I never share the sales activities, which we are doing in the market. But here, I would like to tell you that we have been continuously working in strengthening our sales and marketing teams. Like the total number of people in our organization has touched 1,700. So it has gone -- grown by 100 plus in Q1 itself. The touch base with the farmer is increasing. We have touched more than 400 farmers by way of one-to-one meeting, by way of group meetings, by way of large meetings, and we have conducted more than 6,500 farmer meetings in the first 3 months of this year, including the large demonstration, large meetings, small meetings. We have conducted more than 3,500 demonstrations across the country and we are conducting more than 400 field days.
I mean to say that our teams are very, very active with the farmers and also with the retailers because the number of retailer meetings, which we have handled in the first quarter itself is not less than 75, which means that we are trying to educate the farmer, trying to educate the network towards the new generation products so that we can create a euphoria for these new products, we can establish them as brands, and we are getting very good success.
Today, if I look at my portfolio, I'm very proud to tell you that we have very strongly established our portfolio of herbicides, particularly in all leading crops. We have got multiple solutions. If I talk about rice, [indiscernible] multiple solution of rice, they are the brand leaders in the market. If I talk about maize, again, I already had introduced Torry last year. This year, I launched [ Torex ] and very soon, I'm going to launch Torry Super. With these 3 products, my maize portfolio is very, very strong. Similarly, if I talk about soybean, then in the leadership of Hachiman, Hakama and some other products like Selector. So again, my portfolio is very, very strong.
Similarly, if I talk about maize, again, with -- sorry, not maize, cotton. I have launched pyrithiobac sodium. So the brand has gone to the market, very good acceptance, though we were a little late in the launch, but I believe that in the next year, I would like -- I would be able to multiply many times the sales what we have done in this season. So similarly, we are going to launch good solutions for wheat in this coming rabi season again. So I mean to say for all leading crops, including even sugarcane, pulses, we have got very strong solutions for herbicides. And similarly, if I talk about insecticides, then we have the leadership product, Shinwa, which has become very big with Nissan's product
That was the first product of Nissan, which could cross INR 100 crores net sales in the last fiscal. And this year, we are committed to more than double the sales and we are getting very good response from the market. Mission, our new generation herbicide -- insecticide, sorry, CTPR, very common product. You've heard many times from the MNCs and some large Indian companies, we had made the technical and we launched the brand Mission into the market. And today, again, I'm proud to say that it enjoys the #2 status in the market only after the parent company, which launched the product in the past. So very good acceptance among the farmers, very good acceptance of the brand. Going at a premium product. My portfolio of fungicides also very largely appreciated value market. My Mission, which have gone to the market, again, very largely accepted.
so I mean to say that we are very, very focused around our premium brands, particularly the Focused Maharatnas, and we are getting very good response from the market. and our first quarter results are the testimony that people are accepting our products, and we are increasing the sales of this premium product continuously.
Like just to give an example of last year. In 2023, our total sale of Focused Maharatnas was 51%, which came to 59% in the last year. And this year, Q1 itself, it has crossed 60% already. And major growth in terms of quantity, the growth is even much higher because prices have dropped this year. So the quantity growth, which I see is 15%, whereas the net growth in terms of the total value has come to 3% So with a 15% volume growth, 15% plus and 3% net growth, I see a good future because this Q2 looks very, very promising across India.
There is a huge demand and huge opportunity, which is evident to me. So with our strategy to build up the sales of these premium products because we believe that we will be growing our sales of Focused Maharatnas and Maharatnas, which are our premium product in a big way. When I say big way, I mean to say double-digit growth, strong double-digit growth should come out of this.
So in the generic segment, we are playing a policy of [ tail cutting ], where we are reducing certain products, and we are just supplying these products as per the market demand, but the basic focus of the company is to grow the premium segment with Focused Maharatna and Maharatna and the outlook is whatever new products we are going to launch in future also, they should satisfy our criteria of and Maharatna products at least, and they should have the capabilities, some of those which are being launched to enter into Focused Maharatna that is the vision with that we are introducing the new products.
I would here also like to talk about the inventories. The inventory levels are also coming under control. Though in the end of Q1, that has touched somewhere around INR 700 crores. But I expect the inventory levels to come down even further, 650 plus/minus should be a reasonable number at the end of all the quarters because we are changing the product mix and coming out of many generics. So we have already stopped more than 6 technicals, which were -- generic technicals, which we were making in the past where the profitability was very low and there was high risk of market fluctuations.
