Best Agrolife Aims For 25% Revenue Growth For Next Five Years, Says CFO

Best Agrolife Ltd. is aiming for 25–30% revenue growth for the next five years on the back of its formulation business and business-to-consumer segment, according to Chief Financial Officer Sanjeev Kharbanda.

For fiscal 2024, the agrochemical pesticide manufacturer has revenue growth guidance of 30% with an Ebitda margin of 20%, he said.

In the last fiscal, Best Agrolife delivered double-digit revenue and profit after tax growth on the back of formulation-led business, which is 55% of the pie, Kharbanda said.

The company is growing its formulation business and aims to cut down its generic technical and commoditised business gradually, the CFO said.

Best Agrolife, with a network of more than 5,000 distributors, has grown organically as well as through acquisitions, he said. The company has no plans for further acquisitions in the near future, he said.

The company offers a wide range of products, such as insecticides, herbicides, fungicides, plant growth regulators, and public health products.

The company is building capacity in terms of formulation as well as backward integration in technical product development capacity. It is going big on business-to-consumer, Kharbanda said.

Best Agrolife, with a capex of Rs 200 crore, will largely go into brownfield expansion, backward integration, and market footprint expansion, the CFO said. Funding would be done through both equity and debt, he said.

The fourth quarter was impacted as China was dumping due to high capacity underutilisation. The quarter largely depends on technicals, which is the commoditised part, according to Kharbanda. Price pressure comes into play when it comes to the commoditised part, as oversupply impacts all the agrochemical companies, he said.

The company had a fantastic first quarter and second quarter as the launch of patented products was more supportive of the kharif season, he said.

Best Agrolife is launching products for the rabi season, which, according to the CFO, will safeguard the above seasonality effect.

From FY24–25 onwards, the company will have a full bouquet offering throughout the year, which will safeguard the company from external impacts, Kharbanda said.

As the company is in its growth phase and moving towards business-to-consumer, it needs a heavy pipeline of finished goods. It is making efforts to reduce inventory days and is also targeting to reduce the overall cash conversion cycle days from 120 days to 75–80 days, he said.