Nath Bio-genes (india) Ltd. · NSE:NATHBIOGEN
Nath Bio-genes (india) — Q3 FY20 Earnings Presentation
49 slides from Nath Bio-genes (india)'s earnings presentation, Jan 30, 2020
Slide 1: Cover letter to stock exchanges on results presentation
ws‘ Se. nes (1) Ltd. Nath Bio-Ge1993 PLC072842) (CIN L01110MH 30 January 2020 The Manager-Listing The Manager-Listing of India Ltd., National Stock Exchange BSE Limited Complex Exchange Plaza, Bandra-Kurla Phiroze Jeejeebhoy Towers,- Bandra (E) Dalal Street, Mumbai-400051 Mumbai-400001 NSE Code-NATH
Slide 2: Nath Bio Genes (India) Limited Earnings Presentation Q3 FY20
Nath Bio Genes (India) Limited Earnings Presentation Q3 FY20
Slide 3: Safe Harbour
Safe Harbour Certain statements in this document may be forward‐looking statements. Such forward‐looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, technological risks, and many other factors that could cause our actua
Slide 4: Nath: Gaining Grounds - Transformational Genes
Nath: Gaining Grounds ‐ Transformational Genes.. Market Leading Products • Exceptional High Yielding Cotton Hybrids with High Level Biotic & Abiotic Stress tolerance INR 2,197 Mn • Diversified product offerings : Paddy, 9MFY20 Revenue Vegetables and plant supplement‐Win Chi Win • Superior Worldwide
Slide 5: ..To Deliver Bumper Harvest..
..To Deliver Bumper Harvest.. Cotton Paddy FY23 FY23 4.5 mn packets 90K Quintals FY21 FY21 2.0 mn packets 72K Quintals FY19 FY19 0.8 mn packets 56K Quintals Vegetables Win Chi Win FY23 FY23 10K Quintals 125K Litres FY21 FY21 5K Quintals 70K Litres FY19 FY19 2.7K Quintals 43K Litres 4
Slide 6: 9MFY20 Results - FY19 Profits Surpassed
9MFY20 Results‐ FY19 Profits Surpassed • Growing Strongly: Despite delayed and heavy monsoon, achieved revenue growth of over 23% • Cotton gaining strong acceptance: ICAR Ranking 1&2; Lowest Sales Return from Kharif at 11% (FY 2019 – 24%) • Vegetables showing strong prospects: Sales of 3,200 quintal
Slide 7: Diversified Product Portfolio Delivering Strong Results
Diversified Product Portfolio Delivering Strong Results On Track to Achieving Guidance Product Mix – FY 2019 Key Revenue Sales Actual Guidance Achieved Contributor Forecasted for Sales in by ( %) FY20 9MFY20 Others 18% Cotton Cotton 1,200,000 1,100,000 92% 26% packets packets* Win‐Chi‐ Win Paddy 60,
Slide 8: Superior Products Drive Strong Financial Performance – 9MFY20
Superior Products Drive Strong Financial Performance – 9MFY20 Revenue (INR Mn) Gross Margin (%) EBITDA (INR Mn) 24.7% 23.0% 2,197 ‐0.3% 479.6 1,786 384.5 56.80% 56.60% 9MFY19 9MFY20 9MFY19 9MFY20 9MFY19 9MFY20 PAT (INR Mn) PAT Margin (%) EPS (INR/Share) 29.4% 22.55 29.4% 19.50 428.5 5.2% % 17.43 331
Slide 9: Superior Products Drive Strong Financial Performance – Q3FY20
Superior Products Drive Strong Financial Performance – Q3FY20 Revenue (INR Mn) Gross Margin (%) EBITDA (INR Mn) 330.6 18.6% ‐4.1% ‐5.3% 70.80% 67.90% 60.1 57 278.8 Q3FY19 Q3FY20 Q3FY19 Q3FY20 Q3FY19 Q3FY20 PAT (INR Mn) PAT Margin (%) EPS (INR/Share) 2.05 ‐5.9% 11.6% 39 11.7% 12.50% 11.80 % 1.84 35 Q
Slide 10: Industry Outlook
Industry Outlook KHARIF RABI o Cotton sales in line with estimates o Rabi showing good prospects: All crops o Paddy Sales effected due to delayed showing a 9% increase in acreage and prolonged monsoon o Strong north East Monsoon covering Southern India: At 10% above corresponding period in previous
