Sharda Cropchem Limited: Value Pick Stock May 2019, Update
Update
Q1 FY23 Earnings
Sharda Cropchem Limited (SCL) – a fast-growing global agrochemicals company with a peer position in the “generic crop protection chemicals” industry has posted its Q1 FY23 numbers today.
Revenues
The Company, on a consolidated basis, posted revenue of INR 824.53 Cr for the Q1 ending 30 June 2022 as compared to INR 622.68 Cr for the same period last year, registering a growth of 32.42% year-on-year basis. However, the quarter-on-quarter revenue of the company de-grew by 42.52% (INR 1434.49 Cr for the quarter ended 31 March 2022)
The Agrochemicals segment is the highest revenue generator for Sharda Cropchem, registering a growth of 15.05 percent Y-O-Y basis (INR 614.87 Cr for Q1 FY23 v/s INR 534.30 Cr for Q1 FY22). However, the non-agrochemicals segment registered a growth of 137.25 percent Y-O-Y (INR 209.66 Cr for Q1 FY23 v/s INR 88.37 Cr for Q1 FY22)
Total Expenses of the Company are as follows –
INR 827.15 Cr as on 30 June 2022,
INR 562.67 Cr as on 30 June 2021,
INR 1216.69 Cr as on 31 March 2022
Profit After Tax
The Company has registered a Net Profit of INR 22.64 Cr for the quarter ended 30 June 2022 as compared to INR 38.06 Cr for the same period last year, registering a fall of 40.51% Y-O-Y basis, while quarter-on-quarter PAT fell by 87% (INR 177 Cr for the last quarter)
EPS of the Company are as follows –
INR 2.51 as on 30 June 2022,
INR 4.22 as on 30 June 2021,
INR 19.62 as on 31 March 2022
Daily Chart –
sharda cropchem share price ends at INR 563.50, down 18.38% (or INR 126.90) when writing this content with a volume of 15,42,039 shares on the National Stock Exchange.
Sharda Cropchem Limited is a value pick stock of Finblab (has given 2x returns in 36 months).
Final Comment: The Company has posted a weak set of numbers Q-O-Q and Y-O-Y basis. Though it is following Asset Light Business Model and generating high ROE and ROCE, one can avoid the stock for the time being.
>>> Must Read: IMPORTANT Q1 RESULTS FOR THIS WEEK
6 May 2019
Sharda Cropchem Limited is a fast growing global agrochemicals company with leadership position in the generic crop protection chemicals industry.
Sharda Cropchem Limited – History
Sharda Cropchem (SC) was incorporated as Sharda Worldwide Exports Private Limited in the year 2004 as a private limited company.
The Company changed its name to Sharda Cropchem Private Limited pursuant to the resolution passed in the year 2013.
The company was converted into a public limited company in the year 2013 itself and consequently, the name of the company was changed to Sharda Cropchem Limited.
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Business
The business of the Sole Proprietary (sharda cropchem) consisting of manufacture and export of dyes, dye intermediates, pesticides, agrochemicals and V-Belts.
Within the typical agrochemical value chain, the company has implemented an asset-light business model that enables the company to offer a diversified range of formulations, without incremental manufacturing capex.
Products
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Agro Chemicals: Sharda Cropchem is engaged in the marketing and distribution of a wide range of formulations and generic active ingredients globally. The Company’s core strength lies in identifying generic molecules, preparing dossiers, seeking registrations, marketing and distributing formulations or generic active ingredients in fungicide, herbicide and insecticide segments. Sharda Cropchem recently entered into the biocide segment and has acquired several registrations from the existing registration holders, primarily, in Europe.
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Conveyor Belts: Sharda Cropchem Limited is engaged in the supplying a variety of Conveyor belts, V-belts, etc. These belts are used mainly in mining projects followed by Steel plants, quarries, grain silos, cement manufacturing facilities, ports, tunnelling projects, etc.
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Industrial Chemicals: Sharda Cropchem with its network of suppliers and its presence worldwide is also catering to customer needs for organic and inorganic chemicals, spread over a variety of industries. The main industries that the company catering to are (1) Water Treatment, (2) Food & Food ingredients, and (3) Other Industrial applications
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Sharda Biocide: Sharda Biocides is an independent company with a well-established reputation in the pest control sector.
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Company Reach
With an objective to increase the Companys presence in the agrochemical value chain, Sharda Cropchem has set up its own sales force in Colombia, Europe, Mexico, South Africa, India, and other jurisdictions.
USP
Sharda Cropchem’s key business differentiator is its early presence in developed markets with entry barriers that have a high cost of registration, and stringent testing standards with prolonged approval timeline.
Listed On
The shares of Sharda Cropchem Limited are presently listed at Bombay Stock Exchange (BSE); CODE 538666 and National Stock Exchange (NSE) as SHARDACROP
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Stock Info – Sharda Cropchem Limited
Share Holding Pattern
Financials – Sharda Cropchem Limited
Conclusion
Sharda Cropchem Limited is a fast-growing global agrochemicals company with an asset-light business model.
The Company was the brainchild of Mr. R. V. Bubna, a Chemical Engineer from IIT, Bombay, and with a 45 year experience of working in the chemical industry. He together with Mrs. Sharda R. Bubna commenced business operations through their sole proprietorship concerns.
Promoters of the company are having steady stake (more than 74%) since last 4 quarters with zero percent pledge shares.
For the period ended 31 December 2018, the company’s Net Sales stood at INR 346.72 Cr up 28.66% from INR 269.48 Cr in December 2017. However, quarterly Net Profit stood at INR 5.48 Cr in December 2018 down 84.45% from INR 35.23 Cr in December 2017.
Along with this, some of the top funds like Pinebridge Global Funds, DSP Blackrock Small Cap Fund, L&T Mutual Fund Trustee Limited, and HDFC Small Cap Fund is having more than 1% stake in the company.
On the technical front, the share price of Sharda Cropchem Limited is trading well above its 50 and 200 EMA on the daily chart.
Keeping the above listed points in mind, Sharda Cropchem Limited looks good at INR 385. Finblab recommends investing in the stock in staggered manner for medium to long term. (One can accumulate on decline also)
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