Shree Pushkar Chemicals & Fertilizers Ltd:Annual Report 2023-24 Analysis

Shree Pushkar Chemicals & Fertilisers Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History: Shree Pushkar Chemicals & Fertilisers Ltd. was incorporated in 1993.

Headquarters Location: Mumbai, India

Company Vision and Mission: The company aims to be a leading global player in dyes, dye intermediates, and specialty chemicals, committed to sustainable growth, innovation, and customer satisfaction. Their mission revolves around providing high-quality products, fostering strong relationships with stakeholders, and contributing to a greener environment.

Key Milestones in their Growth Journey:

• Early years focused on manufacturing dyes and dye intermediates.
• Gradual expansion into specialty chemicals and fertilizers.
• Capacity expansions and technological upgrades over the years.
• Successful foray into international markets.

Stock Exchange Listing Details and Market Capitalization: Listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Market capitalization varies and should be checked on current financial websites.

Recent Financial Performance Highlights: Recent financials can be found on financial websites and reports.

Management Team and Leadership Structure: The company is led by a board of directors, including key managerial personnel overseeing various aspects of the business, such as manufacturing, marketing, and finance.

Any Notable Awards or Recognitions:

• Awards for export performance.
• Recognition for environmental initiatives.

Their Products #

Complete Product Portfolio with Categories:

• Dyes: Reactive Dyes, Acid Dyes, Direct Dyes, and others.
• Dye Intermediates: Key components for dye manufacturing.
• Fertilizers: Various grades of fertilizers.
• Cattle Feed Supplements: Supplements to enhance the nutrition of cattle.
• Soil Conditioners: To improve the health and fertility of the soil.
• Specialty Chemicals: Used across diverse industries.

Flagship or Signature Product Lines: Reactive Dyes and certain Dye Intermediates are considered flagship products.

Key Technological Innovations or Patents: The company has invested in R&D to develop innovative processes and formulations.

Manufacturing Facilities and Production Capacity: Multiple manufacturing facilities in India with varying production capacities depending on the product line.

Quality Certifications and Standards: ISO 9001:2015, ISO 14001:2015, and OHSAS 18001:2007 certifications.

Any Unique Selling Propositions or Technological Advantages: Emphasis on consistent product quality, timely delivery, and strong customer relationships. Focus on backward integration for certain products.

Recent Product Launches or R&D Initiatives: Focused on developing eco-friendly dyes and specialty chemicals. Continuously working on new fertilizer formulations.

Primary Customers #

Target Industries and Sectors:

• Textile industry (for dyes).
• Agriculture sector (for fertilizers).
• Chemical industry (for specialty chemicals and dye intermediates).

Geographic Markets (Domestic vs. International): Presence in both domestic and international markets, with exports to various countries.

Major Client Segments:

• Textile manufacturers
• Farmers and agricultural businesses
• Chemical companies

Distribution Network and Sales Channels: Extensive distribution network comprising dealers, distributors, and direct sales teams.

Major Competitors #

Direct Competitors in India and Globally: Competition comes from both domestic and international players in the dyes, dye intermediates, and fertilizer industries.

Competitive Advantages and Disadvantages: Advantages: Strong customer relationships, diverse product portfolio, backward integration for some products. Disadvantages: Vulnerability to raw material price fluctuations, competition from cheaper imports.

How they Differentiate from Competitors: Emphasis on product quality, customer service, and innovation.

Industry Challenges and Opportunities: Challenges: Environmental regulations, fluctuating raw material prices, intense competition. Opportunities: Growing demand for dyes and specialty chemicals, government support for the agriculture sector.

Market Positioning Strategy: Aiming to be a reliable and innovative supplier of dyes, dye intermediates, and fertilizers.

Future Outlook #

Expansion Plans or Growth Strategy: Plans for capacity expansion, new product development, and expanding its global footprint.

Upcoming Products or Innovations: Focus on developing sustainable and eco-friendly products.

Sustainability Initiatives or ESG Commitments: Investment in environmental protection measures, water conservation, and waste management.

Industry Trends Affecting their Business: Growing demand for eco-friendly products, increasing focus on sustainability, and technological advancements in manufacturing.

Long-Term Vision and Strategic Goals: To be a leading global player in the dyes, dye intermediates, and specialty chemicals industry, committed to sustainable growth and customer satisfaction.

