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Sharda Cropchem Ltd.

BSE: 538666 Sector: Industrials
NSE: SHARDACROP ISIN Code: INE221J01015
BSE LIVE 15:40 | 17 Aug 447.70 10.45
(2.39%)
OPEN

435.90

HIGH

450.00

LOW

434.25

NSE 15:44 | 17 Aug 446.00 10.00
(2.29%)
OPEN

432.15

HIGH

448.85

LOW

431.65

OPEN 435.90
PREVIOUS CLOSE 437.25
VOLUME 2607
52-Week high 567.80
52-Week low 351.00
P/E 21.35
Mkt Cap.(Rs cr) 4,039
Buy Price 0.00
Buy Qty 0.00
Sell Price 447.70
Sell Qty 36.00
OPEN 435.90
CLOSE 437.25
VOLUME 2607
52-Week high 567.80
52-Week low 351.00
P/E 21.35
Mkt Cap.(Rs cr) 4,039
Buy Price 0.00
Buy Qty 0.00
Sell Price 447.70
Sell Qty 36.00

Sharda Cropchem Ltd. (SHARDACROP) - Chairman Speech

Company chairman speech

DEAR SHAREHOLDERS

FY2016 ended on a great note for Sharda Cropchem as we successfully delivered on ourfar-reaching strategy of improving sales in key markets and expanding our productofferings. It was a year of rewarding moments and challenges.

Improved sales volume in key markets and a stable exchange rate in a favourable demandenvironment aided growth during the year under review. There was strong volume growthacross regions due to expansion in our product offerings and deeper market penetration.Growth in volumes was largely driven by product registrations added in new geographiesover the last few years. A key driver of growth has been our strong organic growth inexisting markets across all products.

FY2016 in Perspective

We are a crop protection chemical company engaged in the marketing and distribution ofa wide range of formulations and generic active ingredients globally. During the year wegrew our number of registrations by 356 reaching a total of 1765 registrations as ofMarch 31 2016. We have another 818 registrations in the pipeline across geographies.Total revenue contribution of the top 10 molecules was 60.4% in FY2016 as compared to58.7% in FY2015 with the composition of top 10 molecules remaining unchanged. Our deeppipeline is a great positive for the Company. Our core competency in seeking registrationsenables us to enter new markets efficiently and overcome critical entry barriers. Furtherwith our own sales force on the ground we are able to get first hand insights into localfarming needs and competitive scenarios. This positions us well to launch relevant andneeded products in a time-bound manner.

Our Financial Performance

FY2016 saw a volume growth of 24.0% which translated into a revenue growth of 14.9% at' 1220.61 crores. EBITDA (excluding Other Income) improved by 54.6% year on year to '266.91 crores compared to ' 172.65 crores. EBITDA margin (excluding forex impact) was21.9%. Our profit after tax improved by 42.3% to ' 174.97 crores. Gross margins improvedto 35.2% (up 200 bp yoy) mainly on account of increased efficiencies in procurement.Formulation sales accounted for 84% of the 84% of agrochemicals sales. As at March 312016 the Company has zero debt. Our balance sheet remains debt free with net cash of '144.85 crores. This gives Sharda Cropchem an additional advantage to grow inorganicallywithout straining the balance sheet.

Delivering Profitable Growth

Our growing Intellectual Property pipeline will continue to deliver solid growth in thefuture. Our key initiatives investments and increased penetration over the last few yearsare now bearing fruit. Over the years we have invested in preparing dossiers and seekingregistrations. We intend to leverage our existing dossiers to develop new formulations.Our success is underpinned by our strong presence in multiple geographies. We willcontinue to identify generic molecules going off-patent and focus on seeking registrationsto increase our portfolio across Europe NAFTA Latin America and Rest of the World.

Our investment in product registrations and our proven ability to secure raw materialsbodes well for our future growth. Since the benefits of these are now accruing theperformance should look up over the next 2-3 years barring any external challenges suchas exchange rate volatility adverse weather conditions and / or global economic downturn.

Moving Ahead

We will continue to invest in registrations of agrochemical products globally. As weprogress we would always be looking to further leverage our portfolio and presence todeliver growth and improve EBITDA. This will entail a number of initiatives to obtaingreater operating leverage across our commercial and global operations which will becentral to the delivery of greater shareholder returns in the coming years. We will alsopursue opportunities for expanding our portfolio in the future. Further our asset lightmodel with a focus on building product registrations zero investment in manufacturingassets and a debt-free balance sheet will help us command better valuations.

I am confident that this approach will further enable us deliver profitable growth inthe future and make us more agile and resilient to the inevitable challenges andvolatilities within our markets.

Once again I would like to express my special thanks and deep appreciation to all ourcustomers business partners and employees for their whole-hearted contribution anddedication in working towards the Company's goals.

I would also like to express my deep appreciation to our shareholders for all theirsupport without which none of what we have been able to do would have been achieved.

R. V. Bubna

Chairman & Managing Director