Any current/future capex/capital investment/strategic investment?

The company is planning some fund raising for retail business, though nothing is concrete yet (Page 12). Rs. 5 crores from previous investments have been reinvested into Future Farms LLP, with about Rs. 3.75 crores specifically invested there (Page 10). Expansion plans include acquiring more land, including plans to expand into Maharashtra (Page 17). No immediate approach to big retail chains due to low margins but focus on building brand before negotiating (Page 18). Plans to open about 40 franchise retail stores post-October, contributing about 3%-5% to P&L, aiming for brand presence rather

Future growth expectations in sales/revenue/volumes?

The company targets a conservative top-line growth rate of about 25% annually (FY19 and FY20). Post organic certification (IC3) anticipated around Diwali 2018, margins and profitability are expected to increase significantly. Revenue from agricultural business per acre is expected to rise, with topline per acre around Rs. 1.75 lakhs and profit increasing from Rs. 1 lakh to Rs. 1.3 lakhs post-certification. Export potential is expected to grow aggressively after IC3 certification, opening markets in US, Europe, and Australia. Trading activities and agricultural cultivation volumes have both inc

Future growth expectations in earnings/operating earnings/profits/EPS?

The company expects a profit target of around Rs. 20 crores in FY19, possibly exceeding this, but remains conservative on guidance (Page 19). Anticipated top-line growth of about 25% in FY19 with bottom-line growth expected to exceed top-line growth, driven by increased margins post-organic certification (Page 5, 19). EBITDA margins currently at 30-40% in agriculture; expected to increase to 40-50% once IC3 organic certification is obtained (Page 19). Per acre bottom-line expected to grow from Rs. 1 lakh to Rs. 1.3 lakhs after certification, a 30% increase in profitability per acre (Page

Current/ Expected Orderbook/ Pending Orders?

Current orderbook details are not explicitly mentioned in the transcript. As of the call, the company has about 57 clients with receivables of approximately Rs. 51 crores. Major clients include Patanjali, with receivables ranging from Rs. 40,000 to Rs. 2 crores. Export market has started with trial orders worth around $30,000. After obtaining IC3 certification (expected by Diwali 2018), the company anticipates opening larger export markets including US, Europe, and Australia. Already, the company has around 60 export queries and sample orders in progress. The company is cautiously optimistic a

Any current/future new fundraising through debt or equity?

Currently, there is no definite plan for new fundraising through debt or equity. Darshak Rupani mentioned that if any Foreign Institutional Investors (FIIs) are interested and if the company needs funds, they might consider it. However, at the moment, the promoters are cash rich and prefer to fund internally if required. The company’s internal financial situation is very healthy and cash flow is positive. They do not anticipate needing external funds in the near future.

White OrganicQ1 FY19Agricultural Food & other Products

White Organic Q1 FY19 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹3.56P/E: 13.1Market Cap: ₹13 CrSector: Agricultural Food & other Products

Management growth scorecard

Revenue

Category 2

Margin

Category 1

Fundraise

N/A

Order

Yes

Capex

Yes

3 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→The company targets a conservative top-line growth rate of about 25% annually (FY19 and FY20).
→Post organic certification (IC3) anticipated around Diwali 2018, margins and profitability are expected to increase significantly.
→Revenue from agricultural business per acre is expected to rise, with topline per acre around Rs. 1.75 lakhs and profit increasing from Rs. 1 lakh to Rs. 1.3 lakhs post-certification.
→Export potential is expected to grow aggressively after IC3 certification, opening markets in US, Europe, and Australia.
→Trading activities and agricultural cultivation volumes have both increased and will continue to grow.
→The company plans to expand cultivation to 3,000 acres with focus on high-margin herbal crops.
→Retail will contribute 3-5% of revenue, mainly through franchise models targeting Tier 1 cities.
→EBITDA margins expected to improve significantly once full organic certification and licenses are achieved.

Margin guidance

Category 1

→The company expects a profit target of around Rs. 20 crores in FY19, possibly exceeding this, but remains conservative on guidance (Page 19).
→Anticipated top-line growth of about 25% in FY19 with bottom-line growth expected to exceed top-line growth, driven by increased margins post-organic certification (Page 5, 19).
→EBITDA margins currently at 30-40% in agriculture; expected to increase to 40-50% once IC3 organic certification is obtained (Page 19).
→Per acre bottom-line expected to grow from Rs. 1 lakh to Rs. 1.3 lakhs after certification, a 30% increase in profitability per acre (Page 19).
→PAT growth CAGR expected around 25% or higher for FY19 and FY20, driven by margin expansion from organic licenses and operational scale-up (Page 11, 19).
→Conservative approach on guidance aims to first deliver results before updating projections (Page 19).

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Fundraise plans

→Currently, there is no definite plan for new fundraising through debt or equity.
→Darshak Rupani mentioned that if any Foreign Institutional Investors (FIIs) are interested and if the company needs funds, they might consider it.
→However, at the moment, the promoters are cash rich and prefer to fund internally if required.
→The company’s internal financial situation is very healthy and cash flow is positive.
→They do not anticipate needing external funds in the near future.

Order book

Yes

→Current orderbook details are not explicitly mentioned in the transcript.
→As of the call, the company has about 57 clients with receivables of approximately Rs. 51 crores.
→Major clients include Patanjali, with receivables ranging from Rs. 40,000 to Rs. 2 crores.
→Export market has started with trial orders worth around $30,000.
→After obtaining IC3 certification (expected by Diwali 2018), the company anticipates opening larger export markets including US, Europe, and Australia.
→Already, the company has around 60 export queries and sample orders in progress.
→The company is cautiously optimistic about growing exports and expanding client base post-IC3 certification.

Capex plans

Yes

→The company is planning some fund raising for retail business, though nothing is concrete yet (Page 12).
→Rs. 5 crores from previous investments have been reinvested into Future Farms LLP, with about Rs. 3.75 crores specifically invested there (Page 10).
→Expansion plans include acquiring more land, including plans to expand into Maharashtra (Page 17).
→No immediate approach to big retail chains due to low margins but focus on building brand before negotiating (Page 18).
→Plans to open about 40 franchise retail stores post-October, contributing about 3%-5% to P&L, aiming for brand presence rather than full retail business (Page 11).
→Organic certification and license acquisition expected by Diwali 2018, which will enhance margins and open export markets (Page 14, Page 5).
→Capital is currently sufficient; promoters are cash rich and internal funds will support future requirements, with no urgent need for external funding (Page 17).

How does White Organic rank vs peers in Agricultural Food & other Products?

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