BASF India Limited: history, ownership, mission, how it works & makes money

A Brief History of BASF India Limited

BASF India Limited, a subsidiary of the German chemical giant BASF SE, was incorporated in 1943. Originally known as The Bayer Company Limited, it changed its name to BASF India Limited in 2000. The company has its headquarters in Mumbai and is one of the leading chemical producers in India.

In the early years, BASF India primarily focused on producing chemicals for the agricultural and pharmaceuticals sectors. By the 1960s, the company expanded its operations and product lines to include a variety of chemicals, including polymers and performance products. The company's growth in the Indian market was spurred by its commitment to innovation and sustainable development.

In 1994, BASF India became a public limited company, which enabled it to raise funds for expansion. As of December 2022, BASF India’s annual revenue reached approximately INR 12,800 crore, marking a significant increase from INR 10,800 crore in 2021. The company has consistently focused on improving operational efficiency and expanding its product portfolio.

Over the years, BASF India has made substantial investments in research and development. By 2023, BASF India reportedly invested around INR 300 crore annually in R&D to foster innovation and enhance its competitive edge in the market.

In terms of product offerings, BASF India manufactures a diverse range of chemicals. As of 2023, the product categories include:

• Agrochemicals
• Performance Products
• Functional Materials and Solutions
• Industrial Solutions
• Surface Technologies
• Care Chemicals
• Nutrition and Health

Below is a table summarizing the financial performance of BASF India Limited over the past five years:

BASF India Limited has also been active in expanding its manufacturing capabilities. In 2021, the company inaugurated a new production facility in Dahej, Gujarat, which is projected to enhance its capacity to produce specialty chemicals, catering to a growing demand in various sectors.

Additionally, BASF India has engaged in several sustainability initiatives. By 2023, the company has committed to reducing its greenhouse gas emissions by 30% by 2025 compared to 2020 levels. This commitment aligns with BASF SE's global sustainability goals, demonstrating the company's focus on responsible chemical production.

As part of its expansion strategy, BASF India has explored mergers and acquisitions. In 2022, the company successfully acquired a local specialty chemicals firm, enhancing its product offerings and market presence in India.

Overall, BASF India Limited has established itself as a prominent player in the Indian chemicals market through strategic growth initiatives, innovation, and sustainability practices, ensuring a strong competitive position within the industry.

A Who Owns BASF India Limited

BASF India Limited, a subsidiary of BASF SE, operates as a leading chemical manufacturer in India. The ownership structure of BASF India provides insight into its governance and operational influence.

The major shareholder of BASF India Limited is BASF SE, headquartered in Ludwigshafen, Germany. As of the latest financial reports, BASF SE holds a significant stake in BASF India Limited, approximately 75%. The remaining shares are publicly traded on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India.

The distribution of shares can also be seen in the table below:

As of March 2023, the market capitalization of BASF India Limited stood at approximately ₹ 9,000 Crore. This valuation reflects the company's strong market position and its integral role within the global operations of BASF SE.

In terms of operational revenue, BASF India reported a revenue of ₹ 5,200 Crore for the fiscal year ending December 2022, showcasing consistent growth driven by demand in agriculture and specialty chemicals.

The company employs about 1,700 individuals across various functions, underlining its commitment to local job creation and economic development.

In the financial year 2022, BASF India Limited's net profit was recorded at ₹ 522 Crore, reflecting a 12% increase from the previous fiscal year, enhancing its profitability and operational efficiency.

The board of directors comprises key personnel from BASF SE and prominent figures from the Indian industry, ensuring a blend of global expertise and local insight.

As of the latest available data, the foreign institutional investors (FIIs) and domestic institutional investors (DIIs) combined hold approximately 20% of the publicly traded shares, indicative of institutional interest in the company’s growth trajectory.

Overall, BASF India Limited's ownership profile highlights the strong backing from its parent company, BASF SE, while offering opportunities for public investment. The strategic decisions made at the board level are expected to continue aligning with global best practices and local market needs.

BASF India Limited Mission Statement

BASF India Limited, a subsidiary of the global chemical company BASF SE, operates with a mission to create chemistry for a sustainable future. This mission underscores their commitment to innovation, sustainability, and collaboration with customers to develop products that meet market needs while reducing environmental impact.

The company emphasizes four core aspects in their mission:

• Innovative solutions that enhance quality of life.
• Responsible management of resources for sustainable development.
• Partnership with stakeholders to achieve mutual growth.
• Continuous improvement in operational efficiency.

As of the fiscal year ending December 31, 2022, BASF India reported total sales of ₹6,835 crores, with a significant year-on-year growth of 20%. The EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) margin stood at 14%.

The company continues to focus on digital transformation to improve its production processes and customer engagement. In line with its sustainability goals, BASF India aims to achieve climate neutrality in its production processes by 2030.

Further reinforcing its mission, BASF India has been investing in research and development, allocating approximately 6% of its annual sales to R&D activities, ensuring it remains at the forefront of technological advancements in the chemical industry.

In 2022, BASF India also focused on reducing greenhouse gas emissions by 25% from its baseline of 2010, demonstrating its commitment to sustainable practices.

