Budget 2024- PLI scheme for Agrochemicals amongst industry’s Wishlist said Rajesh Aggarwal of Insecticide India

The Agrochemical industry facing significant challenges during first half posed by higher priced inventories, vagaries of the weather conditions is hoping for a rebound. Rajesh Aggarwal, Managing Director of Insecticides India said that the domestic demand scenarios is reasonable. The Kharif crop has been good, the yields are decent. The Rabi season also remains favorable though some impact cyclone may be felt and paddy crop  may see some impact. But overall the domestic demand scenario is reasonably decent. 

Since domestic demand prospects remain reasonable Insecticides India will benefit from its high exposure to the domestic market. Most of the Asian markets and Africa are better placed compared to developed countries and exporters to those regions may continue to feel the heat.

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The growth for Insecticides India is expected to remain in double digit. Insecticides India will benefit from almost 8 product launches in the year and many earlier launches undertaken during the covid times, said Aggarwal. The  strategy of Insecticides India has changed and product launch happens as soon as the product registration takes place.

Insecticides India had remained proactive and had been absorbing the impact of higher cost inventories and bearing mark to market losses  since Q4 of FY23 . In this context with the worst may be behind and Insecticides India is again well placed to see earnings growth moving forward.

Insecticide India while saw Earnings before interest tax depreciation and amortisation grow 0.53% during first half, Its net profit had declined 1.02% during first half. 

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On expansions, Aggarwal said that the Dahej expansion in Gujarat are complete and once clearances are received  commissioning of the plant will help support the Insecticide India's forward prospects. The Rajasthan Brownfield expansion has also been completed and after the capacity opening post maintenance shutdown undertaken by Insecticides India around Diwali, the benefits will be reaped.

Not surprising Insecticides India share price that had dipped to lows of ₹410 in July has now rebounded well and the share is trading at ₹656 a piece.

Meanwhile as the Budget 2024 is approaching Industry is hopeful that its longstanding Wishlist of PLI  (production linked incentive) scheme for Agrochemical is also met. Aggarwal said that the PLI scheme will be helpful to provide impetus to exports as well will be positive for make in India objective.