Started in 1994, Crystal Crop Protection Limited is Ahmedabad Gujarat based crop protection manufacturing and marketing company. Company's products cater to the entire lifecycle of crops, from sowing to harvesting. Company has integrated operations, from undertaking R&D of new molecules to manufacturing and delivering the products to farmers across India through its extensive distribution network. Company was incorporated as Jai Bharat Crop Chemical Private Limited and has been involved in the crop protection business. After that they have diversified the business from manufacturing and marketing domestic agrochemicals into manufacturing and distribution of seeds, and the distribution of agri-equipment and exports of the agrochemical products. CCPL manufactures crop protection products which include insecticides, fungicides, herbicides and plant growth regulators and bio-stimulants. In 2002 company received the registration for the first off-patent product, Imidacloprid, which they followed by registering off-patent versions of other major products such as Emamectin Benzoate and Buprofezin. Company's in-house R&D centre, KRDC, located in Sonepat, Haryana, which has been recognised by the Department of Scientific and Industrial Research, Ministry of Science andTechnology, GoI. With the R&D capabilities, they have been able to create new formulations suitable for the Indian market. They have filed applications for 18 patents, out of which three have been commercialised and two have received product registration approval under the Insecticides Act and are expected be commercialised shortly. As of December 31, 2017, company had 68 domestic registrations of Technicals, 214 domestic registrations of formulations and 106 export registrations for Technicals and formulations. Company has a pan-India distribution network of approximately 7,000 independent distribution partners. The distribution network is focused on the agriculture intensive states of India such as Telangana, Andhra Pradesh, Maharashtra, Punjab, Madhya Pradesh, Karnataka, Gujarat, Haryana, Uttar Pradesh, Rajasthan and West Bengal. Company's sales and distribution management function is also strengthened by an in-house mobile application called 'MINE', which enables the sales team to manage customer accounts, take orders online and track deliveries of the products in real time. Company classifies the crop protection business into brands business, institutional business and exports business.1. Brands: Formulations are sold as branded products to brand customers. As of December 31, 2017, company had over 70 branded formulations that are sold to farmers.2. Institutional: They sell Technicals, bulk products and pack-to-pack products to the institutional customers. During the nine months ended December 31, 2017, company had more than 40 institutional products that they sold to more than 100 customers.3. Exports: They export Technicals and formulations internationally. During the nine months ended December 31, 2017, they exported the products to approximately 50 customers across 18 countries. CCPL has four operational formulations manufacturing facilities, two of which are located at Bari Brahmana, Jammu, Jammu & Kashmir, one located at Sonepat, Haryana and one located at Anand, Gujarat. Additionally, they have one operational Technicals manufacturing facility at Sonepat, Haryana and two under-construction Technicals manufacturing facilities at GIDC, Dahej, Gujarat and MIDC, Nagpur, Maharashtra. Company produces and markets seeds primarily for maize, cotton, paddy, millet and sorghum. Company has three research farms, two located at Telangana and one located in Maharashtra, where they develop new seed varieties. As of December 31, 2017, they had a portfolio of six crops and over 31 products and germ plasm lines that they are developing. Company entered into the seeds business through the acquisition of Rohini Seeds and Rohini Bioseeds and Agritech in Fiscal 2012, which merged with they Company in 2017. Company has an exclusive contract with a third party seed toll-processer, Sumathi Seeds, for seed processing and the use of their storage unit for different crops, on an exclusive basis, at their facility and warehouse located at Gauraram, Telangana. Company uses its agrochemicals distribution network to market and distribute the seeds products. Company currently distributes knapsack crop sprayers which they procure from manufacturers from China. As of December 31, 2017, company had 1,084 employees. and 1,132 contractual laborers working at the plants, offices, warehouses and in the field. As per financial performance, ICFL has posted total income/net profits of Rs. 396.91 cr. / Rs. 112.13 cr. (FY14), Rs. 528.06 cr. / Rs. 149.04 cr. (FY15), Rs. 644.05 cr. / Rs. 191.64 cr. (FY16) and Rs. 719.92 cr. / Rs. 210.80 cr. (FY17). For upto Q3 of FY18, it has reported net profit of Rs. 164.08 cr. on total revenue of Rs. 585.95 cr. So company has posted consistent growth over last couple of years. ICFL has posted an average EPS of Rs. 25.53 and average RoNW of 11.62% for last three fiscals. Issue is priced at a P/BV of 2.17 as per NAV of 263.96 on 31.12.17. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 24. As per RHP, industry average P/E ratio is 28.66 and listed peers comparison shown in above table. So issue looks fully priced. On BRLM's front, five merchant bankers associated with this issue and have handled 58 public issues in the past three years. When we take recent 10 IPOs of each BRLM then out of those 6 issues opened below their offer price and 4 opened at par on listing dates. As per financials, company's growth is consistent and very good, RoNW is 11.62% for last three fiscals and issue is priced at P/E of around 24 as per latest earnings. Company is an NBFC with principal lines of business, namely corporate lending, SME lending, vehicle financing and housing financing. Last two business segments (Vehicle Finance & Housing Finance) are started in recent past and it may give further boost to company's growth, but increasing bond yields and FD rates may put pressure on margins. So we give "SUBSCRIBE FOR LONG TERM" rating to this IPO.
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