So that has also helped us in building up the margins with these [indiscernible] products. So the CapEx plan, INR 100 crores for the Sotanala project is there, and we have started the construction. I believe in next 1, 1.5 years, we should be able to get through this project where in Sotanala Behror, Rajasthan, we should be able to build up our flexibility not only for the formulation but also for the technicals, particularly the insecticides and fungicides technical and formulation facility will be built over here. And in Dahej, we should be able to commence the production out of the LNT plant, the new plant which we are not able to capitalize because we are waiting for certain approvals from the local government. Though we have received the approval from center, but the state approvals are still in process and there were certain queries, which were raised in the past, which we have replied and we are expecting that we should be able to get the registration soon and we should -- the plants should come under production in this month or maybe maximum by next month.
The expectation, yes, the results -- the ultimate results are going to come in the new year from this plant. But yes, the plant will come into operations and we'll start producing the new products. The vision is that we should continuously be able to launch these new products from the plant in terms of technical manufacture. And there is also a plan to do the backward integration for certain AIs. So we should be able to start this in the season itself that is the vision.
There are certain launches which have already happened in Q1. We could launch one brand called [ Torox ], which is topramezone, the herbicide for maize. Then we launched the technicals we have made are also pyrithiobac sodium, which I just announced, a cotton herbicide. We made ourselves, we made one more AI called topramezone, so these are the AIs, which we have already started. And there are further few products which are evident -- which we are launching in this Q2, particularly [ Sharp Shooter ] has gone to the market, which is a Mission insecticide. Torry Super, which will be tembo plus atrazine mixture, patented mixture, it is going to be launched into the market in the month of August itself. [ Goldsteam ], our PGR will also go to the market in the month of August. So there are these launches.
And after these launches, we are also going to start the manufacture of pyroxasulfone technical, and we are going to take our brand Million in a big way in this year, particularly the [indiscernible]. So I see a lot of good products, which are going to come during this year. And they should be able to establish as brands in the market with very high acceptance from the farmer because the interest, which the market is showing is really high. The indications which I'm receiving from the market are again, very, very high. And I see the portfolio of insecticide, fungicides all growing together along with the herbicides and particularly, this Nissan's portfolio also growing in a big way in the leadership of Shinwa and Hachiman in particular, and also Izuki and Kunoichi should also show very good performance in this year, particularly, of course, Pulsor and Hakama are the popular products of Nissan.
So all the products of Nissan also should signal a decent growth in this fiscal, that I believe. So I would here also like to touch upon the technology part because we are making -- using dashboards very frequently. We are using the CRM program because we are trying to connect the farmer. We are trying to connect the retailers. We are trying to connect the distributors. So all the apps are already made and given to the market, and we are trying to use these apps so that our touch base with the consumer goes a little high and there is two-way communication. We are also working in automation of all the processes, automation of plants, automation of working style, automation of processes in not only in plants and the IT programs, but otherwise, also, wherever we can improve our processes, so we are building up our SOPs in a fashion so that we can achieve better results, faster results and through teams and processes we are working on strengthening.
So wherever there are gaps, we are strengthening our team continuously and it is not only the team in the market or in the R&D or in the manufacturing, we have strengthened R&D sales, but also at the director level, we have tried to strengthen our Board, and we are working continuously to do these improvements. So in the end, I would say that I have very, very good expectation from the season. I see a good opportunity, a little caution.
Like in this quarter, we have grown by 10.8%, which is a good EBITDA increase for more than, I would say, 57% or more than about -- a little less than 400 basis points. So we are going to see a good growth in this year, but I'm not trying to indicate that this quarter should be full result of the full year, though, I expect that the EBITDA margins in this year should be in double digit. But I don't want to declare that, that we'll be crossing 10.8%. But I can say my expectation is, yes, good double digits.
And the expectation I see from this season is strong. I'm a little bullish, but I don't want to convey those numbers from here. So with this, I would thank you very much for your interest, and we'll open the house for questions before this I would request the CFO, to talk about the results and our current achievements. Thank you.
Thank you, sir. I will now share the highlights of our performance for Q1 FY '25. The revenue from operations stood at INR 657 crores in Q1 FY '25 as compared to INR 640 crores in Q1 FY '24. EBITDA stood at INR 72 crores in Q1 FY '25 against INR 46 crores in Q1 FY '24. PAT stood at INR 49 crores in Q1 FY '25 against INR 29 crores in Q1 '24. For the first quarter of '24. The share of insecticides were around 33%, herbicides 61%, fungicides 4% and others 2%.
Coming into the segment-wise sales in Q1 FY '25, the B2C sales is around 71%, B2B sales is around 26% and exports around 3%. In Q1 FY '25, the premium products contribution is around 60% of the total B2C sales and 40% is from generic sales. So that's all from my side. So now we open the house for question-and-answer session. Thank you.
