Page 1 of 5 Basant gro-tech India Ltd Sector Industry Basic Materials gricultural Inputs Company Profile Incorporated as M/s Shisherkumar Basantkumar Fertilizers Private Limited on 16th October, 1990 and subsequently converted into public limited company and changed its name to Basant gro Tech (India) Limited on 5th January, 1994. Presently, the company has a multi-product portfolio which includes various grades of fertilizers, seeds and agriculture inputs. The company manufactures single super phosphate (SSP) fertilizers in India. The company is also engaged in the manufacturing of nitrogen, phosphorus and potash (NPK) mixture granulated fertilizers and development and marketing of hybrid seeds. The company has manufacturing and processing plants in kola, Neemuch, Hospet, Sangli and Nagpur in India. It also has a research and development centre at Kaulkhed. It is one of the largest producers of open pollinated and hybrid variety of seeds in and around the Vidarbha region of Maharashtra. Mr. S.C. Bhartia is the Chairman and Managing Director of the company. He has vast experience in the marketing of seeds, fertilizers and other agro products that the company produces. Business Overview The company operates in three segments: Fertilisers, Seeds and Others. The fertilizer division includes NPK fertilizers and SSP fertilizers. NPK fertilizer has a slow releasing nature & remains in the field for a long time. It is tailor made as per soil and is crop specific. SSP is used in the basal dose for crops such as Cotton, Oil Seed, Sugarcane, Wheat etc. SSP is a multi-nutrient carrier fertilizer. Other than Phosphate it carries Sulphur, Calcium and number of micronutrients. The Seeds division is involved in research, development, bio-technology, processing and marketing of hybrid seeds & BT seeds of field and vegetable crops. The company offers it s fertilizers and seeds under the brand name Krishi Sanjivani. In FY 2015, Fertilizers contributed about 61% of revenues, with Seeds and others contributing 38% and 0.6% respectively. In terms of operating income, Seeds contributed about 81%, Fertilizers about 11% and others 7%. Stock Price Price in Rs. Last Close Price 6.83 (04/02/2016) 52 Wk High/Low 9.80/5.81 Market Cap (Cr.) 64.62 (29/01/2016) vg. Volume 74263.92 (1 Mo) Financials (Rescaled to 100 for ease of comparison) Revenue 168.71 276.45 291.02 313.57 306.06 Gross Margin % 13.48 20.52 16.52 11.97 13.82 Operating Income 7.09 11.76 13.06 13.58 10.22 Operating Margin % 4.20 4.26 4.49 4.33 3.34 Diluted EPS 0.71 0.85 1.15 1.83 1.02 Book Value Per Share 5.48 5.85 7.29 8.35 10.10 Operating Cash Flow -7.25-7.95 13.63 12.95 12.54 Capital Expenditure -10.19-17.76-17.70-22.60-7.10 Free Cash Flow -17.44-25.70-4.07-9.65 5.44 Profitability Return on ssets % 5.00 4.00 4.00 6.00 3.00 Return on Equity % 13.00 14.00 16.00 21.00 10.00 sset Turnover 1.27 1.53 1.22 1.14 1.04 Net Margin % 4.00 3.00 4.00 5.00 3.00 Financial Leverage 3.00 3.50 3.77 3.34 3.16 Financial Health except Debt/Equity (Ratio) Long Term Debt 63.82 32.83 41.79 48.43 44.16 Total Equity 49.68 60.54 70.10 85.90 94.56 Debt/Equity - - - - - Working Capital 70.65 37.55 49.65 52.20 53.73 Report as of 05-Feb-2016. Initiative of the BSE Investors Protection Fund. 2015 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
Page 2 of 5 Basant gro-tech India Ltd Sector Industry Basic Materials gricultural Inputs Income Statement Total Revenue 168.71 276.45 291.02 313.57 306.06 Cost of Revenue 145.97 219.72 242.96 276.04 263.78 Gross Profit 22.74 56.73 48.06 37.54 42.28 Operating Expense 15.82 45.63 35.93 24.49 32.28 Operating Income 7.09 11.76 13.06 13.58 10.22 Pre-tax Income 7.09 11.76 13.06 13.58 10.22 Tax Provision 1.02 4.09 2.64-2.96 0.97 Minority Interests - - - - - Balance Sheet Stock Holders Equity 49.68 60.54 70.10 85.90 94.56 Long Term Debt 63.82 32.83 41.79 48.43 44.16 Total Non-Current Liabilities 66.59 38.29 52.02 56.51 51.82 Payables 18.68 42.98 58.45 45.82 40.82 Total Liabilities 99.39 151.63 194.36 201.32 204.57 Net PPE 45.58 58.28 71.15 89.28 91.53 Goodwill and other Intangible ssets - - - - - Total Investments 0.04 - - - - Total Non-current ssets 45.62 61.27 72.47 90.21 92.65 Trading and Other Receivables 45.14 72.69 105.43 99.46 96.95 Inventory 54.71 76.44 84.90 95.58 103.15 Cash and Cash Equivalents 1.58 1.76 1.66 1.96 1.83 Total ssets 149.07 212.17 264.46 287.22 299.13 Cash Flows Depreciation and mortization 2.95 4.39 4.82 4.21 4.64 Change in Working Capital -21.42-33.06-12.62-12.18-13.68 Operating Cash Flow -7.25-7.95 13.63 12.95 12.54 Capital Expenditure -10.19-17.76-17.70-22.60-7.10 Investing Cash Flow -10.13-17.16-17.69-22.45-7.04 Net Common Stock Issuance - - - - - Net Issuance Payments of Debt 21.74 30.05 14.83 20.03 8.23 Cash Dividends Paid -0.50-0.59-0.73-0.85-0.74 Financing Cash Flow 16.37 25.29 3.97 9.81-5.63 Changes in Cash -1.02 0.18-0.09 0.30-0.13 Report as of 05-Feb-2016. Initiative of the BSE Investors Protection Fund. 2015 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