Shree Pushkar Chemicals & Fertilisers Ltd. - Financial Analysis Report #

Comprehensive Performance Overview #

3-Year Trend Analysis of Key Consolidated Financial Metrics #

• Total Revenue: Increased from INR 576 crores in FY22 to INR 684 crores in FY23, and further to INR 726 crores in FY24 (CAGR of approximately 12.3% FY22-FY24, 6.14% YoY growth in FY24).
• EBIDTA: INR 85.4 crores in FY22, decreased to INR 76.0 crores in FY23, and further declined to INR 70.4 crores in FY24.
• Profit After Tax (PAT): INR 52.9 crores in FY22, declined to INR 39.2 crores in FY23, and further to INR 37.0 crores in FY24.
• EBIDTA Margin: Decreased from 14.83% in FY22 to 11.03% in FY23, and 9.69% in FY24.
• PAT Margin: Decreased from 9.18% in FY22 to 5.44% in FY23, and 5.10% in FY24.

Analysis #

Revenue has grown, but profitability metrics (EBIDTA, PAT, and respective margins) have experienced a decline, indicating potential pressure on costs or pricing power.

Business Segment Performance (FY2023-24) #

• Chemicals Division (Standalone): 26% year-on-year growth in sales volumes and 30% revenue growth. Sales of 46,788 MTA amounting to INR 368.1 crores (81% of standalone revenue share), up from 36,990 MTA and INR 298.0 crores in FY23.
• Fertilizer and Allied Products (Standalone): Sales volume was 54,826 MTA with revenue of INR 61.9 crores (19% of standalone revenue share), a decrease from 61,175 MTA and INR 121.9 crores in FY23.
• Subsidiaries (Consolidated Impact):
  • Madhya Bharat Phosphates Private Limited (MBPPL): 8% increase in revenue, reaching INR 143 crores. Fertiliser sales were 95,540 MT at INR 129.96 crores.
  • Kisan Phosphates Private Limited (KPPL): Sales contribution was INR 98.27 crores, down from INR 132.43 crores. Fertiliser sales were 58,919 MT at INR 77.16 crores.

Analysis #

The Chemicals segment was a key growth driver for standalone operations, while the standalone Fertilizer segment experienced a contraction. Subsidiary performance was mixed. Overall consolidated revenue grew by 6%.

Major Strategic Initiatives and Their Progress #

• Capital Expenditure: INR 174 crores of capex completed, fully funded through internal accruals.
  • Revamp of Unit 1 (SPCFL, Ratnagiri): Aimed at capacity expansion.
  • Upgrades to Units 1 & 2 of Madhya Bharat Phosphates (Madhya Pradesh).
  • Expansion of Unit 5 (SPCFL, Ratnagiri): Focused on dye intermediates and animal health products.
• Renewable Energy: Two solar power plants (total 5.2 MWDC commissioned, additional 3.8 MWDC initiated) in Ahmednagar, Maharashtra, for captive consumption.
• Future Projects: Planned expansion of SPCFL Unit 4, Units 5 & 6 in Ratnagiri, and further investment in solar power.
• Preferential Issue: Allotment of 7,11,811 warrants convertible into equity shares to Mr. Gautam Makharia.

Detailed Analysis #

Financial Analysis Report: Shree Pushkar Chemicals & Fertilisers Ltd. (FY 2023-24) #

Report Details #

• Date of Report: September 5, 2024
• Data Source: Annual Report for the Financial Year ended March 31, 2024

Overview of Financial Performance #

Shree Pushkar Chemicals & Fertilisers Ltd. (SPCFL) reported a growth in consolidated total revenue by 6.16% to INR 73,809.03 lakhs in FY24 from INR 69,531.46 lakhs in FY23. Consolidated Profit After Tax (PAT) stood at INR 3,704.64 lakhs in FY24, a slight decrease from INR 3,722.72 lakhs in FY23. Standalone total revenue saw a more significant increase of 15.97% to INR 49,312.81 lakhs, with standalone PAT rising to INR 2,712.20 lakhs from INR 1,402.25 lakhs in the previous year. The Chemicals segment was a key driver, with a 26% YoY growth in sales volumes and 30% revenue growth. The company completed capital expenditure of INR 174 crores, funded through internal accruals, focusing on capacity expansion and renewable energy.

Comparative Financial Analysis (Consolidated) #

Balance Sheet Analysis (Consolidated - 2 Year) #

(INR in Lakhs)

Note: A 3-year detailed comparative analysis is limited by data availability in the provided excerpts. Financial statements show FY24 and FY23.

Profit & Loss Analysis (Consolidated - 2 Year) #

(INR in Lakhs)

Shree Pushkar Chemicals & Fertilisers Ltd. FY 2023-24 Financial Performance Analysis #

Revenue Analysis #

Consolidated Performance #

• Total revenue from operations for FY24: INR 726.17 crores (6.16% growth from INR 684.03 crores in FY23)
• Chemicals segment revenue grew by 30% YoY, with sales volumes increasing by 2

Cash Management #

Cash Flow and Liquidity Analysis #

Key Performance Indicators #

Segment Performance Analysis #

Risk Framework #

Comprehensive Risk Assessment #

Strategic and Management Analysis #

Long-term Strategic Goals and Progress #

Shree Pushkar Chemicals & Fertilisers Ltd. (SPCFL) focuses on strategic growth, transformation, and sustainable profitable expansion. Key long-term goals include expanding capacities, diversifying its product portfolio (particularly in dye intermediates and animal health products), and pursuing backward and forward integration to strengthen market presence and operational efficiency.

