GICS Industry : Chemicals l Sub Industry : Fertilizers & Agricultural Chemicals l Website : www.excelcropcare.

com

Excel Crop Care Limited

Key Stock Indicators

NSE Ticker : EXCELCROP CMP (as on 17 Feb 2011—Rs/share): 250.0 Shares outstanding (mn) : 11.0
Bloomberg Ticker : EXCC:IN 52-week range up to 17 Feb 2011 (Rs)(H/L): 332.5/137.5 Free Float (%) : 80.8
Face value / Share: 5.0 Market Cap as on 17 Feb 2011 (Rs mn): 2,751 Average daily volumes (12 months) : 40,571
Div. Yield (%): 2.5 Enterprise Value as on 17 Feb 2011 (Rs mn): 4,062 Beta (2 year) : 1.3
Div. Yield (%): 0.0

Incorporated in 1964, Excel Crop Care Ltd (ECCL) manufactures crop protection chemicals like
insecticides, weedicides, fungicides, fumigants, and rodenticides. It has presence across the Key Financial Indicators
agricultural value chain. Its product range includes bio-products, bio-pesticides, seed treatment, Mar-08 Mar-09 Mar-10
plant growth promoters and crop protection products. The company has three manufacturing
plants located at Bhavnagar, Silvassa and Kutch. It employees ~1,200 employees. Revenue (Rs mn) 5,390.0 7,218.1 6,444.7
EBITDA ma rgins (%) 10.3 14.3 11.5
KEY HIGHLIGHTS PAT (Rs mn) 223.7 340.9 370.5
PAT ma rgins (%) 4.2 4.7 5.7
Integrated player in crop protection segment
ECCL derives revenues from different streams like insecticides, weedicides (herbicides), fungicides, Gea ring (x) 1.0 1.0 0.8
fumigants and rodenticides. The company derived ~59% of its revenue for FY10 from insecticides, EPS (Rs /s ha re) 20.3 31.0 33.7
~24% from weedicides and ~17% was contributed by fungicides and other products. It’s key PE (x) 4.8 2.2 7.4
products include endosulfan, glyphosate, chlorpyriphos, aluminum phosphide, and zinc phosphide.
Endosulfan is its largest selling product accounting for ~ 35% of its revenue for FY10. The company
P/BV (x) 0.9 0.5 1.5
has also initiated advice program for farmers on integrated pest management and crop- RoCE (%) 17.5 35.4 20.3
management. RoE (%) 19.6 25.0 22.6
EV/EBITDA (x) 3.8 2.0 5.5
Strong distribution network
n.m. : Not meaningful
ECCL has distribution network of ~40,000 dealers who make its products available in over 80% of
the India’s agricultural market. Also in the recent past the company has expanded its presence
beyond the traditional and large agro-chemical consuming areas, such as Andhra Pradesh, Punjab, Shareholding (As on December 31, 2010)
Haryana and Maharashtra to non-traditional areas such as Assam, West Bengal, Uttar Pradesh, Promoter FII
Madhya Pradesh and Rajastan. ECCL has also tied up with multinational corporations such as 19% DII
3%
Sumitomo Chemicals India Pvt. Ltd., BASF India Ltd., Bayer crop science Ltd. and Dow chemicals 12%
International Pvt. Ltd. to market their complementary products through its distribution channel.

Growing Exports
ECCL’s exports have registered a growth of ~15% CAGR between FY06-10. Contribution of exports
to the total revenue has grown from 29% in FY06 to 33% in FY10. ECCL exports its products to Latin
America, Africa and neighboring countries like Sri Lanka, Bangladesh, and Pakistan. Its key export
markets are Brazil and Argentina where company has tie ups with local companies to market its
products.