[Operator Instructions] The first question is from the line of Pradeep Rawat from Yogya Capital.
So my first question is regarding our raw material sourcing. So how much of the raw material for formulation is sourced from our own technical facilities.
Most of our, I can say, the premium products are made from our own in-house technical. So all the new products which are coming in particular, we make the technicals by ourselves. So we will be able to give the response in writing because I don't have it handy. But here, all the new launches, most of the new launches are coming out of our -- either our own technicals or they are coming through the Japanese partner, particularly Nissan, that much I can say as of now. .
Yes. Sure. Understood. And do we make patented technicals also?
At the moment, I'm not making the patented technicals, but I'm making a lot of patented formulations. Some of the processes of technicals, we have got patents, which were done 10 years back. So almost 7, 8 years life is still pending. Mostly the -- when we talk about the patented technicals, we are doing the new product discovery in OAT Agrio, which is OIL, which is a JV of OAT Agrio and IIL. So with this, we'll make some patented technicals. But at the moment, if I talk about my current portfolio of technicals in particular then there are no patented technicals because most of them are off-patent technicals which we make. .
Yes, sure. Understood. And I missed it in the opening remarks. So our EBITDA margin -- EBITDA improved by 57%. So it is quite a significant increase. Can you highlight the reason behind that?
You missed it. So I would like to tell you that we are working around the premium products. So the premium products are called Focused Maharatnas and Maharatnas in our portfolio, these are the products which contribute 35% plus. And in the first quarter, because there were changes in the prices, when I say changes because the market has stabilized and the prices have come down, the contribution was a little higher than 35%. So it was 40% plus type of contribution, which has come from the Maharatna products or premium products in particular. So that has helped us in building our margins and the contribution of Maharatnas has been 60% plus in this quarter. .
Yes. So this was the only reason for quite significant rise in margins, right?
Yes, because the market has stabilized the inventory, whatever we have is now the market price inventory in the last fiscal -- from last 2 fiscals, the inventories were a little high price inventories and we are not able to make the profit, what is required profit, actually, because of the certain decrease in the prices. So those challenges were there. So yes, this is the main reason.
Yes. And can you also highlight the margin difference between our Maharatna products and other products.
Like the premium products contribute roughly 35% plus. And in the Q1, we have contributed 40% plus. Generally, the other ranges, they contribute in the range of about 12% to 15% of gross margin.
Gross margin, right?
Yes, I'm talking about the gross margin.
[Operator Instructions] The next question will be from the line of Aman Soni from Invest Analytics Advisory LLC.
congratulations for Good set of numbers. My question is on revenue growth guidance. With the number of the distributors going from the 6,600 to over 7,500 with the expected growth contribution from these newly added distributor. Could you please provide us the overall growth guidance and revenue in for FY '25
We are able to increase the volume by a big number. The volume growth is substantial. If I talk about this Q1 itself because the prices have gone down by about 10% to 15% product to product. So on an average, we can say that there is a fall of about 12%. So we have grown in terms of volume by 15% in this quarter, which has ultimately led to the value growth of about 3%. So that has been the scenario in the Q1. Q2, we should be able to perform better.
That is my belief, looking at the market scenario because the -- I already told that the dams are full across the country. There is availability of water. The crops mostly are sowed. There were issues, there were risks that the crop might not survive in many area. So broadly, the crop is in a safe condition and the pest infestation has already started because they are rains everywhere. So this is the time when we see [indiscernible], which brings a lot of infestations of pest and disease. So that is the current scenario of the market, which means that there should be good demand, so we are very, very optimistic about now.
Okay, sir. And in the last presentation, it was mentioned that the focused Maharatna products was 13. However, in the current presentation, the company focus has shifted to 11 products. Could you explain the reason behind the decrease in the numbers of focused products?
No, there is no decrease basically. Focused Maharatna are 11 products. In the past, it might be 12 or 11 only. I think there were 11. There is no change in that. Maharatna are the other type of products. I already explained that Focused Maharatnas are the engines. They are the already popular products in the market, and their gross contribution is more than INR 50 crores per product or they have a potential to do that. and Maharatnas are also the products which have good contribution, more than 35% plus to the bottom line.
But the top line, maybe it is [indiscernible] INR 5 crores, INR 10 crores, INR 15 crores, INR 20 crores, they are into Maharatnas. So we work on the top most for that. And of course, the Maharatnas are also focused from area to area because they may not be the all India products. There maybe popular in certain areas, certain geographies, so that's why the focus is so different. But yes, these are all premium products, and we work around the premium product. But largely, we advertise that key products. So we have established 11 Superstars, you can say. And these 11 superstars, we are advertising, we are focusing around 11 superstar. And this list of superstars will grow further. It will not come down. That much I can assure .
