Rameshbhai Talavia, Chairman -; MD, Dharmaj Crop Guard

25 Nov 2022 , 03:37 PM

How does the company stand out vis-a-vis its other listed peers?
 
Our unique business model distinguishes us from our peers. We are present in various segments across the value chain. These include intermediate (upcoming plant), technical, formulation and B2C. Intermediate can be sold in both export and domestic markets. Likewise, technical products will cater to our export markets, domestic markets, B2B as well as B2C segments. We offer all our existing formulations in B2B. We are strengthening our presence in the B2C segment consistently. There are hardly any companies in India with such a business model with such a wide presence across segments with a portfolio of over 100 products.
 
Share with us the key expansion projects of the company, highlighted as one key area of use of IPO proceeds.
 
Our backward integration project is going on. By setting up the technicals manufacturing facility, we will augment our manufacturing capabilities to produce domestic grade agrochemicals, which, along with our export registrations, will be synergistic to our formulations business. We aim to increase the number of product registrations in overseas market which offer high margins. We will see margin expansion due to backward integration.
 
Part of the IPO proceeds will go towards loan repayment. What is the debt on your books at present? What will it be after the repayment?
 
Right now we have loan of about Rs 52 crore on our books. We will repay Rs 10 crore via IPO proceeds and rest through internal accruals. We will become a near debt-free company post the IPO.
 
What are the strategic priorities of the company? 
 
Our growth strategy is based on 3 important pillars. First, we plan to increase our customers consistently. For instance, when we started the company in 2016, we had 60 customers in the B2B customers. Today, this number stands at ~600. Similarly, our customer base in the B2C segment is also growing at a healthy pace. Second, we will continue to enter into newer markets. For instance, this year, we entered into North India and Maharashtra in B2C. Third, we will keep adding new products every year. We undertake market research, analysis and surveys regularly to understand the evolving needs of the consumers in India as well as export markets.
 
What are the synergies expected from the investment in Khetipoint?
 
Khetipoint is a digital initiative of the company. Under this, we will take our offerings to the farmers through the online channel. It has developed an online digital marketplace platform “Khetipoint” which aims to connect farmers from across India to their retailers and company experts. We will also provide farmers with advisory services to further strengthen our farmer connect. Further, farmers can compare the products and prices on this platform and then buy the best suitable product as per their needs.
 
What are margin drivers for the company?
 
First, the upcoming technical plant will help us ramp up our EBITDA margin. Second captive consumption of inputs post backward integration will aid margin of existing business. Going forward, we are looking to scale up our margin to industry average level of ~18%-20%.
 
Help us understand the company's ESG strategy and highlights of non-financial performance
 
Around half of the electricity consumption at our existing plant is through solar panels, which is also a more cost-effective source of energy. Insecticide products are labelled under various categories such as red label, blue label, etc. We are developing products which are safest and have low-dosage molecules. This will help reduce the carbon footprint of our products. We also undertake several CSR in the field of education. We also undertake farmer-level training, education and awareness programs. These programs help in inspiring farmers and enhancing their standard of living.