KEY RISKS Others

66%
• Product concentration risk, as single product (Endosulfan) contributing ~35% of FY10
Indexed price chart
revenue
• Environmental regulations by government (index) ('000)
250 700
• Dependency upon rainfall 600
200
500
Stock Performances vis-à-vis market
150 400
Returns (%) 300
100
YTD 1-m 3-m 12-m 200
50
EXCELCROP 21 -6 -9 71 100
NI FTY 5 -2 -8 13 0 0
Feb-10

Apr-10

Jun-10

Jul-10
Aug-10

Sep-10

Oct-10

Nov-10
Dec-10
Mar-10

May-10

Jan-11

Note: Volumes (RHS) EXCELCROP NIFTY

1) YTD returns are since April 1, 2010 to Feb 17, 2011.
2) 1-m, 3-m and 12-m returns are up to Feb 17, 2011.

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 Excel Crop Care Limited
BACKGROUND

ECCL is engaged in the business of agrochemicals comprising insecticides, weedicides (herbicides), fungicides, fumigants and rodenticides. The company's product basket
includes soil enricher, bio-pesticides and plant growth promoters. It has also developed a seeds business.. ECCL is one of the largest sellers of endosulfan (an organo-
chlorine insecticide) in India and derives around one third of its revenues from this product. However ECCL is gradually reducing its reliance on endosulfan (because it is
banned in many countries because of its alleged harmful effects on human beings), by increasing sales of its other products. Share of endosulfan product to the total
revenue has declined to nearly 35% in FY10 from over 40% in FY07.

COMPETITIVE POSITION

Peer Comparison
Excel Crop Care EID Parry (India) ClariantChemicals
Ltd Ltd BASF India Ltd (India) Ltd
Mar-10 Mar-10 Mar-10 Dec-09
Revenue (Rs mn) 6,444.7 76,095.6 16,290.9 9,532.2
EBITDA ma rgins (%) 11.5 13.0 10.7 21.2
PAT (Rs mn) 370.5 5,636.9 960.7 1,076.1
PAT ma rgins (%) 5.7 7.4 5.9 11.3
Gea ring (x) 0.8 1.2 - -
EPS (Rs /s ha re) 33.7 65.3 23.6 40.4
PE (x) 7.4 3.2 21.2 17.5
P/BV (x) 1.5 0.7 2.4 5.5
RoCE (%) 20.3 19.0 25.0 48.7
RoE (%) 22.6 24.1 15.9 32.6
EV/EBITDA (x) 5.5 3.8 10.7 9.2
n.m: Not meaningful

FINANCIAL PROFILE Key Financial Indicators

Irregular monsoon decreased top line and margins; PAT however improved Units Mar-08 Mar-09 Mar-10
Revenue Rs mi ll ion 5,390.0 7,218.1 6,444.7
ECCL’s revenues declined ~11.5% y-o-y from Rs. 7.2 bn in FY09 to Rs. 6.4 bn in FY10.
This decline in its revenue for FY10, was mainly on account of decline in input prices EBITDA ma rgins Per cent 10.3 14.3 11.5
in the domestic markets which the company had to pass on to the end consumers. PAT Rs mi ll ion 223.7 340.9 370.5
This also impacted company’s export revenues during FY10.
PAT ma rgins Per cent 4.2 4.7 5.7
EBITDA margins decreased by 280 basis points due to temporary blips caused by Revenue growth Per cent 23.1 33.9 -10.7
deficient rain fall which resulted in excess supply thus putting pressure on margins.
EBITDA growth Per cent 20.8 85.4 -28.1
PAT however improved from Rs. 340.9 mn in FY09 to Rs. 370.5 mn in FY10, due to PAT growth Per cent 16.3 52.4 8.7
~40% decline in interest cost.
Gea ring Times 1.0 1.0 0.8
RoCE Per cent 17.5 35.4 20.3
RoE Per cent 19.6 25.0 22.6

INDUSTRY PROFILE

Pesticides

The pesticides industry comprises two basic product segments - technical and formulations. The technical segment forms the basis of formulations, which are
manufactured via the batch-mixing process to develop palatable dosage forms. In 2008-09, total pesticide consumption stood at 43.9 thousand metric tonnes (TMT;
technical grade) vis-à-vis production of 85.3 TMT.
Exports are expected to drive production, with domestic demand likely to remain moderate over the medium term. Further, the government`s decision to recognise
product patents limits the growth of domestic players to an extent. However, it provides multinational innovator companies greater competitive advantage and pricing
flexibility. Despite the seasonal nature of demand, players have maintained operating margins at 10-15 per cent over the last 5 years, backed by high-value product
offerings.