Slide 11: Summary and Focus Areas
Summary and Focus Areas Build on fast growing Vegetables and Win Chi Win Segments Enhance product lines in Cotton to meet changing customer requirements Improving the Distribution Network to reach Northern and Southern Indian States 10
Slide 12: Increasing Focus on Marketing
Increasing Focus on Marketing • Three vertical being strengthened and enhanced • D4 concept and distribution network in progress Identified 200+ PAN India distributors to be personally serviced by individual officers from Cotton NGBL sales team; focusing on increasing presence in untouched areas of
Slide 13: Cotton – Winning Products
Cotton – Winning Products Operating Highlights Cotton Volume (in Packets) 11,00,000 Key States: Maharashtra, Gujarat, Karnataka, Andhra Pradesh, Telangana, MP 8,01,782 4,94,729 Other geographies being targeted: Orissa, 4,03,407 North India Top Products (ranked #1‐3): NBC 102, NBC 1022, NBC 1111, NBC
Slide 14: Paddy – High Yielding Products; Robust Distribution
Paddy – High Yielding Products; Robust Distribution Operating Highlights Paddy Volumes (in Quintals) 55,958 53,000 50,689 Key States: Bihar, Jharkhand ,Uttar Pradesh 41,428 Top Products: Loknath, Gorakhnath, Super Duper, Tehelka, Kabir, Gazab, Ford New Launches: Khushi, Shwetha‐43, Nath Mamra, Nath
Slide 15: Vegetables – Rabi Season Better than Expectations
Vegetables – Rabi Season Better than Expectations Strategic Initiatives • Rabi crop sowing at 10 year high: 8% increase YoY(%) • NBIL to focus on: Okra, Tomato, Chilli, Brinjal, Gourds, Cucumber – Has high yielding product varieties • in each with good acceptability amongst Indian farmers • Constitu
Slide 16: Win-Chi-Win – Benefitting from Shift to Organic Farming
Win‐Chi‐Win – Benefitting from Shift to Organic Farming Strategic Initiatives • Constituted a new vertical for WCW, highest margin business • Introduced separate kit for 1 acre land as a tiffin dose ‐ New SKUs: 500, 1,000 & 4,000 ml • New product testing on Biopesticide & Bio antivirus with Soil con
Slide 17: On Track for a Multi-Fold Value Creation; Guidance Maintained
On Track for a Multi‐Fold Value Creation; Guidance Maintained Revenue Guidance FY20 INR 2,800‐3,100 Mn Revenue Guidance FY21 INR 4,000‐4,500 Mn Gross Margin 50%+ Long Term Debt NIL Roadmap to A Successful Future Others 16% Others 18% Cotton 26% Cotton 36% Win‐Chi‐ Win Chi Win 10% Win 10% Vegetables
Slide 18: Expanding in new geographies and widening its product basket
Expanding in new geographies and widening its product basket Revenue by FY21 INR 4,000‐4,500 Mn Gross Margin 50%+ Long Term Debt NIL FY21 Revenue Drivers Key Segment Sales Forecasted for FY21 Cotton 2,000,000 packets Paddy 72,000 Quintals Vegetables 5,000 Quintals Win‐Chi‐Win 70,000 Litres 17
Slide 19: Working Capital Cycle: Increasing Inventory for Higher Sales
Working Capital Cycle: Increasing Inventory for Higher Sales Particulars (INR Mn) H1FY20 H1FY19 Revenue 1,866.7 1,507.4 Inventories 1,323.5 1,145.9 Trade Receivables 1,294 968.7 Trade Payables 108.4 246.2 Net Working Capital 2,509.1 1,868.3 * Delayed monsoon led to higher trade receivables as sales
