Agriculture Sector

Presented By:
Nirmit Patel 07
Tanisha Sharma 46
Hinal Shah 55
Sayli Joshi 65
Dhruvi Shah 92
Divya Poojary 117
 Introduction

Agriculture is the primary source of livelihood

for about 58% of India’s population

Indian agriculture sector accounts for 18%

of India’s GDP

Inflow of FDI of about $8.57 billion

(April 2000- June 2018)

Production trends & key Investments

 United Phosphorus Ltd. (UPL)

PRODUCT
SEGEMENT
BUSINESS • They operate in GEOGRAPHIC
three segments: SEGEMNT
• Incorporated in agro chemical,
MARKET
1985 industrial • They have 23 ECOLOGICAL
ANALYSIS • It has a market chemicals & traded manufacturing ANALYSIS
capital of products sites and have
Rs.39066.58 • Herbicide, presence in 123 Lorem ipsum dolor sit
Fungicide, Plant
crore countries amet, consectetur
Growth Regulator, adipiscing elit, sed do
• Pesticides and
Soil Conditioner eiusmod tempor
agro chemicals • Pesticides incididunt ut labore et
Intermediates is dolore magna aliqua.
the highest raw
material cost and
Agro chemicals
generates the
highest revenue
 SWOT - UPL

Strength
Strong product portfolio Weakness
Deep marketing reach Competitive Market
Better quality control Higher working capital
Global manufacturing facilities

UPL

Threats
Opportunity Unfavorable change in government
Expansion into the countries like policies
brazil & Africa Climate change & draught
Lower commodity prices
 Future Prospects of UPL

• UPL’s buyout of Arysta LifeSciences will potentially throw up $5 billion in combined

revenues and $1.2-billion annual EBIDTA

• Combined entity will become the fifth largest generic agrochemicals company in the
world

• Arysta possesses expertise in speciality molecules where UPL is relatively weaker

• Integration may help as UPL is strong in manufacturing and Arysta on the marketing
side
 Future Prospects of UPL

• Arysta has reach over Brazil, Africa, the U.S. and Asia, complementing UPL’s
businesses

• Offers cost synergies using UPL’s strong manufacturing base in India and
outsourcing by Arysta

• Greater exposure to Africa, China and a few other countries which UPL lacks

• Greater economies of scale in marketing and distribution as a merged entity

 Financials of UPL

Y/E March 2014 2015 2016 2017 2018

EPS 9.70 10.81 16.47 4.83 10.76
Current 1.73 1.48 1.48 1.88 1.59
Ratio

Dividend 4 5 5 7 8
per share

Book Value 77.17 82.22 93.69 151.24 156.46

per share

ROCE 18.21 12.96 19.26 7.17 8

Debt equity
ratio
0.35 0.35 0.34 0.11 0.1
 Recommendations of UPL

• Sustained revenue growth – set to Continue

• UPL has been expanding its footprint into multiple geographies and
enhances its reach through acquiring brands that are reasonably valued
and having a payback period of 3-4 years
• The management has set an estimated revenue target of $ 4bn in the next
4 years, which if achieved, will set UPL apart from the competition in
terms of ROE and ROI
• International penetration de – risks UPL’s business model
 Recommendations of UPL

• Increased focus on per hectare productivity will increase demand for

Agrochemicals
• The world’s population is estimated to reach 11bn in 2100, posing grave
challenges for food supplies. Hence, it is crucial to increase per hectare,
productivity to meet food supply that can segment, is expected to benefit
proportionately from strong demand for agrochemical.
• Buy : At Rs.782.68
Balrampur Chini Mills Ltd.
(BCML)

• Incorporated in the year 1975

Business • It has a Market CAP of Rs.2532.24 Crore

• Sugar, molasses, alcohol, Ethanol,

Product bagasse & power
• Sugarcane has the highest raw material
segment cost & Sugar generates the highest
revenue

Geographic • It has 10 manufacturing units in UP

segment
 SWOT- BCML
STRENGTH
• Second largest sugar manufacturing company in
India
• huge range of interrelated products
• Largest capacity in India with 10 sugar factories
located in U.P
• Access to power during off‐season through
dual‐fuel power generation facility
OPPORTUNITY
• Increase in Sugar consumption around
the world
• Economic security to the farmer due to
more choices of selling his stock
• High value of by products for down
stream industries
WEAKNESS
• Price fluctuation in the Sugar
industry
• Presence only in Uttar Pradesh
• Sensitive to draught
• Based on old technology
THREAT
• Sugar industry is very volatile
• Cheap sugar imports are harming the
existing sugar mills in India
• Insecure political framework
 Major Highlights
BCML
Global sugar demand is Asia will remain the biggest
expected to increase to 192 consumer of sugar, increasing
mn tones by 2021 & 235 mn its share of total consumption
tones by 2030 compared to from around 40% to 45% by
183 mn tons in 2017 2021

By 2030, India & China will

Healthy balance sheet-Long
still remain the biggest
term Debt-equity ratio stood
consumers accounting for
at 0.05 as on September 2018
nearly 25% of global
consumption
 Future Prospects of BCML

• By early 2019, India will start exporting sugar to China

• Management believes in improvement of sugar recovery
• Revision of ethanol prices by the government
• The New distillery at Gularia will have a capacity of 160klpd and should
commence operations by end of 2019
• Increase in production of power
• Investing in the entire ecosystem

13
 Financials of BCML

Y/E March 2014 2015 2016 2017 2018

EPS 0.15 -2.36 4.09 25.20 9.68
Current Ratio 1.63 2.14 2.28 3.37 1.77

Dividend per 0.00 0.00 0.00 2.5 3.5

share
49.76 46.12 50.28 65.58 69.48
Book Value per
share

ROCE
5.27 0.93 12.73 24.18 15.51

Debt equity 1.11 1.43 1.22 1.09 0.54

ratio