Progress in FY 2023-24 includes a capital expenditure of INR 174 crores, fully funded through internal accruals. This involved the revamp of Unit 1 (SPCFL) for capacity expansion, upgrades to Units 1 and 2 of subsidiary Madhya Bharat Phosphates Private Limited (MBPPL), establishment of two solar power plants for renewable energy, and significant expansion of Unit 5 (SPCFL) for dye intermediates and animal health products.

Future strategic initiatives include the expansion of SPCFL Units 4, 5, and 6 in Ratnagiri, Maharashtra, and further investments in solar power to enhance captive capacity. These are planned to be funded through internal accruals and a preferential issue to promoters.

Competitive Advantages and Market Positioning #

SPCFL leverages India’s significant position in the global chemical and dyestuff markets. The company’s competitive strengths derive from its agile approach to customer needs, strong market positioning evidenced by a 26% YoY sales volume growth and 30% revenue growth in its Chemicals division in FY2023-24. Its diversified product portfolio caters to varied end-user industries, mitigating sector-specific risks. The strategy of backward and forward integration, coupled with investments in captive solar power, aims to enhance cost-competitiveness and supply chain control, further solidifying its market position.

Innovation Initiatives and R&D Effectiveness #

The company emphasizes the use of “state-of-the-art” plant and technology, with a focus on continuous process upgrades to improve yield, efficiency, and meet international standards. Innovation appears to be directed towards process optimization and strategic capital expenditure for sustainability and cost reduction, such as the INR 174 crores capex which included investment in solar plants (0.26% of total capex specifically for environmental impact improvement via solar).

M&A Strategy and Execution #

SPCFL’s M&A strategy has historically focused on inorganic growth in the fertiliser segment through acquisitions of wholly-owned subsidiaries: Kisan Phosphates Private Limited (KPPL) and Madhya Bharat Phosphate Private Limited (MBPPL). Post-acquisition execution has involved operationalizing and expanding these entities. The reported 8% increase in revenue for MBPPL in FY2023-24 to INR 143 crores indicates positive momentum in integrating and growing these acquired assets.

Management’s Track Record in Execution #

Management has demonstrated strong execution capability in FY2023-24, evidenced by:

• A 26% YoY growth in sales volumes and a 30% revenue growth in the Chemicals division.
• An overall consolidated revenue growth of 6% to INR 726 crores, and standalone revenue growth of 15.97%.
• Positive performance from subsidiary Madhya Bharat Phosphates Private Limited, with an 8% increase in revenue.
• Successful completion of INR 174 crores in capital expenditure, fully funded through internal accruals, directed towards capacity expansion and sustainability.
• Maintenance of operational efficiency through cost control and process improvements.

Capital Allocation Strategy #

SPCFL’s capital allocation strategy in FY2023-24 prioritized organic growth, operational efficiency, and shareholder returns:

• Growth Capex: INR 174 crores invested in capacity expansion, product diversification, and backward/forward integration, funded entirely by internal accruals.
• Sustainability & Cost Reduction: Investment in two solar power plants. Future plans include more solar capacity.
• Funding: Primarily internal accruals. A preferential issue of 7,11,811 warrants aims to fund further capacity enhancement in chemicals, fertilizers, and a 3.8 MWDC solar plant.
• Shareholder Returns: Recommended a final dividend of Rs. 1.50 per share for FY2023-24.
• Financial Flexibility: Maintained non-lien deposits of INR 117.8 crores, enabling strategic initiatives.

Financial Analysis of Shree Pushkar Chemicals & Fertilisers Ltd. (FY 2023-24) #

Financial Performance & Position #

Revenue Growth #

Consolidated total income for FY24 stood at INR 73,957.48 lakhs, a 6.16% increase from INR 69,668.01 lakhs in FY23. Standalone total income rose 15.58% to INR 49,479.64 lakhs from INR 42,807.85 lakhs. This growth was driven by a 26% YoY increase in sales volumes in the Chemicals division, which saw a 30% revenue growth.