Slide 20: Q3 & 9MFY20 At A Glance
Q3 & 9MFY20 At A Glance Particulars % Change % Change 9MFY20 9MFY19 Q3FY20 Q3FY19 (INR Mn) (YoY) (YoY) Total Revenue 2,197.4 1,786.2 23.0% 330.6 278.8 18.6% Gross Profit 1,243.3 1,013.7 22.6% 224.4 197.4 ‐4.1% Gross Margin (%) 56.6% 56.9% 67.9% 70.8% EBITDA 479.5 384.5 24.7% 57.0 60.1 ‐5.1% EBITDA M
Slide 21: Appendix
Nath Bio Genes (India) Limited Appendix
Slide 22: Stable Balance Sheet Despite Growth
Stable Balance Sheet Despite Growth Assets (INR Mn) H1FY20 H1FY19 Liabilities (INR Mn) H1FY20 H1FY19 Fixed Assets 2,309.7 2,221.2 Share Capital 190 190 Financial Assets 49.9 49.9 Reserves & Surplus 5,275.2 4,803.4 Oth Non‐current Assets 25.7 8.6 Long‐Term Borrowings 7.1 7.3 Inventories 1,323.5 1,145
Slide 23: Supported by a Solid, Sustainable History
…Supported by a Solid, Sustainable History Nath Bio‐Genes’ P&L Statement Particulars (INR Mn) FY19 FY18 FY17 Total Revenue 2,309 1,917 1,698 Gross Profit 1,253 1,073 990 Gross Margin (%) 54.3% 56.0% 58.3% EBITDA 433 404 289 EBITDA Margin (%) 18.7% 21.1% 17.0% Depreciation 14 10 30 Finance Cost 52 10
Slide 24: In a Fast Growing Industry – Global Seed Market
..In a Fast Growing Industry – Global Seed Market.. 2023 2018 2012 2009 US$ 93 US$ 53 Billion US$ 44 Billion Billion US$ 22 Market Share Billion Rest of the World 25% USA, China France, 50% Brazil, Transgenics, MAS, GeneEditing, RNAi India, Canada Technologies might hasten the growth, faster 25% tha
Slide 25: Indian Seed Market At an Inflection Point
Indian Seed Market At an Inflection Point.. 2023 2018 2014 2009 US$ 8 US$ 3.6 Billion US$ 2 Billion Market Share Billion US$ 1 Bajra Others Billion 4% 19% Cotton 36% Wheat 5% Vegetables 17% Corn Seed Demand from China’s 130 Rice 9% US$ 9 Billion 10% million hectares of Agricultural land Seed Demand
Slide 26: Organisation Focused on R&D; Best-in-Class Infrastructure
..Through an Organisation Focused on R&D; With Best‐in‐Class Infrastructure.. High quality standards and compliance 18 Breeding and Evaluation R&D Stations in different Agro‐Climatic conditions More than 300 acres of land dedicated to Research and Development, across the nation Collaboration
Slide 27: R&D Focused Technologies to Boost Breeding
..R&D Focused Technologies to Boost Breeding.. Developing new product takes 6‐8 years: Conventional Approach Commercial Development Upto 2‐3 Upto 3‐4 years years Variety Application Development Oriented Research Upto 2‐3 Upto 1‐2 years years First Crossing Pre‐Breeding At NBIL, We are Re‐Engineering
Slide 28: R&D Beyond Compare
..R&D Beyond Compare.. o Designed for major agro – climatic conditions Cotton o High level resistance to Sucking Pests & Water Stress (Drought) o Widely adapted Heterotic Hybrid with High Yield Potential and resistance to diseases Paddy o Breeding Speciality: Open Pollinated Varieties (OPV) o Qualit
Slide 29: R&D Infrastructure of International Standards
..R&D Infrastructure of International Standards.. o 200 acres of R&D farm at Isarwadi, Aurangabad for major field crops: Cotton, Maize, Millets, Wheat, Oil Cotton & Other Seeds crops Field Crops o Cold Storage, Seed Increase, Innovative Breeding Experimental Studies, Administrative and Technical Sup
