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Staying the Course
IT IS MY PLEASURE TO PRESENT A REVIEW OF THE PERFORMANCE OF BHAGIRADHA FOR FY2024,
COVERING WHAT HAS BEEN ANOTHER YEAR OF RESILIENCE DEMONSTRATED BY THE COMPANY.
ACROSS THE WORLD, THE PAST YEAR WAS ONE OF SIGNIFICANT VOLATILITY IN MOST SECTORS OF
THE ECONOMY GEOPOLITICAL STRIFE, CHINA-US STANDOFF AND OTHER CHALLENGES FACING THE GLOBAL
ECONOMY LED TO HIGH INFLATION AND INTEREST RATES, WHICH SUBDUED GROWTH, IMPACTED CROPPING
PATTERNS AND DISRUPTED THE SUSTAINABLE AGRICULTURE TRANSITION.
A WORLD IN FLUX
There is no doubt that the challenge of our time is to get the agriculture transition
back on track and reshape the sector, while maintaining the supply of affordable
agrochemical products to meet the needs of farmers in India and around the world, duly
safeguarding food security and protecting the planet from climate change impacts.
India continued to be a bright spot on the world stage. The country's GDP recorded a
stellar 8.2% growth in FY2024. With a young population, aspirational society, rising
discretional incomes, robust startup ecosystem, and proactive government regulations, the
nation can achieve its target of a $10-trillion economy by 2030. The long-term growth
trends are truly positive.
PERFORMANCE RESILIENCE
During the year in report, the agrochemicals sector, like many other sectors,
encountered various setbacks globally. Factors such as market volatility, adverse
operating conditions and uncertainties due to erratic monsoons have undoubtedly posed
challenges to our industry. Apart from the above factors, supply deluge from China and
muted demand for exports owing to de-stocking by global manufacturers led to falling
prices and significant decline in revenues this financial year.
The company remained impacted by the external operating reality, registering a
relatively subdued performance.
On standalone basis, the company's revenue from operations stood at Rs. 406.72 crores
against Rs. 502.09 crores in the previous year. While we recalibrated the business against
the lowered revenue, the impact of fixed costs compressed our bottom-line. Our net profit
(standalone) stood at Rs. 20.30 crores during the year, vs. Rs. 46.41 crores in the
previous year, accounting for a drop of 19% in revenue and 56.25% in the net profit.
It was indeed a tough year for the company, which has been performing impressively
since FY2019. Despite facing significant challenges and underperforming against
projections, the company showcased remarkable resilience throughout the year, navigating
obstacles with steadfast determination and adaptability. I believe that the worst is
behind us and prices have stabilized, though at lower levels, raising confidence that
demand shall revive to normal levels.
SUCCESSFUL FUND RAISE THROUGH PREFERENTIAL PLACEMENT
During the year, with the approval of our esteemed shareholders, your company issued
25,61,425 convertible warrants by way of preferential placement at a price of Rs. 1,332
per warrant, including a premium amount of Rs. 1,322 for raising funds to the tune of Rs.
341.18 crores and received subscription amount of Rs. 85.30 crores in the month of
November 2023, being 25% of the aggregate warrants issue price.
The fund raise is exclusively meant for part funding the capex and working capital
requirement of the subsidiary's greenfield project in Karnataka, which is under
implementation.
TOWARDS A NEW HORIZON
The manufacturing plant of your company's wholly-owned subsidiary, Bheema Fine
Chemicals Private Limited, has commenced commercial production on March 27, 2024.
Considering the rated capacity of 9,002 MTPA of the subsidiary, which is almost thrice our
existing capacity at Ongole, significant streams of revenue and profits are likely to
accrue once the subsidiary's plant is fully implemented and operationalised. I am
confident that the envisaged capacity augmentation with an array of new products by the
subsidiary, when implemented fully, shall take your company to the big league and also
create significant value for all the stakeholders.
Despite a challenging outlook, I remain confident that Bhagiradha will be
well-positioned to deliver long-term value. We have a healthy balance sheet, a history of
solid operational performance, and a clear expansion strategy that will ensure long-term
resilience and delivery against our objectives.
On behalf of the Board of Directors,
I congratulate the leadership team in managing the company through another dynamic year
and thank all the employees for their hard work and positive contribution. I express my
deep gratitude to our esteemed shareholders who believed in our vision and stood with us
and invested in our company.
I also take this opportunity to thank our customers, suppliers, the state and central
governments, bankers, registrars and all other stakeholders who have played a critical
role in our progress.
I LOOK FORWARD TO YOUR SUPPORT AND COOPERATION AS WE MOVE TOWARDS OUR NEXT PHASE OF
GROWTH AND VALUE CREATION.
Thank you,
K. Satyanarayana Raju