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Excel Crop Care Limited
ANNUAL RESULTS

Income Statement Balance sheet

(Rs million ) Mar-08 Mar-09 Mar-10 (Rs million ) Mar-08 Mar-09 Mar-10
Net Sales 5,237.9 7,005.7 6,239.0 Equity share capital 55.0 55.0 55.0
Operating Income 5,390.0 7,218.1 6,444.7 Reserves and surplus 1,167.5 1,449.7 1,725.1
Tangible net worth 1,222.5 1,504.7 1,780.1
EBITDA 555.7 1,030.4 741.1 Deferred tax liablity:|asset| 123.7 137.4 137.6
EBITDA Margin 10.3 14.3 11.5 Long-term debt 17.6 20.6 11.3
Short-term-debt 1,224.0 1,459.2 1,444.6
Depreciation 82.9 93.1 98.6 Total debt 1,241.7 1,479.7 1,455.9
Interest 85.6 474.4 88.3 Current liabilities 1,015.5 1,096.3 1,327.7
Other Income -5.6 -5.3 4.1 Total provisions 107.9 171.2 194.6
Total liabilities 3,711.3 4,389.3 4,895.9
PBT 351.7 535.5 569.6 Gross block 1,364.7 1,555.9 1,704.7
PAT 223.7 340.9 370.5 Net fixed assets 894.9 1,018.2 1,096.5
Investments 52.8 34.7 25.7
PAT Margin 4.2 4.7 5.7 Current assets 2,763.5 3,336.5 3,773.7
Receivables 1,115.3 1,318.9 1,631.9
No. of shares (Mn No.) 11.0 11.0 11.0 Inventories 966.0 1,327.1 1,456.2
Cash 192.9 163.5 145.3
Earnings per share (EPS) 20.3 31.0 33.7 Total assets 3,711.2 4,389.4 4,895.9

Cash flow Ratio

(Rs million ) Mar-08 Mar-09 Mar-10 Mar-08 Mar-09 Mar-10
Pre-tax profit 381.6 457.6 558.3 Revenue growth (%) 23.1 33.9 -10.7
Total tax paid -134.4 -180.8 -198.9 EBITDA growth(%) 20.8 85.4 -28.1
Depreciation 82.9 93.1 98.6 PAT growth(%) 16.3 52.4 8.7
Change in working capital -309.5 -458.3 -200.7
EBITDA margins(%) 10.3 14.3 11.5
Cash flow from operating activities 20.6 -88.4 257.3 Tax rate (%) 38.2 33.9 34.9
Capital Expenditure -181.1 -214.9 -182.7 PAT margins (%) 4.2 4.7 5.7
Investments and others 15.8 18.2 9.0
Dividend payout (%) 24.6 16.1 18.6
Dividend per share (Rs) 5.0 5.0 6.3
Cash flow from investing activities -165.3 -196.7 -173.7 BV (Rs) 109.6 135.1 161.5
Equity raised/(repaid) 0.0 0.0 0.0 Return on Equity (%) 19.6 25.0 22.6
Debt raised/(repaid) 253.7 238.1 -23.9 Return on capital employed (%) 17.5 35.4 20.3
Dividend (incl. tax) -64.4 -64.4 -80.2
Others (incl extraordinaries) -27.1 82.1 2.2 Gearing (x) 1.0 1.0 0.8
Interest coverage (x) 6.5 2.2 8.4
Debt/EBITDA (x) 2.2 1.4 2.0
Cash flow from financing activities 162.2 255.8 -101.9
Change in cash position 17.5 -29.3 -18.3 Asset turnover (x) 4.2 4.9 4.0
Opening cash 175.4 192.9 163.5 Current ratio (x) 1.2 1.2 1.3
Closing cash 192.9 163.5 145.3 Gross current assets (days) 187 169 214
n.m : Not meaningful;

