This agricultural company, which has its strong presence in insecticides, herbicides, and fungicides in the Indian market, is positioning itself for a breakthrough in the sector. In this article, we will dive deep into the company’s business and look what is ahead.
About the company
NACL Industries Limited manufactures and sells agrochemicals, including technical products and formulations like insecticides, fungicides, herbicides, plant growth regulators, and nematicides. It also offers toll manufacturing for multinational firms and exports its products.
They have over 50 products covering all major crops and have a strong logistic presence and the products are sold in more than 55,000 counters. NACL has become one of the reliable contract manufacturers for major MNCs. NACL exports products to over 30 countries and has forayed into International Brand business by registering brands in South-East Asia and Africa and are in the process of expanding reach in these regions.
Price and Stock Performance
With a market capitalization of Rs 2,803 crore, the shares of NACL industries opened at Rs 128.14, down by 5 percent from its previous trading session close price of Rs 134.89. The stock is 37 percent up from the last 5 trading sessions and has hit an all-time high of Rs 141.63 and has given an impressive return of 97 percent over the last 6 months.
Recent Developments
Coromandel International plans to buy a 53 percent majority stake in NACL Industries for Rs 820 crore and also plans to acquire an additional 26 percent of equity through an open offer. A share purchase agreement has been signed amongst Coromandel International and the seller (KLR Products Ltd, K Lakshmi Raju, and Bright Town Investment Advisor Pvt Ltd). This announcement led to a positive reaction in the share prices of NACL industries.
Coromandel International plans to buy the business for two key reasons. The first reason is that NACL has a strong presence in insecticides, herbicides, and fungicides in the Indian market, which will enhance Coromandel’s position in the domestic agrochemical formulations segment. The second reason is that NACL has its footprints in many global markets which will enhance Coromandel to leverage its identity for growing its business internationally.
Financial Highlights
The company reported revenue of Rs 269.07 crore in Q3 FY25, down by 26 percent, from its Q3 FY24 revenue of Rs 366.92 crore. It has a operating loss of Rs 26.12 crore as of Q3 FY25, as compared to that of a operating profit of Rs 4.16 crore. It reported a net loss of Rs 36.23 crore in Q3 FY25 as compared to a net loss of Rs 15.9 crores in Q3 FY24.
The company is struggling to repay its debt, which can be identified by its debt-to-equity ratio of 1.39x and its poor interest coverage ratio of negative 0.01x.
Written by Satyajeet Mukherjee
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