Coromandel International Ltd:Annual Report 2023-24 Analysis

Coromandel International Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History: Coromandel International Ltd. was established in the early 1960s as Coromandel Fertilisers Limited. It was a joint venture between Chevron Chemical Company of USA and EID Parry of India.

Headquarters Location and Global Presence: The company’s headquarters are located in Secunderabad, Telangana, India. While primarily focused on the Indian market, Coromandel has a growing international presence through exports and strategic partnerships.

Company Vision and Mission: (Data not available from common knowledge sources. Refer to the company’s official website.)

Key Milestones in Their Growth Journey:

• Early years: Establishment and focus on fertilizer production.
• Diversification: Expansion into crop protection, specialty nutrients, and retail.
• Acquisitions: Strategic acquisitions to strengthen market position and product portfolio.

Stock Exchange Listing Details and Market Capitalization: Coromandel International Ltd. is listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Please refer to financial websites for up-to-date market capitalization figures.

Recent Financial Performance Highlights: (Please refer to the company’s latest annual reports and investor presentations for recent financial performance highlights.)

Management Team and Leadership Structure: (Please refer to the company’s official website for current leadership structure and key management personnel.)

Any Notable Awards or Recognitions: (Data not available from common knowledge sources. Refer to the company’s official website.)

Their Products #

Complete Product Portfolio with Categories:

• Fertilizers: Complex fertilizers, single super phosphate, micronutrients, and water-soluble fertilizers.
• Crop Protection: Insecticides, herbicides, fungicides, and plant growth regulators.
• Specialty Nutrients: Organic fertilizers, bio-stimulants, and soil conditioners.

Flagship or Signature Product Lines: Gromor fertilizers are a well-known and established product line.

Key Technological Innovations or Patents: (Data not available from common knowledge sources. Refer to the company’s official website.)

Manufacturing Facilities and Production Capacity: Coromandel has multiple manufacturing facilities located across India. (For specific locations and capacity details, refer to the company’s official website and annual reports.)

Quality Certifications and Standards: The company adheres to various quality certifications and standards for its products and processes.

Any Unique Selling Propositions or Technological Advantages: Coromandel focuses on providing integrated farming solutions to farmers, combining fertilizers, crop protection products, and advisory services.

Recent Product Launches or R&D Initiatives: (Please refer to the company’s latest press releases and annual reports for recent product launches and R&D updates.)

Primary Customers #

Target Industries and Sectors: Primarily the agricultural sector.

Geographic Markets (Domestic vs. International): Primarily domestic (India), with a growing focus on international exports.

Major Client Segments (Agricultural, Industrial, Residential, etc.): Primarily farmers and agricultural businesses.

Distribution Network and Sales Channels: Extensive distribution network through dealers, retailers, and direct sales to large agricultural businesses.

Major Competitors #

Direct Competitors in India and Globally:

• India: Chambal Fertilisers, National Fertilizers Limited (NFL), Gujarat State Fertilizers & Chemicals (GSFC), Paradeep Phosphates Ltd (PPL).
• Globally: Yara International, Nutrien, Mosaic Company.

Competitive Advantages and Disadvantages:

• Advantages: Strong brand reputation in certain regions of India, extensive distribution network, diversified product portfolio, focus on integrated farming solutions.
• Disadvantages: Susceptibility to commodity price fluctuations, dependence on government policies and subsidies, competition from larger global players.

Market Positioning Strategy: Coromandel aims to be a leading provider of integrated farming solutions, focusing on improving crop yields and farmer profitability.

Future Outlook #

Expansion Plans or Growth Strategy: Coromandel is focused on expanding its product portfolio, strengthening its distribution network, and increasing its international presence.

Sustainability Initiatives or ESG Commitments: (Data not available from common knowledge sources. Refer to the company’s official website for detailed information on sustainability initiatives and ESG commitments.)

Industry Trends Affecting Their Business: Government policies on subsidies, changing agricultural practices, increasing demand for sustainable agriculture, climate change impacts.