The next question will be from the line of Bharat Gupta from Fair Value Capital.
And it's really heartening to see our margins coming back in the double digit. Sir, a couple of questions from my side in regard to it. So if we look at the overall level of contribution coming in from the premium products, definitely, there has been an increase but it's also likely the scenario where generics contribution have also increased. So is the understanding correct in terms of the improvement in the gross margin coming in from the generics space as well.
Yes, you can say that there is some improvement from the generic space as well because in the last fiscal, when the price -- when inventory was high cost, there were certain generics, which were giving a negative contribution. So this year, I can say, there is no negative contribution from a single product. So overall, they are contributing. So maybe just 15% gross margin or a little lesser, but still they are good, not bad.
And do we expect that the margins will likely remain over this particular range in the generics space? And on the consol basis, we're likely to improve on the 11% kind of a margin going forward in the rest of the year?
Difficult to commit, 11%, for the full year. But I can say, yes, we'll remain double digit. Yes, we can be close to 11%. There is a possibility, but I'm not able to declare the exact number until we pass on one more month of good monsoons and good thing because there are floods there can be a risk. But if there is no flood and the continues like this only, then it will be a very good year for the farmer. And definitely, for the industry also, there will be a good opportunity. And if the things remain like this, then it will be a bumper year and the margins can surpass even 11% that is a possibility. .
And sir, secondly, when we look like because kharif mainly dedicated towards the Q2 side where the overall [indiscernible] consumption of insecticides tend to increasing side. So how are we looking at the current scenario in a place like rains has been good. So in a way, do you see that the momentum is likely to remain on the positive side going forward for Q2 as well?
This is a very typical year, the rainfalls in June and July were not consent. So what has happened that the season is extended, the sowing has taken place in 1, 1.5 months. Generally, the sowing takes place [indiscernible] days for 1 crop. So it is wide spread and the difference is 1 month, 2 months, 1.5 months from area to area, village to village, farmer to farmer, which means the season is prolonged. So I believe that August is going to be a peak season and September should follow suit.
So if this is the scenario, then a very good opportunity is going to come in this kharif season. And since the tanks and bunds are full, which means that there is a lot of opportunity for the rabi season also. So the team is very confident that there will be a full rabi crop also in the entire country.
All right. Sir, like on the B2B side of the business, where we have been like -- where we have faced some challenges. So can you just help us understand the key reasons for the same? And also, is there any kind of availability issues, which the market is facing, particularly because of the [indiscernible] increase?
Yes. B2B segment, actually, the prices have fallen a little more than the [indiscernible] because the immediate impact has to go to the market. So B2B team is facing a challenge. The challenge is the achieving -- they are achieving the volumes but they are not achieving the value. B2C team is easily achieving the value as well as the volumes, but that is a challenge for B2B and also for the international business. .
Like if I talk about the international business, the number of containers handled during this quarter is almost equivalent or a little more than the last year, but the value is a little lesser. Similarly, in case of B2B, they are not achieved to the similar value like last year, they are a little lesser, though they are doing the sales. So yes, there is a challenge. But yes, you are correct that already the shortages have started. This is a seller's market. The prices have started going up, and there is demand.
And sir, on the export side also, the scenario where the destocking was continuing to take place because of China dumping. So have you seen any kind of a revival taking place?
There is a revival in international markets also, but there are a lot of issues which are there in international market and continuously one of the second issue we are facing. These war situations are worrying the market, the evolution of the country is another worry, devaluation of currencies is another worry then there are issues of the market demand, market pricing, the credibility of the company, the downgrade by ECDC, the reduction of limits by ECDC. So export market is coming with a lot of challenges. .
But still, I believe that the destocking has already -- like this is already like happening. So some demand we can see has started coming from Europe side also, American side also, other places also demand is there. But yes, the growth is a little slow due to a number of challenges which are there in the international market. .
Last question from my side, sir, if I'm allowed. So what will be the share of the new products in our overall revenue composition? And what's the product pipeline, which we are planning to launch over the kharif and the rabi season?
In the Q1, we have launched one product. In Q2, there are 3, 4 launches, which are evident. In the rabi season also, like this year, again, we will be launching more than half-a-dozen products. In last 2 years also, we have done the same. But I told that in -- there was a contribution of more than INR 500 crores in B2C segment from the products, which were launched in the last 4 years. So if I take my net sales of B2C of INR 1,500 crores and 33% has come from the new products. So we provide a freshness index. If we look at the freshness index, well, most of my sales is coming from the new products because from generics, we are shifting towards the new products.
