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Meghna Rathod    


Mumbai, India

An individual with masters degree in IT. Working as an computer teacher in school from last 5 years. I am highly interested in equity market and value investing. Looking forward to learn more in this sector and enhance my knowledge.

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Contributor since: 2023

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DHARMAJ

Comments: 0 | Likes: 0 | Current Price: ₹ 308.66


Dharmaj Crop Guard Limited

A Business Analysis


About Dharmaj Crop

Incorporated in 2015, Dharmaj Crop Guard Limited is an agrochemical company. The company is engaged in the business of manufacturing, distributing, and marketing a wide range of agrochemical formulations such as insecticides, fungicides, herbicides, plant growth regulators, micro fertilizers and antibiotics to the B2C and B2B customers.

The company also provides crop protection solutions to the farmer to assist them to maximize productivity and profitability. Dharmaj Crop Guard Limited export products to more than 20 countries in Latin America, East African Countries, the Middle East and Far East Asia.

As of November 30, 2021, Dharmaj Crop Guard Limited had more than 196 institutional products that they sold to more than 600 customers based in India and the international markets. As of November 30, 2021, the company exported its products to more than 60 customers across 20 countries.

The company's manufacturing facility is located in Ahmedabad, Gujarat, India. Dharmaj Crop Guard Limited also has a research and development ("R&D") centre at the manufacturing facility.

Company's Journey So Far

Business Overview

The company is an agrochemical company engaged in the business of manufacturing, distributing, and marketing of a wide range of agro chemical formulations such as insecticides, fungicides, herbicides, plant growth regulator, micro fertilizers and antibiotic to the B2C and B2B customers. The company also engage in the marketing and distribution of agrochemical products under brands in-licensed by them, owned by them and through generic brands, to Indian farmers through their distribution network. The company is provide crop protection solutions to the farmer to assist them to maximize productivity and profitability. The company export their products to more than 25 countries in Latin America, East African Countries, Middle East and Far East Asia. The company sell their agrochemical products in granules, powder and liquid forms their customers. Additionally, company manufacture and sell general insect and pest control chemicals for Public Health and Animal Health protection.  

With an aim to offer a wide product portfolio across the agri-value chain, continue to expand their product portfolio by introducing new products. The company manufacture and sell various formulations of insecticides, fungicide and herbicides, plant growth regulators, micro fertilizers and antibiotics. As on the date of this Red Herring Prospectus, company have obtained 464 registrations for agrochemical formulations from the CIB&RC, out of which 269 agrochemical formulations are for sale in India as well as for export and 195 agrochemical formulations are exclusively for exports. Additionally, company have also applied for registrations of 18 agrochemical formulations and 17 agrochemical technicals from the CIB&RC, which are pending at various stages.  The company have 157 trademark registrations including their branded products. Company formulations are sold as branded products to customers. As of September 30, 2022, had over 118 branded formulations that are sold to farmers. Company sell bulk products to their institutional customers domestically and in the international markets. Further, as of September 30, 2022, Company had more than 154 institutional products that company sold to more than 600 customers based in India and in the international markets. As of September 30, 2022, The company exported the products to more than 66 customers across 25 countries.

Company classify their product portfolio under the following categories:

Insecticides: The company manufacture a wide range of insecticides to suit the requirement of farmers in preventing and curating different crops from being damaged by insects. company develop effective, safe, and sustainable range of insecticides to help farmers and prevent the crops from damage. Certain of their top branded insecticides products are Padgham, Lubrio, Nilaayan, Dahaad, Prudhar and Remora amongst others.  

Fungicides: The company is manufacture a wide range of fungicides that protect the crop from the diseases caused by pathogenic organisms. Fungicide is a specific type of pesticide that is responsible for controlling fungal diseases by inhibiting the fungal growth and killing the fungus. Certain of our top branded fungicides products are Gagandip, Sajaag, Lokraj, Rishmat and Kaviraj amongst others.

Herbicides: Herbicides effectively eliminate weeds and thus reduce mechanical and manual weeding. It also prevents soil erosion and the wastage of resources, ensuring optimum consumption of the resources by the desired plants. Certain of their top branded herbicides products are Dharozar, Aatmaj, Rodular, Dharolik, Kohha, Kawayat Super and Sadavirum amongst others. 

Plant growth regulator: The company also manufacture plant growth regulator which are also known as plant hormones and helps in increasing the crop yield and improving its quality. Certain of our top branded plant growth regulator products are Rujuta, Greenoka, and Stabilizer amongst others.

Micro Fertilizers: In order to increase the production of crops and to make the soil more fertile, the company manufacture micro fertilizers such as sulphur, zinc, boron and ferrous. Micro fertilizers are required for crops to reap the maximum yield from crops. Under this category we sell branded products such as Zeekasulf, Aakuko, Thandaj and Zusta amongst others. 

Antibiotic: Antibiotic is a major tool to treat the bacterial issues of plants and tree fruits. Antibiotic boost and develop immune system of plants. Under this category company sell brand product namely Retardo.