Long-term Vision and Strategic Goals: (Data not available from common knowledge sources. Refer to the company’s official website.)

Comprehensive Performance Overview #

3-Year Trend Analysis of Key Financial Metrics #

• Total Income: Decreased from ₹29,784 crores in FY2023 to ₹22,308 crores in FY2024, contrasting with a significant increase from ₹19,231 crores in FY2022.
• EBITDA: Decreased from ₹3,093 crores in FY2023 to ₹2,680 crores in FY2024, following an increase from ₹2,179 crores in FY2022.
• EBITDA Margin: Increased from 10% in FY2023 to 12% for FY2024.
• PAT: Decreased from ₹2,035 crores in FY2023 to ₹1,719 crores in FY2024.
• Net Worth: Increased from ₹7,868 crores in FY2023 to ₹9,403 crores in FY2024, up from ₹6,298 crores in FY2022.
• Debt-Equity Ratio: Remained at 0.00 for FY2022 through FY2024, indicating a zero net debt position.
• Earnings Per Share (EPS): Decreased from ₹69 in FY2023 to ₹58 in FY2024, following a rise from ₹48 in FY2022.
• Return on Equity: Stands at 18.94% for FY24, decrease from 28.22% during FY23.
• Working Capital: Increased during the year, impacted by higher channel inventory due to reduced consumption.

Business Segment Performance #

• Nutrients and Allied Businesses: Faced challenges due to sub-normal monsoons and reduced subsidy rates, impacting agri-input consumption. Phosphatic fertilizer sales were down 3% at 35.4 LMT. Maintained leadership in the SSP segment with 6.5 lakh MT sales.
• Crop Protection: Registered a 20% volume growth but an 8% revenue decline due to price erosion in key molecules. Expanded presence through improved customer relationships and new product introductions, with new products contributing 15% of domestic formulations sales.
• Specialty Nutrients: SND business has expanded its product range with new chelated products like Manganese and Iron and introduced in-house liquid Boron. Moreover, it has developed process for producing fluorine-based sodium silico fluoride and successfully completed trials for a novel Urea SSP complex fertilizer.
• Bio Products: Introduced ‘Quite’, an organic mosquito repellent, and ‘Biocharm’, a microbial consortium for micronutrient enhancement.
• Retail: Launched new products like Adiraj, Tolibro 1&2, F20, Magwin among others. Registered strong growth despite weak business environment.
• CDMO and Specialty Chemicals: Forayed into CDMO and Specialty Chemicals, leveraging existing capabilities in complex chemistries. Activities initiated with global innovator companies for novel molecule and intermediate manufacturing.

Major Strategic Initiatives and Their Progress #

• Backward Integration: Commissioned a 1650 TPD sulphuric acid plant in Visakhapatnam, enhancing self-sufficiency. Progressing with a 650 TPD phosphoric acid and 2000 TPD sulphuric acid capacity at Kakinada. Acquired a 45% stake in Baobab Mining and Chemicals Corporation (BMCC) in Senegal, doubling rock output.
• New Product Introductions: Launched Nano DAP, a proprietary liquid fertilizer, and 12 other resource-efficient solutions. Crop Protection introduced seven new products, including a patented in-licensed product.
• Technology Investments: Acquired a majority stake in Dhaksha Unmanned Systems Pvt. Ltd. (drones) and made investments in XMachines (robotics) and other agtech solutions.
• Expansion into New Businesses: Forayed into Specialty Chemicals and CDMO, leveraging existing infrastructure and R&D capabilities. Strengthened R&D for new product development and initiated activities with global companies for novel molecule manufacturing.
• Digital Transformation: Implemented dealer portal and sales force tools and established Digital Data Centers for process improvements.

