India Pesticides surges 11% as arm gets nod to set-up agrochem unit in UP

Shalvis Specialities has received environmental clearance for setting up manufacturing plant of agrochemicals & intermediates, API ingredients & intermediates and fine chemicals manufacturing unit.

Shares of India Pesticides (IPL) surged 11 per cent to Rs 268.55 on the BSE in Wednesday’s intra-day trade in an otherwise subdued market after the government granted environmental clearance to the proposed project activity.

The company’s wholly-owned subsidiary i.e. Shalvis Specialities (SSL) has received environmental clearance from the Ministry of Environment, Forest and Climate Change (Impact Assessment Division) of Government of India for setting up manufacturing plant of "agrochemicals & intermediates, active pharmaceutical ingredients (API) ingredients & intermediates and fine chemicals manufacturing unit” in District Hamirpur, Uttar Pradesh.

At 10:48 AM; shares of IPL traded 9 per cent higher at Rs 264.95, as compared to 0.06 per cent decline in the S&P BSE Sensex.

IPL is engaged in the manufacturing of various types of pesticides (technical & formulations) and pharmaceutical intermediates. Pesticides contributed about 95 per cent of total sales, while pharmaceutical intermediates contributed about 5 per cent to total sales of the company in FY22. While the company markets a bouquet of formulations in the Indian market under various brands, IPL’s thrust is on the manufacturing of technical (primarily fungicide based technical). The products of IPL are well established in Indian & International markets.

However, the sales and profitability of the pesticides industry depends largely on the prevalent agro-climatic conditions in the domestic and global markets. However, to mitigate the risk IPL has diversified its sales in terms of geography. The company has presence across all major states in India and company has access to pesticides market of over 25 countries.

The pesticides industry is marked by heavy fragmentation with the absence of any player having sizeable market share. The intense competition leads to competitive pricing and lower margins. The intense competition and focus on off-patent products lead to competitive pricing and lower margins in the domestic market. However, the increasing focus of the company on an export lead growth has resulted in insulating the company against margin pressures, CARE Ratings said in its rationale.