Our Focused Maharatnas and Maharatnas, particularly all the products or most of the products are just new products because they are the contribution -- contributors. Generics will always have a small margin because they have their established market and the consumer also wants at certain price, at a fixed price. So they are not a part of our Focused Maharatna and Maharatna range and we've already touched Maharatnas to 60% in Q1. And I believe in Q2, our percentage of Maharatnas is going to [ cost ] 60%.
Great, sir. And in terms of the overall launches, I think [indiscernible] products we are supposed to launch over the FY '25, so how many of the products will be in the 9(3) category and 9(4) category
These days, most of our launches come in 9(3) category only. There are very few which are 9(4) launches we do. So mostly everything is coming -- or most things are coming in 9(3) category. So I have a lot of lined up. There are certain mixtures, which will be patented mixtures, which are going to be launched in this year, at least 3 more. There will be a Nissan product, which we expect to come into the rabi season again. So there are a lot of launches pipeline and mostly will be the Maharatna and focused Maharatna type of products.
The next question will be from the line of Bhavya Gandhi from Dalal & Broacha Stock Broking.
Congratulations, management on the good set of numbers. So just wanted to understand, can you provide guidance on volume growth for FY '25?
Like we said that 15% to 20% volume growth is possible in the system. So maybe a little higher because I'm also expecting the value growth of roughly near to 10%. So that will be a possibility. But our focus is around Focused Maharatna or the Maharatna products, which are the premium segment, where we wish to grow by almost 15% to 20%. So that is our vision. We are working for that. But looking at the market scenario and the demand pattern, yes, there can be a little more growth in terms of volume -- yes, value?
So is this value growth driven by premiumization of the product? I mean, are there better margin, profit margin products?
It's both actually. The premium products, yes, because we are focusing around these products and we are trying to create the demand for these products. So yes, we are very successfully able to take these products to the market. And the volumes are also increasing because generally, it's a credit market, and it is credit limit based market, which we run because there are credit limits of the distributors, of the retailers, everything is there in the system. So still the prices have dropped. So we are able to give more supplies in the same credit limit to the market. So the volumes are also going up. .
Right. And sir, last thing with respect to Dahej expansion. So I mean, when can we expect the completion and what sort of impact will it have on our production and overall growth?
In this year, the impact will not be visible too much because we already are coming towards Diwali and generally Diwali, we take a shutdown of 1, 1.5 months. what we are expecting that we should be able to get the registration, either -- the clearance in August or early September. So the plant will come into production. So 1, 1.5 months won't be much contribution. So it will only start contribution from December when the original production will start throughout the Dahej facility because Dahej needs generally a larger shutdown of 1, 1.5 months due to Diwali period, actually, that's the trend because it's a large plant and maintenance takes a little more time.
So yes, we have double [indiscernible], so I'll not say that this will double the turnover because there are certain chemicals for which we are doing the backward integration, some raw materials will be made, some new AIs will also be made. So it will be contributing. So I would say that, yes, this will contribute in our growth, of course, in terms of new technicals and strengthening some of our technicals of which we are already manifesting in terms of the intermediates. So it should be very helpful.
And sir, 1 more last thing if I can see. Are we adding more MNCs to co-market or in-licensing -- for in-licensing their products in India, I mean, beyond Nissan and the existing ones that we have?
We don't have the target to market the products from the MNCS because there the margins are very poor. Rather, we are focusing the other way around that how we can supply our products through these MNCs, the international market as well as the Indian market, that is the focus. But yes, we are working with some more Japanese companies, and we are trying to have our tie-ups if they can offer the product to us. So we are working on that. At the moment, we have just 3 international partners, which I can talk about, particularly Nissan is #1 followed by [indiscernible] so OAT Agrio. We are having a JV, and we are also launching certain products with them.
Along with that, we have also signed 1 agreement with a Taiwan company, which is giving one product, so it is in pipeline. And then we have a company called [indiscernible] from U.S.A so 4. So at the moment, I have 4, but yes, there is a possibility that we are able to sign some more.
The next question will be from the line of Rohan from Novama.
Congratulations on such a strong set of numbers. Sir, my question is first on this commissioning of the new facility you mentioned will be probably in the second half of this year. Just wanted to get some clarity that what are the products you will be manufacturing on this site, whether formulations, technicals? Will it be the similar product basket, which we're already manufacturing in Dahej or this is going to be differentiated products what you are having right now.
Your voice is [indiscernible], Rohan. But I'm able to understand the most part of it, the content what you are saying. So I would like to inform that the expansion, which we are waiting is only for the technicals, Now, we are going to expand our formulation facility also in the Dahej because like this year, the volume growth has been phenomenon. And now since we will be crossing our volume levels to a certain extent, I'll have to grow my formulation activities for which I may not need our expansion from the government because we already have got the permission, so it won't be difficult for me.