Risk Landscape Changes #

• Environmental Risk: Addressed through enhanced effluent treatment capabilities and compliance with pollution control standards.
• Regulatory Risk: Managed by ensuring compliance with fertilizer control orders and tax requirements, and adapting to changes in government subsidy policies.
• Operational Risk: Addressed through diversification of raw material sources, strategic alliances, and maintaining safety guidelines.
• Financial Risk: Managed currency and exchange fluctuation risks, interest rate risks, and maintained liquidity.
• Cyber Risk: Implemented regular IT vulnerability assessments, penetration tests, and robust firewalls.
• Geopolitical Tensions: Impacted through disruptions in the supply chain and fluctuations in raw material prices.

ESG Initiatives and Metrics #

• Environmental: Installed a 6 million liters per day desalination plant at Vizag, achieved 44% green belt coverage, and maintained Zero Liquid Discharge at 12 units.
• Social: CSR spend of ₹42.40 crores, impacting ~10.23 lakh beneficiaries. Trained 203 women as drone pilots. Provided soil and organic carbon testing services to ~1.34 lakh farmers.
• Governance: Finalized ESG targets and strengthened governance mechanisms, including setting up a Board-level CSR & Sustainability Committee. Achieved a score of 61 in the DJSI Corporate Sustainability Assessment.
• Green Chemistry & Novel Technologies: Introduced 13 resource-efficient solutions including the Nano-DAP, Green triangle and Neem-based pesticides.

Management Outlook #

• The outlook for agriculture and rural activity is positive, driven by expectations of a normal monsoon, good Rabi wheat crop, and higher summer crop sowings.
• The Company is focused on strengthening core agricultural businesses and expanding into adjacent and technology areas.
• Continued emphasis on sustainability, with specific targets for reducing emissions, increasing renewable energy use, and achieving water neutrality.
• Plans to leverage technology solutions, including drones and robotics, to enhance agricultural productivity and efficiency.
• Commitment to expanding product portfolios and market presence, supported by R&D and strategic partnerships.

Detailed Analysis #

Financial Analysis of Coromandel International Limited #

3-Year Comparative Analysis (Consolidated) #

(₹ in Lakhs)

Significant Changes in Major Line Items (>10% YoY) #

• Nutrient and other allied business Assets: Increased by 15.15% in FY 2023-24, primarily due to increase in inventory and investments.
• Crop Protection Assets: Decreased by 13.02% in FY 2023-24, which could be due to decrease in trade receivables and other financial assets.
• Total Assets: Increased by 11.36%.
• Crop Protection Liabilities: Decreased by 33.85%, majorly due to decrease in acceptances under trade payables and other financial liabilities.
• Total Equity: Increased by 19.46% due to retained earnings and non-controlling interest.

Working Capital Trends #

(₹ in Lakhs)

• Working Capital: Increased significantly in FY 2023-24, driven by higher inventory and reduction of Govt. subsidies receivable.

Asset Quality Metrics #

(₹ in Lakhs)

• Impairment Allowance to Trade Receivables Ratio: Decreased to 7.1% during the year as collections improved.

Debt Structure and Maturity Profile #

Debt Structure (Consolidated):

As at March 31, 2024, total borrowings (Short Term) amounted to ₹ 5,179 lakhs. As at March 31, 2023, total borrowings (Short Term) amounted to ₹ 460 Lakhs.

Maturity Profile: The provided information does not offer a detailed maturity profile beyond the current/non-current classification. A more granular breakdown of loan repayment schedules would be required for a complete maturity analysis.

Off-Balance Sheet Items #

Guarantees:

• The Company provided a sponsor guarantee for USD 41.1 million for Tunisian Indian Fertilisers S.A. (TIFERT). Coromandel’s share is proportionate to its 15% holding. The Company believes it is unlikely to have any obligation under this guarantee.
• The Company has granted a guarantee for USD 2.25 million to a lender of its associate, BMCC.

Revenue Breakdown by Segment/Geography with Growth Rates #

• Nutrient and Other Allied Business: FY2023-24 revenue was C 19,749.20 crore, a decrease of 27.3% from FY2022-23 (C 27,162.19 crore).
• Crop Protection: FY2023-24 revenue was C 2,457.40 crore, a decrease of 6.8% from FY2022-23 ( C 2,635.62 crore).
• Inter-segment Revenue: FY23-24 was C174.21, an increase of 2.53% vs FY22-23.
• Geographical Breakdown:
  • India: FY2023-24 revenue was C 20,964.51 crore, a decrease of 26.5% from FY2022-23.
  • Outside India: FY2023-24 revenue was C 1,093.89 crore, an increase of 0.8% from FY2022-23.