Page 3 of 5 Basant gro-tech India Ltd Sector Industry Basic Materials gricultural Inputs Financial Performance Basant gro-tech s total revenues decreased by 2.4% to INR 306.1 crores in FY 2015 from INR 313.6 crores a year ago. The company achieved a lower turnover in the fertilizer segment versus FY 2014 whereas revenues from the seeds segment grew by 6.2%. The company registered an operating income of INR 10.2 crores in FY 2015 compared to INR 13.6 crores the previous year, a decrease of 24.7%, while its net profit stood at INR 9.2 crore in FY 2015 from INR 16.5 crores in FY 2014, registering a growth of -44%, largely as a result of lower profitability in the fertiliser segment, higher interest cost and salaries & wages. Revenue Growth Key Risks The company s fortunes are largely linked to the agriculture sector in India. The performance of the agricultural sector is dependent on the vagaries of weather conditions and government policies. Hence, risks include adverse weather conditions and change in government policies related to agri subsidies. Further with regard to phosphates, majority of the requirement of raw materials is met through imports. Hence exposing the company to fluctuations in foreign exchange rates and international prices of raw materials. Gross Margin Competitors Coromandel International Limited (COROMNDEL) and Rashtriya Chemicals & Fertilizers (RCF) are two of the company s key competitors. Coromandel is the flagship company of the Murugappa Group and is a subsidiary of E.I.D. Parry (India) Limited (EIDP). The Company is engaged in the business of farm inputs comprising of Fertilisers, Crop protection, Speciality Nutrients and Organic compost. The Company also operates a network of around 800 rural retail outlets under its retail business across ndhra Pradesh, Telangana and Karnataka. The Company has 15 manufacturing facilities located across the country. The Company s products are marketed all over the country through an extensive network of dealers and its own retail centers. The crop protection products are exported to various countries. It has a fertiliser production capacity of 47 lac MT and is a market leader in the complex fertiliser segment with a 26% market share. In FY 2015, revenue increased by 20.1% to INR 11,341 crores versus a year ago. RCF is a Government of India undertaking. It manufactures fertilisers and industrial chemicals. In FY 2015 the company produced 32.59 lac MT of fertilisers. Its revenue grew by 17% to INR 7713 crores from FY 2014. Operating Margin Report as of 05-Feb-2016. Initiative of the BSE Investors Protection Fund. 2015 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
Page 4 of 5 Basant gro-tech India Ltd Sector Industry Basic Materials gricultural Inputs Industry Overview Urea is the key fertiliser consumed accounting for almost 55-60% of all fertiliser consumed in India. The fertiliser industry has been heavily regulated for decades by the Government of India. s a major part of the cost is recovered by way of subsidy from the Government, timely receipt of subsidy remains critical for the companies for managing their working capital. There has been inadequate subsidy budgeting leading to delay in the subsidy payments. This leads to cash flow mismatches for the players, leading to an increase in the working capital borrowings & interest charges thereby a reduction in profitability to that extent. Overall, Indian fertiliser consumption grew by 6% from 45 MMT in FY07 to 60 MMT in FY12, following which it fell sharply by 11% to 53 MMT in FY13 due to high channel inventory and weak monsoon. The Indian seeds industry can broadly be classified into three segments (i) Self-pollinating certified seeds, (ii) Hybrid seeds and (iii) Genetically Modified seeds. lthough the Indian seed market is one of the largest, it is almost exclusively supplied by locally produced seeds. In recent years, the seed market, especially the hybrid seed market has grown at CGR of ~18-20% with increased seed replacement rate. Price/Earnings Trailing Returns Quarterly Results except EPS (Rs.) Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Revenue 74.07 69.76 84.83 90.61 69.58 Expenditure -56.78-64.51-76.46-83.22-65.08 Interest -2.74-3.03-4.33-3.12-3.03 PBDT 14.55 2.22 4.04 4.27 1.47 Depreciation -1.39-0.91-1.07-1.19-1.22 PBT 13.16 1.31 2.98 3.08 0.25 Tax -0.10-0.10-0.42-0.35-0.05 Net Profit 2.92 1.35 2.25 2.77 0.24 Equity 9.06 9.06 9.06 9.06 9.06 EPS - 0.02 0.03 - - Return on Invested Capital (ROIC) *Standalone figures Report as of 05-Feb-2016. Initiative of the BSE Investors Protection Fund. 2015 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
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