We have established 1 plant in Dahej with an investment of INR 100 crores plus over INR 105 crores we have already spent. We call it LNT plant. In this plant, we have roughly erected about 100 reactors, which has doubled the number of reactors what I have in Dahej unit because in the 2 previous buildings, the total number of reactors was 100 and roughly 100 reactors are added in this building, making a total at 200. So this broadly means that we are going to double our technical synthesis capability. But here, we are waiting for the final approval from the state government because my plant is ready and ready for functioning. But the approval is not coming.
So I'm not able to start the production. So this approval is expected within a month's time. So once I have this approval because in the last time also, my plant was almost ready and the center approval has come, but the state approval is taking a little more time actually. So we are pushing for that. And we expect that once that comes, we'll start -- come into production. What it will facilitate? It will increase our capability to make certain intermediates because 2 of our technical, we are going to backward integrate further, and we are going to make the intermediates, which will help us in making our products cheaper and which will help us in stabilizing the manufacturing of certain -- these 2 products, in particular, which we'll declare later once we come into production.
Along with this, that will also help us to make 3 or 4 new AIs on this front and would also help us in increasing the capacity of certain AIs. So overall, yes, this will contribute. Number exactly, we have not estimated for this year because we have lost major part of our season. But yes, this will help us in growing in future also. It will have a large capability to help us in growth. And along with this, there is one specialized product also, which is made for exports. So that is also going to come from this plant. So the expectation is reasonably decent, but we'll account for it in the next fiscal announcement, not in this year.
Sir, the second question is on your this B2B business. Has it, I mean, improved in terms of margins in this year because last year, we understand because of the high cost inventory liquidation, you had to suffer some losses. So have it started improving? And is the margin expansion in the current quarter is also because of that as well?
B2B business have become more remunerative, yes, true. Has it increased? No, it has not. Because in terms of top line, it is not able to take touch the last year's number in the last quarter. And in this quarter also, I don't believe that my B2B business will touch last year's numbers. Last year, numbers were very high. Why? Because we have introduced certain new products where the value was high, there was a euphoria in the market, and people bought these products continuously in Q1 and Q2. This year, the prices have dropped, though the similar quantities are going to the market, but still the value is not matching.
So that is a challenge. Rather, there is a lot of demand for products. So we have stocked out many technicals, so we are producing and we are selling these technicals into the B2B segment. continuously, the inventories -- high inventories are not there for technical at all. So yes, the profit margins have gone up, but there will be a certain hit in the top line in Q1 and Q2. We may be able to build up our top line in Q3 and Q4 to equal the last year numbers. So yes, it will be more profitable, but there won't be any increase in this fiscal in B2B business.
Sir, you mentioned that definitely, some products are not available from China. And I think you are also in the similar manufacturing. Probably last year, some of these product manufacturing was not profitable enough so you were not producing. So my question was that, that we are seeing the shortage of the product from China, the cost has gone up. So are we ready to create the benefit of this China situation and that's where I was just thinking that in second half, can we see the significant ramp-up in the our B2B business along with margin?
It's a very temporary situation actually. So we cannot continuously keep on shopping the product range. We have already strategized that we will do the value-added products. And since we already have got the registration and a lot of registrations are in pipeline. So we have already what we have stocked we have stocked it. So the -- from the generic competition I have already come out, [indiscernible]. And now I'm going to launch the new AI out of which, I think 4, 5 new AIs we have already started manufacturing and there will be 3, 4 new additions, which are going to happen into this year, which means I have stopped 6. I'm going to add 7, 8. So it's a decent number.
So I don't want to jump into the fight of quantity. Rather, I want a quality business. So in future also, our strategy is that we are going to make certain generics where there is value addition where we don't find the value addition, we are not going to make those technicals at all. So we continuously shift our focus towards the high value-added products, and we'll do the premium business. In brands, I might continue with some of the generic brands because I hae to supply, I have to give it to the market and my products may be popular, they will be commanding the premium, but there is no fun of making the generic technicals. So I think we have come out of that situation. And since our R&D centers are working beautifully. Today, we have more than 100 pianists in our R&D center, and we are able to develop technologies very fast pace every year, they are developing more and more technologies. And every year, we are able to commercialize these AIs.
So I think I'm able to build this capability after the effort of 20 years. I started my first R&D in 2004. And now in 2024, I'm able to say this, but yes, my R&D centers are contributed are good really. So I don't want to go to the generic products again in terms of technical manufacture. But yes, wherever I'll find the value addition we'll take that opportunity because we already have the plants, but we have changed our focus actually. And this focus is for the good actually because we were a company which was working on the lowest margins in the industry. I want to change that outlook and I want to work with the premium products.
