Bhagiradha Chemicals aims to triple turnover in five years to Rs 1,500 crore

In an interview with CNBC-TV18, A Arvind Kumar, the CEO & COO of Bhagiradha Chemicals and Industries, shared the company's ambitious plan to triple its revenue within the next five years.

Kumar said, “We will be looking at something like 3x kinds of current turnover. Currently, Bhagiradha has Rs 500 crore in turnover in FY23 and we would be looking to target in excess of Rs 1,500 crore in the next five years.”

Hyderabad-based Bhagiradha Chemicals manufactures agrochemicals such as pesticides.

The company also expects a significant enhancement in margins. In FY23, Bhagiradha Chemicals achieved a PAT margin of nearly 10%, and it aims to bolster this figure by an additional 3 to 4% moving forward.

To fund the growth initiatives, the company plans to issue convertible warrants of up to Rs 340 crore through preferential allotment. However, it's important to note that the company will initially receive only 25% of this amount. The remaining 75% will be disbursed after 18 months.

The funds raised from this process will be channeled into investments in its subsidiary company. Kumar said, "These funds will be utilised to fuel investments in our subsidiary, Bheema Fine Chemicals."

The company has a 34-acre facility in the Kadechur industrial area, and all the raised capital will be reinvested in our subsidiary."

The total projected investment surpasses Rs 700 crore, and Bhagiradha Chemicals anticipates a corresponding surge in the subsidiary's turnover, reaching nearly Rs 1,200 crore. This translates to approximately 1.5 to 1.7 times the initial investment.

Kumar said the company's promoters are actively participating in this expansion, contributing around Rs 15 crore through convertible warrants. This highlights a collaborative approach to growth, with institutional investors, existing shareholders, and even the company's employees showing keen interest in investing in these convertible warrants.

Shares of Bhagiradha Chemicals are stable at Rs 1,634.90. The stock has gained more than 33% over the past month.