Cost Structure Analysis #

The consolidated statement of Profit and Loss shows cost of materials as the main expense in both financial years 2023-24 and 2022-23.

Margin Analysis #

• Operating Margin: The consolidated operating profit margin stood at 10.90% for financial year 2023-24 vs 9.85% from financial year 2022-23.
• Net Profit Margin: The consolidated net profit margin for FY2023-24 was 7.80%, compared to 6.87% in FY2022-23.

EPS Analysis (Basic/Diluted) #

• Basic EPS: FY2023-24 was C 55.81, a decrease from C 68.51 in FY2022-23.
• Diluted EPS: FY2023-24 was C 55.75, a decrease from C 68.38 in FY2022-23.

Cash Flow and Liquidity Analysis #

Detailed OCF, ICF, FCF Components #

Operating Cash Flow (OCF) #

• FY2023-24: ₹146,178 Lakhs.
• FY2022-23: ₹56,047 Lakhs. *Increase in OCF is driven by reduced inventory with focus on collections.

Investing Cash Flow (ICF) #

• FY2023-24: ₹(133,428) Lakhs.
• FY2022-23: ₹63,904 Lakhs.
  • Major investments during the period include commission of new sulphuric acid plant, desalination unit and setting up of phosphoric acid and sulphuric acid complex.

Financing Cash Flow (FCF) #

• FY2023-24: ₹(36,321) Lakhs.
• FY2022-23: ₹(54,300) Lakhs.

Working Capital Management Efficiency #

• Debtors Turnover (days): Increased to 50 days in FY2023-24 from 23 days in FY2022-23, indicating a slower collection of receivables.
• Inventory Turnover (days): Increased to 100 days in FY2023-24 from 63 days in FY2022-23, indicating less efficient inventory management.
• Trade payables turnover ratio (days): 123 days in FY 2023-24 as against 76 days in FY 2022-23

Capex Analysis by Segment #

Nutrient and other allied business #

• FY2023-24: ₹37,684 Lakhs.
• FY2022-23: ₹46,446 Lakhs.

Crop Protection #

• FY2023-24: ₹13,813 Lakhs.
• FY2022-23: ₹15,608 Lakhs.

Total Capex #

• FY 2023-24: ~₹51,497 lakhs
• FY 2022-23: ~₹60,548 lakhs

Dividend and Share Buyback Trends #

Dividend #

• FY2023-24: Proposed final dividend of ₹6 per share.
• FY2022-23: Total dividend of ₹12 per share (interim and final).

Share Buyback #

• FY2023-24: The Company purchased treasury shares for ₹2,494 lakhs.
• FY2022-23: No share buyback.

Debt Service Coverage #

• Debt Equity Ratio: 0.00 for both FY2023-24 and FY2022-23, indicating a debt-free position.
• Interest Coverage Ratio: 14.15 for FY2023-24, down from 15.46 in FY2022-23.

Liquidity Position #

• Current Ratio: Increased to 2.10 in FY2023-24 from 1.77 in FY2022-23.

Cash and Cash Equivalents #

• FY2023-24: ₹105,979 Lakhs.
• FY2022-23: ₹133,138 Lakhs.

Bank balances other than cash and cash equivalents #

• FY2023-24: 1,69,215
• FY2022-23: 2,400

Financial Analysis of Coromandel International Limited #

Profitability Ratios (3-Year Trends) #

Coromandel International Limited (Standalone)

*ROIC is calculated by dividing EBIT with the average of opening and closing invested Capital

Coromandel International Limited (Consolidated)

*ROIC is calculated by dividing EBIT with the average of opening and closing invested Capital

• ROE has decreased significantly in FY24, indicating lower profitability relative to shareholders’ equity, moving away from previous year growth trend.
• ROA also shows a declining trend over the three years, suggesting a decrease in efficiency in utilizing assets to generate profit.
• ROIC show that the company’s ability to generate returns on the capital invested in business is decreasing in the current year.
• EBITDA margin has improved by 1% and then decreased by 3% in FY24 as compared to FY22
• Net Profit Margin decreased by 1% to 7%.