Slide 30: Cotton: Jewel in the Crown
Cotton: Jewel in the Crown Best range of Bt‐Cotton Hybrids in India NBL’s premium cotton hybrid seed will ensure market leadership in cotton for next 5 years Developing Seeds which meets farmers’ Needs Enhanced Drought Assured Yield in varied climatic High Resistances to Sucking Pests Re
Slide 31: Cotton: Differentiated Products to drive Market Share
Cotton: Differentiated Products to drive Market Share Zone Wise Product Performance vs Peers All India Coordinated Trials (ICAR and Min. Agriculture, New Delhi) South Irrigated Central Irrigated South Rainfed Central Rainfed Product Yield* Rank Product Yield* Rank Product Yield* Rank Product Yield*
Slide 32: Cotton Industry Outlook
Cotton Industry Outlook Domestic Cotton Industry Bt Cotton seed market is of 50 mn packets per annum and around 30% of the total seed market. India's 2018‐19 forward cotton export contract up 100% YoY In 2017‐18, India could not sign as many forward contracts since cotton availability was rest
Slide 33: Paddy: Focus on Hybrids – Exceeding the Yield Barrier
Paddy: Focus on Hybrids – Exceeding the Yield Barrier NBIL already has significant presence in high‐yielding, disease‐resistant hybrid paddy seeds We have now come up with a new range of Super Hybrids and an exceptional collection of speciality OPV products. Growth Projection Revenue Contributio
Slide 34: Paddy: Market Leaders; Super Hybrids
Paddy: Market Leaders; Super Hybrids Gazab Super Duper Highest Yielding Medium maturity hybrid Early maturity duration (110‐ (120‐125 days). Average yield: 9‐10 115 days). Average yield: 8‐9 tons/ha tons/ha Non‐shattering and very high milling out‐turn (more than 70%) Very high grain fertili
Slide 35: Paddy: New OPVs for New Emerging Market Segments
Paddy: New OPVs for New Emerging Market Segments Shweta‐43 Khushi‐27 Very attractive medium fine grain, Much in demand, short cylinder grain type having an average of 325‐350 grains/panicle Medium maturity (125 days) & Medium Short heighted (80‐90 cm), non‐ plant height (110 cm) shattering a
Slide 36: Paddy: New OPVs for New Emerging Market Segments
Paddy: New OPVs for New Emerging Market Segments Kasturi‐09 Menka Strong aromatic and long cylinder grains, Long fine, basmati type, highly reputed for excellent cooking and eating aromatic grains; Very good quality characteristics cooking quality Fits well in rotation with Wheat, Semi dwarf (95
Slide 37: Hybrid Rice to help meet India's Food Security Mission
Hybrid Rice to help meet India’s Food Security Mission India Rice Requirement by 2020: National Food Security Mission (NFSM) 122 million tonnes ‐22 o Rice Million Tonnes o Wheat Current Rice Production: o Pulses 100 million tonnes Hybrid Rice Boost productivity levels Higher Profitability to Early &
Slide 38: Vegetables: Multiple High Value Products
Vegetables: Multiple High Value Products Multiple crops per year provide sustainable revenue stream Diversified Portfolio of high value & highly competitive products Hybrid Vegetables hold Significant Potential Higher Yield Disease and Pest Resistance Better Quality Growth Projection 9
Slide 39: Vegetables: Supplying India's Best Hybrid Products