These efforts not only align with the United Nations Sustainable Development Goals but also position BASF India as a leader in sustainable practices within the chemical industry in India.

How BASF India Limited Works

BASF India Limited, a subsidiary of BASF SE, operates as a leading chemical company in India, providing a wide range of products and solutions across various sectors such as agriculture, automotive, construction, and consumer goods. The company is involved in manufacturing, marketing, and distributing a variety of chemicals, including intermediates, performance products, and agricultural solutions.

In the financial year 2022, BASF India reported total revenue of ₹8,679 crores (approximately $1.1 billion), reflecting a growth of 24% compared to the previous year. The operating profit (EBIT) for the same period was ₹1,212 crores (about $150 million), with a corresponding EBIT margin of 13.9%.

As of December 2022, BASF India had a total asset base of ₹11,155 crores (around $1.4 billion). The company’s return on capital employed (ROCE) was reported at 14.4%, indicating efficient management of capital resources.

Core Business Segments

BASF India operates through several key business segments:

• Agricultural Solutions
• Performance Products
• Functional Materials & Solutions
• Industrial Solutions
• Chemicals

The Agricultural Solutions segment accounted for approximately 30% of total revenues in 2022, driven by the increasing demand for crop protection products. Performance Products contributed about 25%, while Functional Materials & Solutions made up 20%.

Production Facilities

BASF India has multiple manufacturing sites across the country, including locations in:

• Mahad, Maharashtra
• Vadodara, Gujarat
• Dahej, Gujarat

The Mahad facility produces a variety of industrial chemicals, including epoxidized soybean oil and surfactants, while the Vadodara site is focused on agrochemicals and specialty products. The Dahej location is part of BASF's investment in expanding its production capacity for various chemicals.

Workforce

The workforce of BASF India stood at approximately 3,000 employees in 2022, emphasizing the company's commitment to sustainability and innovation. The company invests significantly in employee training and development programs to enhance skill sets aligned with industry advancements.

Research and Development

BASF India maintains a robust R&D framework with significant investments aimed at innovation. The company allocated around 6.5% of its total revenue to R&D activities in 2022. Key areas of focus include:

• Development of sustainable agricultural products
• Innovative solutions for construction materials
• Technological advancements in automotive products

Financial Performance Metrics

In 2022, the dividend declared by BASF India was ₹22 per share, reflecting the company’s commitment to returning value to shareholders amidst growing profitability.

The strategic focus on sustainability has led BASF India to implement several environmental initiatives, aiming to reduce greenhouse gas emissions by 25% by 2030. This aligns with the overall mission of BASF SE to achieve carbon neutrality by 2030.

BASF India's market capitalization as of the end of 2022 was approximately ₹36,500 crores (about $4.5 billion), positioning it as one of the prominent players in the chemical sector in India.

Overall, BASF India Limited continues to leverage its extensive product portfolio, strong R&D capabilities, and strategic manufacturing footprint to enhance its competitive edge in the rapidly evolving chemical industry.

How BASF India Limited Makes Money

BASF India Limited operates within the chemicals sector, focusing on specialty chemicals, crop protection, and performance materials. The company generates revenue through various segments, with an emphasis on innovation and sustainability in its product offerings.

As of 2022, BASF India reported a revenue of approximately ₹12,929 crore (about USD 1.6 billion), reflecting a growth of 20% year-over-year from ₹10,786 crore in 2021. This increase was primarily driven by higher demand across several key markets, particularly in agricultural solutions and industrial chemicals.

Revenue Breakdown by Segment

The Agricultural Solutions segment, which includes crop protection products and seed treatments, remains a significant revenue driver for the company. BASF's continuous investment in research and development has led to innovative products that cater to the evolving agricultural needs of Indian farmers.

Market Presence and Strategic Partnerships

BASF India has established strategic partnerships with various stakeholders, enhancing its market presence. The collaboration with local companies aids in the distribution of products, increasing accessibility for consumers.

In FY 2022, BASF India reported an operating profit (EBIT) of ₹1,750 crore, showing an increase from ₹1,450 crore in FY 2021, signifying a margin improvement despite rising raw material costs.

Cost Structure and Profitability

The company's cost of goods sold (COGS) increased to ₹9,000 crore in FY 2022, affecting the overall margins. However, effective cost management strategies helped BASF India maintain a decent gross margin of approximately 30%.

The net profit for the year was reported at ₹1,200 crore, translating to a net profit margin of 9.3%. This was an improvement compared to a net profit of ₹900 crore in FY 2021, showcasing operational efficiency and cost discipline.

Investment in Sustainability

BASF India has committed to sustainable practices, which not only align with global environmental standards but also attract environmentally conscious consumers. The company's investment in sustainability initiatives is expected to positively impact its market position in the long term.

Stock Performance

As of October 2023, BASF India's stock is trading at around ₹4,500 per share. The company has shown a price increase of approximately 15% year-to-date, further highlighting investor confidence fueled by robust financial performance and growth prospects.

Future Growth Prospects

Looking ahead, BASF India plans to leverage its research capabilities to expand its portfolio in high-growth segments such as biotechnology and advanced materials. The expected surge in demand for agricultural products, driven by increasing population and food security concerns, positions the company for further growth.