Industry Comparison (General Trend): The fertilizer industry generally experiences fluctuations due to factors like raw material costs, subsidy policies, and seasonal demand.

Liquidity Metrics #

Coromandel International Limited (Standalone)

*Cash Ratio = (Cash and Cash Equivalents + Bank Balances)/Current liabilities

Coromandel International Limited (Consolidated)

*Cash Ratio = (Cash and Cash Equivalents + Bank Balances)/Current liabilities

• The current ratio is has increased, indicating improved ability to meet short-term obligations.
• The Cash Ratio has decreased during the year.

Industry Comparison (General Trend): Companies in this sector usually maintain reasonable liquidity, but the ratios here suggest Coromandel is in a good position.

Efficiency Ratios #

Coromandel International Limited (Standalone)

Coromandel International Limited (Consolidated)

• Asset Turnover Ratio shows the efficiency of the company by the revenue generated per rupee of assets. The ratio has declined indicating the assets utilization.
• Inventory Turnover has increased, meaning the company takes more days to clear the inventory in hand.
• Receivables Turnover has also increased meaning the collection period is longer.

Industry Comparison (General Trend): These metrics can be highly dependent on the specific product mix and business model within the broader sector.

Leverage Metrics #

Coromandel International Limited (Standalone)

Coromandel International Limited (Consolidated)

• Coromandel has maintained zero net debt.
• The interest coverage ratio is healthy level, but has decreased.

Industry Comparison (General Trend): Debt levels can vary, but Coromandel’s position is conservative. The high interest coverage ratio is a positive sign.

Segment-Wise ROIC #

ROIC calculation requires EBIT and the invested capital data. From the provided data, this breakdown is available only on a consolidated basis:

• The Nutrient business, being larger, naturally contributes more to absolute earnings, but the relative returns on capital are slightly different.
• The crop protection segment is relatively smaller but significant.

Industry Comparison (General Trend): Direct comparison would require specific segment data from competitors, which is not provided.

Working Capital Ratios #

Coromandel International Limited (Standalone)

Coromandel International Limited (Consolidated)

• Working capital increased during the year for both standalone and consolidated.

Industry Comparison (General Trend): Working capital requirements are generally significant in the fertilizer industry due to the nature of the business.

Coromandel Business Segments Analysis - FY2023-24 #

Overall Performance #

Coromandel faced a challenging FY2023-24 due to sub-normal monsoon, falling reservoir levels, and subsidy rate corrections, impacting agri-input consumption and food grain production.

Revenue and Profitability #

• Consolidated Total Income: Decreased to Rs 22,290 crore from Rs 29,784 crore.
• Nutrient and Allied Business: Revenue decreased to Rs 19,775.20 Crores, segment profit decreased.
• Crop Protection: Revenue decreased by 8% to Rs 2457.4 crores, impacted by price erosion despite volume growth.
• Segment Profit: Nutrient and allied business profit decreased, Crop protection profit before tax decreased.

Market Share and Competitive Position #

• Fertilizer: Largest private phosphatic fertilizer company in India, with 15% market share in NPK and DAP.
• Crop Protection: 5th largest agrochemical player in India.
• Speciality Nutrients: Market leader.
• Bio Products: Largest neem-based Azadirachtin manufacturer globally.
• Retail: Operates 759 rural retail outlets across three southern Indian states, serving over 3 million farmers.