Profitability #

Consolidated Profit Before Tax (PBT) decreased to INR 4,478.89 lakhs in FY24 from INR 5,097.44 lakhs in FY23. Consolidated Profit After Tax (PAT) also saw a slight decline to INR 3,615

Shree Pushkar Chemicals & Fertilisers Ltd. (FY 2023-24) Financial Analysis #

Overview #

Shree Pushkar Chemicals & Fertilisers Ltd. (SPCFL) manufactures and trades chemicals, dyes, dye intermediates, cattle feeds, fertilisers, and soil conditioners. The company operates through its standalone entity and two wholly-owned subsidiaries: Kisan Phosphates Private Limited (KPPL) and Madhya Bharat Phosphate Private Limited (MBPPL).

Financial Performance (FY 2023-24) #

Consolidated Performance: #

• Revenue from Operations: INR 726.17 crores, a 6.16% YoY increase from INR 684.03 crores.
• Profit Before Tax (PBT): INR 49.46 crores, down from INR 53.33 crores in FY23.
• Profit After Tax (PAT): INR 37.08 crores, marginally lower than INR 37.22 crores in FY23.
• Chemicals division sales volume

Audit and Regulatory Analysis: Shree Pushkar Chemicals & Fertilisers Ltd. (FY 2023-24) #

Auditor’s Opinion and Qualifications #

• Standalone Financial Statements: M/s. S. K. Patodia & Associates LLP issued an unqualified opinion, affirming a true and fair view of the company’s financial state as of March 31, 2024, in accordance with Indian Accounting Standards (Ind AS).
  • Key Audit Matters (KAMs):
    • Revenue from contracts with customers: Risk of incorrect recording due to varying customer terms and transaction prices.
    • Allowance for credit losses: Determination involves significant judgment based on historical data and economic conditions.
• Consolidated Financial Statements: M/s. S. K. Patodia & Associates LLP issued an unqualified opinion, affirming a true and fair view in conformity with Ind AS.
  • Key Audit Matters (KAMs): Consistent with the standalone report.
    • Revenue from contracts with customers.
    • Allowance for credit losses.

Key Accounting Policies and Changes #

• Basis of Preparation: Financial statements are prepared in accordance with Ind AS under the historical cost convention on an accrual basis. The operating cycle is identified as twelve months.
• Significant Accounting Policies:
  • Revenue Recognition (Ind AS 115): Revenue recognized upon transfer of control, net of discounts and exclusive of GST. Export benefits accounted for in the year of export.
  • Property, Plant and Equipment (PPE): Stated at historical cost less accumulated depreciation and impairment. Straight-line depreciation over estimated useful lives.
  • Intangible Assets: Stated at cost less accumulated amortization and impairment. Computer software amortized over 3 years.
  • Inventories: Valued at the lower of cost (FIFO) or net realizable value.
  • Financial Instruments (Ind AS 109): Classified and measured at amortized cost, FVTOCI, or FVTPL. ECL model applied for impairment.
  • Impairment of Non-Financial Assets: Assessed for indicators of impairment at each Balance Sheet date.
  • Leases (Ind AS 116): Right-of-use assets and lease liabilities recognized at commencement. Short-term and low-value leases expensed.
  • Employee Benefits: Defined contribution (Provident Fund) and defined benefit plans (Gratuity, actuarially determined).
  • Taxation: Current tax based on enacted rates. Deferred tax recognized on temporary differences.
• Changes in Accounting Policies: No new standards or amendments mandating changes were applicable for FY 2023-24. Policies consistently applied.

Internal Control Effectiveness #

• Auditor’s Opinion (Standalone): M/s. S. K. Patodia & Associates LLP reported an adequate and effective internal financial control system over financial reporting as of March 31, 2024.
• Auditor’s Opinion (Consolidated): Auditors reported adequate and effective internal financial controls with reference to consolidated financial statements as of March 31, 2024.
• Management’s Responsibility: Directors affirm adequate and effective internal financial controls.

Regulatory Compliance Status #

• Secretarial Audit: M/s. DSM & Associates indicated compliance with statutory provisions, proper Board processes, and compliance mechanisms, with one exception:
  • NSE and BSE levied Rs. 10,000 each for a one-day delay in filing prior intimation under Regulation 29(2)/(3) of SEBI (LODR) Regulations, 2015.
• Secretarial Audit Reports for Subsidiaries: Kisan Phosphates Private Limited and Madhya Bharat Phosphate Private Limited indicate compliance with applicable provisions.
• Secretarial Compliance Report (Reg 24A of LODR): Notes the fine for the one-day delay in prior intimation.
• Reporting of Frauds: No instances of fraud reported by Statutory Auditors, Cost Auditor, or Secretarial Auditor.
• SEBI LODR Compliance (Corporate Governance Report - Section 19b): Acknowledges the penalty by BSE and NSE for delayed intimation.
• Compliance with Secretarial Standards: The.