Sir, Last year, our B2B business was somewhere close to INR 500 crores. So definitely this year, you are guiding for slightly lower than that. But my question is that after the commissioning of this new plant, I mean INR 150 crores kind of CapEx, which you are having and waiting for the government's approval. So with this CapEx commissioning on totality, even if I just exclude your backward integration, the products which are going to use for your own factory purpose except that what is the revenue potential, including this CapEx on your Dahej facility in the B2B business?
Like you have asked a question, particularly for B2B. So in the B2B, I don't see much increase in this fiscal reason why because already the B2B total value is suffering.
N, sir, I was asking for revenue potential, what is the revenue potential?
There is a revenue potential of INR 250 crores plus from this plant in the first year itself, but this first year won't be this year, it will be next year because we -- again, it will depend on, if we are going to make a lot of intermediates out of it and we are going to make our things cheaper, then it may be a little lesser. But yes, it has a potential of INR 250 crores to INR 300 crores revenue from this plant.
The next question will be from the line of Darshal Jhaveri from Crown Capital.
A lot of my questions have already been answered. So just like to like just see that in terms of our pricing growth because you're doing into better product mix right now. So overall, if you are seeing 15% volume growth and 10% pricing growth. So could we see our revenue growth of 20%, 25% ?
No. The volume growth is 15%. Price growth is -- the value growth is not bad. Value growth in the Q1 has come to 3%. So this year, if we talk about revenue, revenue growth will be somewhere near to double digit. It won't be much higher than that actually. But yes, profitability growth will be good. So the profitability growth from last year, 7% minus will come to 10% plus. That much I can assure you. So there will be improvement of more than 300 basis points in the total EBITDA margins. And in future also, it will continue to grow because the type of portfolio which we are building, it is evident that it should grow by 100 basis points, at least per annum. And we are committed to increase the sales of our Focused Maharatna and Maharatna, which are the premium products. We wish to take it to 75% in the next 3 to 4 years of time, which means that there should be a continuous improvement in our profitability.
Okay, fair enough. And so sir, this clarification that you are saying that next year, the Dahej plant comes in, it has a potential of maybe INR 200 crores, INR 250 crores from the first year itself. But in case if we do some internal consumption, then our margins will become maybe better and revenue might not grow, Is that what I heard correctly?
Yes, that's correct, actually. So the production may be even INR 300 crores. But yes, that INR 300 crores will not go to the market as the technical itself. So the contribution may not be 300 , it may be 200, 250, whatever. So whatever goes to the internal consumption, goes to the internal consumption, yes, that's true. .
Okay. Okay. And sir, last question from my end, sir. In terms of seasonality that we see maybe in our business. So Q1, Q2 will be the highest, right? And Q3, Q4 will be the lowest, right? How would the seasonality be.
Yes, it's like that only. Generally, I'd say 30, 30, 20, 20. So that is the product -- the quarter-wise mix. The first 2 quarters are 30, 30 and the next 2 quarters are 20, 20, plus minus 3%, 4% here and there. So that happens. So that is the cyclic nature of our business. There are certain companies which push a lot of material in Q4. But as a strategy, we never do that because I need my money back in Q4. So I focus around collections in the Q4. And I'll start building up my sales from Q1. So you will see that my sales in Q1 are the highest vis-a-vis my competition. But in Q4, my sales generally are lower than the companies which are not even my size. So the only focus is collections and the clearance of our routes. And then only we try to give the [indiscernible] strategy.
So that's why my Q4 performance, you will always find a little lower in terms of the volume or value and Q1 performance higher than the competition.
The next question will be from the line of Meghna Agarwal from Mount Intra Finance.
Congratulations on a great set of numbers. So my question is that what is the -- besides looking in the July season, we expected we had an unexpected rains. So like how is it looking the herbicide sector?
Herbicide sector is looking very promising. Particularly, we have asked about July. So in the central part of the country since the weather was very dry, market of maize herbicide and particularly the soya beans herbicide and even cotton herbicide has stopped abruptly during that period because a lot of inter cultivation takes place. But now since the rains have started again, so we see a lot of sales [indiscernible] herbicide in particular, herbicide. There's a good demand and because it's rained all through. We see a lot of paddy sowing taking place. And along with this, since you are talking herbicides, the nonselective herbicides, in particular, also doing well, namely glufosinate, glyphosate and paraquat. So we have half a dozen brands in this segment. So all of these brands are doing good.
So we are expecting Q2 to be better for herbicides as compared to Q1.