Key Products/Services Performance #

• Fertilizers: Record cumulative production volume of complex fertilizers at 94.8% capacity utilization. Distinctive NPK products represent ~38% of fertilizer sales volumes.
• Specialty Nutrients: Introduced Acumist Boron, Seaweed granules, NPK consortium-based products, and Nano DAP.
• Crop Protection: Launched seven new products, with new products contributing 15% of domestic formulation sales.
• Bio Products: Expanded portfolio and Introduced biofertilizers, with the newly launched ‘Quite’, an organic mosquito repellent.

Geographic Distribution and Market Penetration #

• Manufacturing Facilities: 18 plants across South, West, Central, and North India.
• Retail Presence: 759 rural retail outlets across Andhra Pradesh, Telangana, and Karnataka, entering Tamil Nadu.
• Crop Protection: Products marketed in 80+ countries.
• BMCC: Strengthening BMCC operations is crucial, planning to setup fixed processing plant.
• Market Expansion: Retail business plans to expand footprint by 100 additional stores in existing and new markets.

CAPEX and ROIC #

• Nutrient Business: Commissioned a new 1650 TPD sulphuric acid plant in Visakhapatnam (Rs 400 crore investment). Announced a 650 TPD phosphoric acid and 2000 TPD sulphuric acid complex in Kakinada.
• Crop Protection: Initiated infrastructure development on a 50-acre site in Dahej, Gujarat, for multi-product plants.
• Environment: Setup a 6 million litre per day desalination plant in Vizag.

Operational Efficiency Metrics #

• Fertilizer Plants: Achieved 94.8% capacity utilization.
• War on waste: The company focuses on War on Waste to improve efficiencies.
• Sulphuric Acid Plant (Visakhapatnam): Became self-sufficient for acid needs.
• Digital Initiatives: Implementation of Manufacturing Data Management platform (CRISP-ER), Digital Maintenance, and Raw Material Movement processes, and a Centre of Excellence (CoE) for data integration and analytics, focused on production optimization.
• Drone Spraying Services: Gromor Drive initiative covered over 28,000 acres, improving spraying efficiency.
• Employee Training: Conducted 2.32 lakh man-hours of training.

Growth Initiatives and Challenges #

• Growth Initiatives:
  • New Product Development: 13 new products across nutrients, crop protection, and bio products, including proprietary ‘Nano DAP’.
  • Backward Integration: Commissioning of sulphuric acid plant, scale-up of mining operations (BMCC), and new phosphoric and sulphuric acid complex at Kakinada.
  • Technology Investments: Investments in Dhaksha (drones) and XMachines (robotics).
  • Foray into New Businesses: Specialty Chemicals and Contract Development & Manufacturing Organization (CDMO).
• Challenges:
  • Sub-normal monsoon and lower reservoir levels impacted agri-inputs consumption.
  • Sharp corrections in fertilizer subsidy rates and global headwinds in crop protection affected margins.
  • Global competition and the need to adapt to changing regulations in agrochemicals.
  • Ammonia Gas leakage at Ennore unit.
  • Maintaining consistent raw material supply and dealing with price volatility.

Strategic Expansion #

• Foray into Specialty Chemicals and CDMO, leveraging existing capabilities in complex chemistries.
• Exploration of adjacent opportunities in drone applications for defense, agriculture, and enterprise domains.
• Investments in Agtech solutions to promote smart farming.

Coromandel International Limited: Risk Assessment #

Nutrients & Allied Businesses #

Strategic Risks #

• Severity: High
• Likelihood: Medium to High
• Trend: Increasing
• Mitigation Strategies:
  • Promoting direct subsidy transfer to farmers.
  • Increased focus on non-subsidy-reliant businesses.
  • Development and registration of new products.
  • Partnerships with agricultural input corporations.
• Control Effectiveness: Partially Effective
• Potential Financial Impact: High

Operational Risks #

• Severity: Medium to High
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies:
  • Close monitoring of global raw material costs.
  • Implementation of a diversified procurement strategy.
  • Strategic alliances.
  • Monitoring production process adaptability.
  • Sulphuric and phosphoric acid production
• Control Effectiveness: Partially Effective
• Potential Financial Impact: Medium to high

