Net income declined to Rs 460.89 crore during July-September quarter of 2020-21 from Rs 504.86 crore in the year-ago quarter. 

Commenting on the performance, Rajesh Agarwal, Managing Director, said, “Second quarter of the fiscal year had a varied experience for the agriculture and agrochemicals sector, the quarter was marked with normal monsoon on an average, resulting in adequate soil moisture and improving agricultural activity on one hand, but uneven and excess rainfall in certain parts of India. This has also led to lower pest infestation and reduced frequency of sprays during the quarter.

 The Company recorded revenue from operations of Rs. 456 crores in Q2FY21, representing a decline of 9.4% on a Y-o-Y basis. The Company delivered EBITDA of Rs. 58 crores in Q2FY21, with margins of 12.7%. Net profit for the year was Rs. 41 crores, with margins of 9.0%.

Revenue growth was adversely impacted primarily due to continued focus on cash sales and collection as a part of strategy and limited interaction of regional sales team with the distributor and farmers amidst the Covid-19 crisis. We continue to focus on efficient working capital management, as a result the overall cash conversion cycle has been reduced to 115 days from 184 days in FY2020.

During the first half, we have generated robust cash from operations of Rs. 156 crores and we have also reduced out total debt by Rs. 128 crores, the company is now cash surplus with cash and cash equivalents of Rs. 80 crores, at end of Sept 2020. In light of strong cash flows, Board of Directors has recommended interim dividend of 20% on face value i.e. Rs. 2 per share.

Agarwal also added that with our focus on maintaining growth momentum by launching new innovative products and improving product mix, we have launched three new products in Q2FY21 – Master Stroke, Dominant and Mahir. The new product launches contributed Rs. 10.6 crores to net sales during the quarter, with Dominant receiving strong response from farmers. For replacement of Thimet, three product have been planned: Lethal Granules, Tadaki (in association with OAT, Japan) and Supremo (9(3) product), with later two planned to be launched in Nov 2020 and Jan 2021 respectively. Revenue from these three products combined is expected to substitute Thimet sales in the coming year.