Wide range of branded products

Business Operation

The company is manufacturing facility is located at Kerala, Taluka Bavla, Ahmedabad, India. As of November 30, 2021, aggregate installed capacity of their manufacturing facility for agro-chemical formulations was 25,500 MT. The Company manufactured 7,577.21 MT of agrochemical formulations in Fiscal 2021. The company is manufacturing facility are equipped with modern plant and machinery capable of producing quality agrochemical products and have received quality control certifications such as ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 for development and manufacturing of agrochemical formulations such as insecticides, herbicides, fungicides, micro fertilizers and plant growth regulators. Company  have installed a soil bio reactor at their manufacturing facility which is used to treat waste/ sewage water and to remove pollutants. Company have also installed solar power panels at their manufacturing facility to generate green power in order to optimally use the electricity which is sourced from third party during the manufacturing process. The aggregate capacity of our installed solar power panels is 85,320 KW per annum which caters to their electricity requirements at their manufacturing facility and helps us to reduce their dependency on third party electricity requirements. 

As a part of their expansion plans and in order to achieve backward integration for their operations, the company have also acquired around 33,489.73 sq. mtrs of land at Saykha Industrial Estate, Bharuch, Gujarat, India on leasehold basis for 99 years from GIDC to set up a manufacturing facility for Agrochemical Technicals and its intermediates which will be used for internal consumption as well as for sales in domestic and international market. The company have already obtained registrations of 6 agrochemical technicals and have applied for registration of 17 agrochemical technicals from the CIB&RC, which will be manufactured in this new manufacturing facility. The company have also obtained certain regulatory approvals such as environment clearance for their new manufacturing facility. Pursuant to the setup of this manufacturing facility, their profit margins on their products would resultantly increase due to backward integration. For further details, see “Key Strategies – Enhance our manufacturing capabilities by introducing backward integration and expand their product portfolio.

The Company's Strengths

Diversified portfolio of our products and consistent focus on quality and innovation

The company have developed a niche portfolio of agro-chemical products. Company have diversified their product portfolio since incorporation and have grown into a multi-product manufacturer of agrochemical products such as insecticides, fungicides, herbicides, plant growth regulator, micro fertilizers and antibiotic. This diversification across products and categories has allowed the, to de-risk our business operations.  Additionally, company manufacture and sell general insect and pest control chemicals for Public Health and Animal Health protection. Company provide crop protection solutions to the farmer to maximize productivity and profitability. As on the date of this Red Herring Prospectus, the company have obtained registrations from the CIB&RC to manufacture 464 agrochemical formulations out of which 269 agrochemical formulations are for sale in India as well as for exports and 195 agrochemical formulations are exclusively for exports. The company have also obtained registration of from the CIB&RC for 6 agrochemical technicals for manufacturing and sales in India as well as for export. Company have 157 trademark registrations including their brand products. Company's agrochemical formulations are sold as branded products to framers through their distribution network. As of September 30, 2022, company had over 118 branded formulations that are sold to farmers.   Company is continued engagement with the dealers and wide reach to the farmers has helped them to understand the specific product requirements of end customers thereby enabling them to identify new product opportunities from time to time. This along with their objective of being present across the agri-value chain and meet the growing needs of farmers has enabled them to widen their product portfolio which has also helped us to de-risk their revenues.  

Strong R&D capabilities with focus on innovation and sustainability. 

The company have a research and development (“R&D”) centre at their manufacturing facility. Company also have a quality control laboratory at their manufacturing facility, which primarily monitors the quality of their raw materials and finished goods. Further, company's quality control laboratory has received certificate of accreditation from National Accreditation Board for Testing and Calibration Laboratories (“NABL”) which has assessed and accredited in accordance with the standard. The company have been able to diversify their products range mainly due to their technological capabilities. Company is rely on their R&D team, which helps them to manufacture products more efficiently and to cater the demand of the overseas customers across agro industry. As at September 30, 2022, employed 9 researchers including personnel who had obtained masters degree in chemistry and specialize in process research and complex chemistries.  

The company's analytical capabilities include critical quality control measures, stability studies, method validation and method development. Company R&D efforts also focus on determining the optimal production process for the products that company manufacture and the reduction of energy consumption. Company's strong R&D capabilities allow them to discover new mixtures and register new formulations for their agrochemical business. New research areas are guided by the advancement of new technologies based on customer need, technology and regulatory requirements. 

Established distribution network with strong branded products and stable relationship with our institutional customers 

The company ability to deliver sufficient quantities of agro chemical products to farmers with short lead-time is critical, particularly given the seasonal nature of cropping. The company have a pan-India sales and dealer presence in 17 states with a dedicated sales force that provides customer service and undertakes product promotion. As of September 30, 2022, network comprised over 4,362 dealers having access to 16 stock depots supporting the distribution of their branded products in 17 states of India. As of September 30, 2022, company exported their products to approximately 66 customers across 25 countries. As of September 30, 2022, company had a sales team of 195 employees, who are responsible for managing institutional sales and branded sales, the distribution channel and product promotion at the farmer level. 

Track record of strong operational and financial performance. 

Segmental Revenue

Strong R&D Capabilities

Distribution Network

Client Portfolio

Strong institutional customer base including crop protection product manufacturing companies

Industry Analysis

----------------

 

Key Strength

  • Enhance our manufacturing capabilities through backward integration and expand our product portfolio 
  • Targeting new customers, expanding existing customer business and increase our market share in domestic and international markets
  • Expanding our Public Health and Animal Health product segment
  • Strengthening up our business through effective branding, promotional and digital activities 

Management Of The Company

Shareholding Pattern

Financial Performance

Profit and Loss

Balance Sheet

Cash Flow

Profitability Ratio

 

Disclosure:

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure:

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure:

Disclaimer - Not an recommendation as it is knowledge purpose only. Source - Company's RHP, website, investor presentation and StocX.in

Disclosure legality:

I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.

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