Agrolife to focus on delivering value to farmers through R&D

After announcing it's financial results for the quarter and financial year ended March 31, 2024, Best Agrolife Limited, one of India’s leading agrochemicals manufacturers, has said it was entering the new fiscal year with an optimistic outlook with focus on delivering value to farmers through R&D.

Commenting on the result and overall update on the financial year 2023-24, Vimal Kumar, Managing Director, Best Agrolife Ltd., said at the Board meeting held on May 24:“Despite the many challenges faced during the year, for the full year FY24, our revenue grew by 7% on Y-o-Y basis. This growth was driven by our shift in business strategy from institutional sales to branded sales. This has resulted in the growth of our branded business by 85%. 

However, the EBITDA margins reduced to 12% in FY24, mainly because of the stress on the gross margin due to pricing pressures in the market, primarily caused by oversupply from China. Combination of weather factors, our shift towards branded products, and an expanding distributor network led to higher trade inventory.

Additionally, employee costs have gone up due to a shift in business strategy. The planned increase in employee cost is a strategic investment to strengthen our sales distribution network. Also, other expenses have risen due to incremental marketing costs for focus on branded business. 

Despite the high competition from imports, particularly pricing pressure from China and the challenges posed by the global economic climate, the company has maintained good profit margins, he said.

"This year, our company achieved several significant operational milestones. We became a major partner in Kashmir Chemicals by acquiring a 99% stake, increasing our formulation capacities. Our strategic acquisition of Sudarshan Farm Chemicals will allow us to leverage SFCL’s robust R&D capabilities, IP portfolio, and backward-integrated technical manufacturing expertise. These developments will be crucial in enhancing our manufacturing and innovation capabilities," he said.

Kumar also said, "The company continues to build upon a strong registration portfolio having garnered 94 registrations for newer technicals and formulations in FY’24. "We have established a strong foundation for accelerated growth by securing patents for newer groundbreaking products. In FY’24 we launched multiple products, including our patented formulation “Tricolor”. Our past investments in research will see us launching multiple patented products such as “Warden Extra”, “Defender”, “Orisulam” and potentially “Shot Down” in FY’25. The new additions to our patent portfolio will see us reaping the fruits of our investments in FY’25 and beyond."

He said, "We continue to strategically expand our R&D capabilities with potential yields in the upcoming years. We are committed to developing safer and newer chemistries that are beneficial for the farmer and the environment. With a robust pipeline of new innovative and patented products coupled with an increased market presence, we are well-positioned to capitalize on emerging opportunities and drive value for our shareholders."

The results, however, showed widening of the company's net loss to Rs 72.49 crore for the fourth quarter ended March 31, 2024 on price erosion. It had posted a loss of Rs 8.41 crore in the year-ago period.

Total income for the company, which has plants in Uttar Pradesh and Jammu Kashmir, fell 46.68 per cent year-on-year to Rs 135.39 crore, the company said in a statement. For the full fiscal year 2023-24, Best Agrolife posted a 45 per cent drop in net profit to Rs 106 crore, from Rs 192 crore in the previous fiscal.  Total revenue grew 7.31 per cent to Rs 1,873.32 crore on higher growth in branded sales.

The company's board recommended a dividend of Rs 3 per equity share of face value Rs 10.