No, I'll not say that because Q1 herbicide sales was very, very good, herbicide; in Q2, yes, if I compare my Sales of herbicides to last year quarter-on-quarter, Y-o-Y sales, yes, it will be better than last year. But this year, I think major lead will be taken by insecticide,. all 3 will be growing in this quarter. So insecticide should be major because of my large portfolio of insecticides. fungicides because we have focused fungicides with that, that will also help us in grow. So all 3 segments will grow in this quarter.
The last question today will be from the line of Ajay Kumar Suria from [indiscernible]
Congratulations on good set of numbers. Sir, my question is regarding if you can just throw some light on like what kind of margin difference is there between the premium and the and generic products which we classify if we can help on that.
And sir, also, like, if you can just throw some light on the policy, which we have internally regarding pricing of the product. So is it a market [indiscernible] or is it something like a cost plus where we decide that, okay, this product should command maybe 125, 10% kind of margin. So we add up those margins. So if you can just throw some light. So what kind of policies do we have on pricing? Because from what we understand, formulations look like more of a monopolistic market where there are around several players but the prices are still determined by the market factors. So if you can throw some light on that?
Yes. When I talk about the premium products, generally premium products are the products, which are contributing 35% to our bottom line. So the gross margin there is 35% plus in both Maharatnas and Focused Maharatnas. In Q1, that has turned out to be around 30%. If I talk about the generics, the generic, the margin profile in generics is 15%. So in Q1, it is a little lesser than 15% actually, so -- which has turned out. So this is the profile. In case of generics, yes, the prices are market-driven because you have to compete with all the people around in the market. In case of the premium products, generally, the competition is in a different fashion because market leader generally will be at our top lead position, and there will be other followers.
So how much strong you establish your brand, your pricing depends on that. So as for that situation, we are able to command the price. Yes, market [indiscernible] because if overall market is coming down, then you are pressed to lower down the prices. But if the market is reasonable, then we are able to command the premium, more premium in the market. So in the premium segment itself, like last year, we were talking about 35%. The contribution in Q1 is 40%. So there is an increase of 5%, absolute from 35% to 40% in Q1. So I'm not sure that how much it is going to continue for the entire year, but I believe that it should remain around this level in the complete year. So we are very successfully able to increase our margin in the Maharatna or premium segment from 35% to 40% gross margin. This much I can say.
That was really helpful. Sir, my next question is more on a broader idea which I want to take regarding the agrochemical industry. For the current year, the rainfall outlook and all these events look positive for our industry. If you can throw some light on what are the things that we are looking forward for coming next year or next 2, 3 years down the line where we want to see sectors and we are growing or going. So add up something on that.
Our strategy is very, very clear that we wish to launch 6, y products every year. Most of these products will be 9(3) products, either they will be coming from Nissan or they will be coming from our JV, which is the JV with OAT Agrio japan or they will be coming out of our R&D center. Whatever is the product, it will be a premium product. If it is a mixture, then it will be a more patent product mixture. If it is a product coming from either of my Japanese partner, it will be a patent protected product. So there will be a good opportunity to build up these products and all these products are going to come in the segment only. So the vision is that we are going to launch more and more premium products every year, and we are going to discontinue some of our generic products.
Already monocrotophos is going to get banned in September. So one of our products, Monocell will move out, but it is a continuous process, which is going to take place because the generics has to go out and the new mixtures, the new AIs are going to become more and more popular. So our major concentration is to build the Superstars for tomorrow. So we are building like -- we have built Shinwa as a INR 100 crore product very successfully in last fiscal. And this year, we are going to multiply it by at least 2. We have made very -- like if I look at my Focused Maharatna range then the contribution from Maharatna segment itself was roughly about INR 800 crores plus in the last fiscal, we should touch INR 1,000 crores in this fiscal itself. That is the vision. So the vision is very, very clear that we wish to grow our premium products in the big way
That was the last question for today. I would now like to hand the conference over to the management for closing comments.
So thank you very much for the interest taken in us, and thank you once again for congratulating us for the effort and encouraging us to perform better in future. So I'd like to assure everybody that we have come out with good sets of numbers, and we are working around in establishing the new generation products in the market for that. Whatever efforts are required, whatever systems are required, whatever technology is required, company is investing into that. Nissan has already joined us, and he's working very hard, he's moving around the market, he's looking at the projects. The major vision he has is how we can premiumize our business, how we can modernize our business so that we can take it to the next level. So with my son also joining me, I would assure everybody that we should be able to make a better future together.
And we should be able to take the Tractor brand to the next level from here. And I can say that all the stakeholders should get good results from the company. Thank you very much.
Thank you. On behalf of Insecticides (India) Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.