Vegetables: Supplying India’s Best Hybrid Products High Value Products Tomato Okra Chilli o Unique high o Resistant to virus o Very good hybrid level virus with better quality vigour and profuse resistant & yield fruit branching o Highest market o Large product o Novel source of share pipeline high
Slide 40: Vegetables: Hot Favorite Hybrids
Vegetables: Hot Favorite Hybrids Priya NOH – 05 NBH – 13 NTH – 1894 NBGIH – 274 NCH – 2 39
Slide 41: Plant Nutrient Supplement: Exclusive Tie-Up for Win Chi Win
Plant Nutrient Supplement : Exclusive Tie‐Up for Win Chi Win Exclusive Tie up with a Chinese company to Round‐the‐year: High demand market Win chi Win in India Proven Performance: Visible & quantifiable gains in Vegetables, Field and Horticulture Crops & even Plantation Crops Negligible Competit
Slide 42: Revamped Marketing: Direct Reach Substantially Enhanced
Revamped Marketing: Direct Reach Substantially Enhanced 16 131 2000+ Business Centres Territories Distributors Improving Direct Increase contract Add Nath Farm Reach farmers Advisors Current direct 1,50,000 contract 400 Nath Farm retailers 7,000+ farmers Advisors 20,000+ Direct Each Ma
Slide 43: Exports: A Huge Opportunity Unfolding
Exports: A Huge Opportunity Unfolding o Exploring opportunities in countries with similar agronomical conditions Philippines & Sudan – Significant Growth Expected; Final Approvals Pending o Testing completed; Trial marketing commenced Products Being Export Export o NBL team spent significant tim
Slide 44: Improving Profitability; Strong Balance Sheet
Improving Profitability; Strong Balance Sheet Zero Long Term Debt Return Ratios Improving QIP funds used to repay full debt in Feb’18 On back of higher profitability Land Bank worth INR 200 crores Working Capital Improving To be monetised to fund future Capex requirement Inventory Days down
Slide 45: Outreach
Outreach 91D=8 a a HEAD OFFICE CORPORATE OFFICE LIAISIONING OFFICE PRODUCTION CENTRES: MARKETING CENTRES RESEARCH AND EVALUATION CENTRES: EXPORTING COUNTRIES INDIAN CAPITAL 44
Slide 46: Leadership Team
Leadership Team Mr. Nandkishor Mr. Satish Kagliwal – Mr. Devinder Khurana Mr. Madhav Dhande – Kagliwal – Chairman MD – CFO Business Lead Founder chairman of Managing Director of the CFA (US), CAIIB, he is a M.Sc. in Entomology Nath Group. He is a Post Nath Bio‐Genes (India) finance professional with
Slide 47: Historical Financials – Balance Sheet
Historical Financials – Balance Sheet Assets (INR Mn) FY19 FY18 FY17 Liabilities FY19 FY18 FY17 Fixed Assets 2,317 2,109 2,073 Share Capital 190 190 160 Financial Assets 52 61 60 Reserves & Surplus 4,885 4,502 2,873 Other Non‐current 20 Long‐Term 5 4 201 Assets Borrowings Inventories 1,554 1,235 1,3
Slide 48: Balance Sheet
Balance Sheet FY18 FY19 Total Assets Total Assets Other Current Other Current Loans & Assets, 15 Assets, 15 Advances, Loans & 1208 Advances, 1025 Cash & Bank Cash & Bank Balances, 214 Balances, 447 Fixed Assets, Fixed Assets, 5712 2109 6460 2317 Trade Trade Receivables, Receivables, 820 1080 Financi
Slide 49: Thank You
Thank You For further information, please get in touch with: Sheetal Khanduja sheetal@GoIndiaAdvisors.com M:+91 97693 64166 Radha Agarwalla radha@goIndiaAdvisors.com M:+91 8981938289 48
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