QUARTERLY RESULTS

Profit and loss account

(Rs million) Dec-10 % of Rev Dec-09 % of Rev Sep-10 % of Rev Dec-10 % of Rev Dec-09 % of Rev
No of Months 3 3 3 9 9
Revenue 1,514.0 100.0 1,378.1 100.0 2,305.7 100.0 5,855.5 100.0 4,909.3 100.0
EBITDA 148.8 9.8 130.0 9.4 333.0 14.4 787.0 13.4 609.6 12.4
Interes t 17.1 1.1 19.0 1.4 16.5 0.7 57.0 1.0 67.7 1.4
Depreci a tion 23.9 1.6 20.5 1.5 24.6 1.1 73.1 1.2 65.5 1.3
PBT 107.8 7.1 90.5 6.6 291.9 12.7 656.8 11.2 476.5 9.7
PAT 74.8 4.9 58.6 4.3 207.5 9.0 458.3 7.8 310.7 6.3

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Excel Crop Care Limited
FOCUS CHARTS & TABLES

Rs mn Quarterly sales & y-o-y growth Per cent Rs mn Quarterly PAT & y-o-y growth Per cent
3,000 100 250 500
200 400
80
2,500 300
60 150
200
2,000
40 100 100
1,500 20 50 0
0 -100
1,000 0
-200
-20 -50
500 -300
-40 -100 -400
0 -60

Jun-08

Sep-08

Dec-08

Jun-09
Sep-09

Dec-09

Jun-10

Sep-10

Dec-10
Mar-08

Mar-09

Mar-10
Jun-08
Sep-08
Dec-08

Jun-09
Sep-09
Dec-09

Jun-10
Sep-10
Dec-10
Mar-08

Mar-09

Mar-10
Sales Sales growth y-o-y (RHS) Net Profit Net profit growth y-o-y (RHS)

Rs/share EPS Per cent Movement in operating and net margins

20 20

15 15

10 10
5
5
0
0
-5
-5
Jun-08

Sep-08

Dec-08

Jun-09

Sep-09

Dec-09

Jun-10

Sep-10

Dec-10
-10
Mar-08

Mar-09

Mar-10
Jun-08

Sep-08

Dec-08

Jun-09

Sep-09

Dec-09

Jun-10

Sep-10

Dec-10
Mar-08

Mar-09

Mar-10

OPM NPM

Shareholding Pattern (Per cent) Board of Directors

Mar 2010 Jun 2010 Sep 2010 Dec 2010 Director Name Designation
Promoter 19.3 19.2 19.3 19.3 As hwi n Cha mpra j Shroff (Mr.) Non-Executive Cha i rma n, Promoter-
FII 1.3 7.0 4.1 3.1 Director
DII 12.5 10.7 10.1 12.0 Dipes h Ka nti s en Shroff (Mr.) Ma na gi ng Di rector, Promoter-Di rector
Others 66.9 63.1 66.5 65.7 Mukul Govi ndji As her (Dr.) Non-Executive Di rector
Bhupendra na th Vidya na th Non-Executive Di rector
Bha rga va (Mr.)
Deepa k Vija ys inh Bhima ni (Mr.) Non-Executive Di rector
Vina ya k Ba ji bha i Buch (Mr.) Non-Executive Di rector
Nina d Dwa rka na th Gupte (Mr.) Non-Executive Di rector
Sa ndeep Hemendra Junna rka r Non-Executive Di rector
(Mr.)
Kevin Leona rd Ma rtin (Mr.) Director
Ja gdis h Ra ma nl a l Na i k (Mr.) Director
Sha ra d La l l ubha i Pa tel (Mr.) Non-Executive Di rector
Pra ka s h Kes ha vji Shroff (Mr.) Director

Additional Disclosure
This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).

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CRISIL COMPANY REPORT | 4