Breaking new ground
Dear Shareholders,
I am pleased to once again address you through our annual report and reflect on
Dharmaj's performance in FY24. As many of you are aware, the past year presented
significant challenges for the agrochemical industry. While the domestic business
experienced a delayed start to the sowing season in April and subdued rainfalls in August,
the overall season ultimately proved satisfactory.
The first half of FY24 witnessed continued challenges in exports and the active
ingredients value chain, which commenced in FY23. The industry faced ongoing issues
related to falling prices, which impacted formulation realisations, as well as continued
effects of international destocking. Although demand-related concerns subsided in the
second half, coupled with price stabilisation, we encountered a new challenge in the form
of intense pricing competition from the Chinese industry.
25%
Top line growth in a challenging year
Despite these external headwinds, I am delighted to report that Dharmaj's performance
has shone through. Our Company achieved record results in terms of both top-line and
bottom-line figures, demonstrating our resilience and adaptability in a turbulent market
environment.
Achievement of Strategic Objectives
While our record performance in a challenging year is noteworthy, it is not the most
significant achievement of the past financial year. That distinction undoubtedly belongs
to the commissioning of our Saykha active ingredients facility in January 2024. This
pivotal project marks our entry into the entire agrochemicals value chain, representing a
transformative step for our Company.
In the months following commissioning, the plant has successfully transitioned from
trial batches to commercial-scale orders and is well on its way to achieving its first
year's capacity utilisation targets. We are currently targeting a monthly production run
rate of 200 MT from the Saykha site – a remarkable feat for a greenfield facility,
especially given that it represents our first foray into this domain.
On the product portfolio front, we have commercialised a total of 8 products, including
some beyond our synthetic pyrethroids portfolio. We have achieved the desired purity
levels in almost all products, and while yields are being optimised for recently launched
products, initial products have stabilised on the yield front as well. This will continue
to be an ongoing process of refinement and improvement.
In the months following commissioning, the plant has successfully transitioned from
trial batches to commercial scale orders and is well on its way to achieving its first
year's capacity utilisation targets.
We are not only consuming technicals & intermediates captively but also witnessing
good traction in export sales, with several export orders already dispatched to markets
where we have registrations in place. For other markets, registration applications have
been submitted for many larger export destinations last year, including Brazil, the US,
and Europe. While these are medium to long-term initiatives with a considerable gestation
period, they position us well for future growth.
Overall, we are confident in our ability to scale up operations at this facility. As we
progress, we won't limit ourselves to standard molecules but are also focusing on
higher-value and better-margin molecules, some of which have already been commercialised
in Phase-I. While these won't be high-volume products initially, they will help us
optimise our overall realisations as we scale up. We plan to build on this further in
Phase-2 of product additions.
Strengthening Our Mainstay
While we are advancing on new strategic initiatives such as our entry into the Active
Ingredients business, we are simultaneously strengthening our core business: Formulations.
Within our branded formulations business vertical, we have expanded our geographical
presence by adding 4 new states in South India: Odisha, Andhra Pradesh, Karnataka, and
Telangana. This expansion not only marks our entry into South Indian markets, where we
previously had no presence, but it has also transformed us into a pan-India national
player with a presence across 24 states.
Having achieved an almost pan-India presence, with the addition of 10 markets in the
last 3 years, our focus for the coming years will be channelled into scaling up in these
new and existing markets. New stock depots have been established, and the majority of team
hiring has been completed for the new markets, with some additional hiring expected during
the season.
In the Institutional Formulations vertical, we continue to perform well, with the
strengthening of our product portfolio and clientele serving as key drivers of growth.
Apart from the small formulators category where we continue to see good traction, we
have also had some breakthroughs with large agrochemical majors. With operations now
underway at our Active Ingredients site, we will be witnessing the benefits of
cost-competitiveness in our Formulations business as well.
What's in Store for the Future?
As we move into FY25, we are positive and excited about the prospects for our Company.
The upcoming year looks promising for domestic agrochemical markets, with a favourable
rainfall forecast and expectations of a good sowing season, which bodes well for our
formulations business.
All our efforts are being channelled towards operations ramp-up at Saykha, which will
be a key determinant of performance in the coming years. While such a large-scale
investment is bound to have some teething issues and a gestation period to realise its
true potential, we are fully geared to deliver on its promise.
I would like to express my heartfelt gratitude to all our stakeholders for being part
of our growth story. I extend my thanks to our dedicated employees for their immense
commitment in building our brand. I am grateful to our customers, farmers, and
distribution network for their trust in us. And once again, I thank all our shareholders
and investors for their faith in our business model.
As we embark on a journey that promises to add more value, we seek your continued
support in building a better organisation and a better world. Our growth potential,
coupled with our expanded product portfolio and geographical presence, provides a solid
foundation for Dharmaj's future success. As we continue to innovate and adapt to market
demands, including the shift towards bio-pesticides and organic farming, we are confident
in our ability to create lasting value for our shareholders and contribute positively to
the agricultural sector.
Thank you for your unwavering support and trust in Dharmaj. Together, we look forward
to a future of sustainable growth and shared success.
| Sincerely, |
| Ramesh Talavia |
| Chairman and Managing Director |