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies:
  • Monitoring exchange rate trends.
  • Implementing forward covers when timing and conditions are suitable.
• Control Effectiveness: Partially Effective
• Potential Financial Impact: Medium

Compliance/Regulatory Risks #

• Severity: High
• Likelihood: Low to Medium
• Trend: Stable
• Mitigation Strategies:
  • Understanding of laws and rules.
  • Consultation with legal professionals and specialists.
  • Tracking regulatory changes.
  • Implementation of stringent quality inspections at facilities.
  • Verification of bag quality.
  • Recycling of materials not meeting standards.
• Control Effectiveness: Partially Effective
• Potential Financial Impact: High

Emerging Risks #

Geopolitical Tensions #

• Severity: Medium to High
• Likelihood: Medium
• Trend: Increasing
• Mitigation: Diversify supply chain, strategic sourcing from stable regions, international partnerships.
• Control Effectiveness: Partially effective, ongoing initiatives.
• Potential Financial Impact: Increased operational costs, reduced market access, strategic uncertainties.

Cybersecurity Threats #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation: Regular Vulnerability Assessment & Penetration Testing (VAPT), Cyber Security awareness sessions.
• Control Effectiveness: Developing, proactive measures in place.
• Potential Financial Impact: Disruptions to production, financial loss from downtime, reputational damage.

Crop Protection #

Strategic Risks #

• Severity: High
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies:
  • Development and registration of new products.
  • Introduction of combination molecules.
  • Partnership marketing strategies.
  • Adjustments to meet regulatory changes.
• Control Effectiveness: Partially Effective
• Potential Financial Impact: High

Operational Risks #

• Severity: High
• Likelihood: Low
• Trend: Improving
• Mitigation Strategies:
  • Rigorous adherence to safety guidelines.
  • Implementation of asset life cycle management.
• Control Effectiveness: Good
• Potential Financial Impact: High

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies:
  • Monitoring trends in exchange rates.
  • Implementing forward covers when appropriate.
• Control Effectiveness: Partially Effective
• Potential Financial Impact: Medium

Compliance/Regulatory Risks #

• Severity: High
• Likelihood: Low to Medium
• Trend: Stable
• Mitigation Strategies:
  • Understanding of laws and rules.
  • Consultation with legal professionals.
  • Tracking regulatory changes.
• Control Effectiveness: Good
• Potential Financial Impact: High

Emerging Risks #

Geopolitical Tensions #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing
• Mitigation: Diversification of supply chain.
• Control Effectiveness: Developing.
• Potential Financial Impact: Increased operational costs, reduced market access.

Cybersecurity Threats #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation: Regular Vulnerability Assessment & Penetration Testing (VAPT), Cyber Security awareness sessions.
• Control Effectiveness: Developing, proactive measures in place.
• Potential Financial Impact: Disruptions to production, financial loss from downtime, reputational damage.

Bio Products #

Strategic Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation:
  • Diversifying product offerings.
  • Expanding into new, non-Azadirachtin portfolio, including biofertilizers and microbial crop protection.
• Control Effectiveness: Developing
• Potential Financial Impact: Medium to High

Operational Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Stable
• Mitigation:
  • Collaborating with NGOs for local neem seed procurement.
  • Developing own neem farms.
• Control Effectiveness: Progressing
• Potential Financial Impact: Medium

Compliance/Regulatory Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Stable
• Mitigation:
  • Adherence to standard operating procedures.
  • Compliance with the Fertiliser Control Order.
• Control Effectiveness: High
• Potential Financial Impact: Medium

Emerging Risks #

Geopolitical Tensions #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing
• Mitigation: Diversification of supply chain.
• Control Effectiveness: Developing.
• Potential Financial Impact: Increased operational costs, reduced market access.

Cybersecurity Threats #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation: Regular Vulnerability Assessment & Penetration Testing (VAPT), Cyber Security awareness sessions.
• Control Effectiveness: Developing, proactive measures in place.
• Potential Financial Impact: Disruptions to production, financial loss from downtime, reputational damage.