Ladies and gentlemen, good day and welcome to the Sharda Cropchem Limited Q1 FY 2026 earnings conference call hosted by Antique Stock Broking Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manish Mahawar. Thank you, and over to you, sir.
Yeah, thank you, Anushka. On behalf of Antique Stock Broking , warm welcome to all the participants on the 1Q FY 2026 earnings call of Sharda Cropchem . We have Mr. Ramprakash Bubna, Chairman and Managing Director, Mr. Shailesh Mehendale, CFO , and Mr. Jetkin Gudhka, Company Secretary. Without any delay, I would like to hand over the floor to Mr. Bubna for opening remarks, for which we will open the floor to call Q&A. Thank you and over to Mr. Bubna.
Thank you, Manish. Ladies and gentlemen, my name is Ramprakash Bubna. Good evening and a very warm welcome to everyone present on the call. Along with me, I have Mr. Shailesh Mehendale, our CFO, Mr. Jetkin Gudhka, Company Secretary, and SGA, our investor relations advisors. Hope you all have received our investor deck by now. As you are aware, we are engaged in marketing and distribution of a wide range of agrochemical products, and that is herbicides, insecticides, fungicides, biocides, etc., catering to a diverse global customer base. We prepare comprehensive dossiers and seek registrations in our own name. We allocate substantial resources for securing registrations of our products and thus establish our foothold in the market. Our total product registrations stood at 2,981 as on 30th of June 2025. Additionally, 1,021 applications for product registrations are at the approval stage.
Coming to industry dynamics, the global agrochemical market is showing signs of recovery, driven by a revival of demand, complemented by a gradual recovery in prices. Inventories have come to normal levels across distribution channels. In Q1 FY 2026, our total revenue has grown by 25% to INR 985 crore, with overall volume growth of 13%. This performance is attributable to global revival in demand and recovery in pricing. Europe remains a major contributor to the overall growth. Volume from the agrochemical segment grew by 11%, and non-agrochemical segments grew by 59% on a year-to-year basis, which impulsed costs stabilizing. Our gross margins have expanded by 630 basis points to 35.5%. We expect gross margins to be in the similar range in the financial year 2026. EBITDA for the quarter stood at INR 142 crore, which is a growth of 67% on a year-to-year basis.
PAT for the quarter has stood at INR 143 crore, showcasing a growth of 424% on a year-to-year basis. Working capital days stood at 100 days as on 30th of June 2025, showing an improvement by 18 days as compared to March 2025. CapEx for the quarter stood at INR 114 crore. Cash and bank and liquid investments stood at INR 791 crore as on 30th of June 2025. As we step into 2026, we aim to increase the product registrations with a planned CapEx of INR 400 crore to INR 450 crore, backed by a strong pipeline that reflects our resilience and growth focus. We maintain our stance for FY 2026 revenue to grow by 15% with a healthy EBITDA margin in the range of 15%- 18%. With this brief overview, I would now like to hand over the call to our CFO, Mr.
Shailesh Mehendale, for discussing our financial performance during this period. Thank you so much. Over to Mr. Shailesh Mehendale.
Yeah, thank you, sir. Good evening, everyone. Coming to the quarter one financial year 2026 performance, revenue stood at INR 985 crore in Q1 FY 2026 versus INR 785 crore in Q1 FY 2025, with an increase of 25% year- on- year. Coming to the flip, agrochemical business increased by 25% year-on-year to INR 846 crore, whereas the non-agrochemical business increased by 31% year-on-year to INR 139 crore. Gross margins stood at 35.5% in Q1 FY 2026 as against 29.2% in Q1 FY 2025. EBITDA grew by 67%, which stood at INR 142 crore, with EBITDA margin at 14.4%. PAT stood at INR 143 crore versus INR 27 crore during last year, showing 424% growth on a year-on-year basis. Working capital days stood at 100 days as on 30th June 2025, with an improvement by 18 days as compared to 31st March 2025.
We remain a debt-free company and have cash and bank liquid investment of INR 791 crore as of 30th June 2025. We can now open the floor for the question and answers. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Bhavya Gandhi from Dalal & Broacha Stock Broking Pvt. Ltd. Please proceed.
Yeah, hi. Thanks for the opportunity. Sir, is it possible to set a gross margin geography-wise? Reason why you gross margins for each region?
One minute.
Just give me a second, please. Yeah, the gross margin for the Europe region was 43%, NAFTA region was over 26%, LATAM 28%, and the Rest of the World 26.5%. Total 35.5%.
Got it, sir. Sir, what has led to this substantial growth in the European region where our revenues have grown 43%? If you can show some light on that.
Sir, growth from the agrochemical sector and good demand and good weather conditions promote the agrochemical business, agricultural business, which is supported by agrochemicals.
Okay. Sir, on the revenue front, is it possible to break down in terms of product mix, forex, and volume value growth? What is the broad bifurcation if you can provide?
Volume value, yes. Let me see. Now, volume in the European region, it was 6.565 million. NAFTA 3.87 million. LATAM 805,000. Rest of the World 417,000. Total 11.657 million. What is the 13.2% growth.
Great. Sir, can you just throw some light on the forex gain that has been substantial for this quarter, almost INR 70 crore plus? If you can just throw, is it because of the euro appreciation and how do we see this going forward?
See, it is mainly dependent upon the cross-currency exchange rate. Our business model is that we source from China, and all the sourcing is done in U.S. dollars. About 45% of our sales is in the European region, which is in euro currency or some of the countries' local currencies like Polish złoty or Czech koruna and other things. Whenever the euro dollar exchange currency improves, we stand benefited and profited. Last year, or about six months back, the euro dollar exchange rate was $1.04, $1.03 to a euro. Currently, the same exchange rate is $1.17 to a euro. This is more than a 12% increase in the exchange rates, which is a straight benefit to Sharda's business.
Fair enough, sir. Thank you so much. That's all from my end.
Thank you. The next question is from the line of Rudraksh Raheja from iThought Financial Consulting. Please proceed.
Thank you for the opportunity, sir. My first question is, could you elaborate more on this Q1 growth, 25% sales growth, and was there any upfronting of sales in anticipation of tariff hikes? Can we assume this kind of growth to be sustainable?
Sir, your second part of the question was not very audible. The word got disturbed. Can you please repeat this question once again?
Yeah. Sir, this 25% sales growth in quarter one, was there any upfronting of sales in anticipation of tariffs?
Was there any what?
What was the word?
Upfronting of sales. Upfronting, what does that mean?
The customers are assuming that tariffs may hike, so they pre-ordered a lot of materials.
No, it was very normal that customers were buying their normal requirements. In some cases, of course, the tariff matter which is being discussed by the current U.S. President, which has been exciting and also depressing some people, is not very much new. Our customers are above their normal requirements and not very excited to buy more.
Sir, we should assume that this can sustain over the coming years.
Yes, please. Yes, please.
Good to know that, sir. Our second question is regarding the gross margin expansion, which is the highest in the last few years. Can we assume this number to be sustainable as well?
My role is yes.
Sir, did it have any inventory gains or something like that? If yes, how much?
No, there's not been any substantial or remarkable inventory gain at all.
Understood, sir. Tariffs for China are already declared. Sir, what's the impact on our business that you expect going forward?
Very little. Because today, China is considered to be a factory to the world. Even the U.S. does not have much of an alternative sources to source from. We are able to pass on all the tariff increase to the customers in the U.S., and they gracefully accept it, knowing what is the situation.
Yes. Thank you, sir. If I can squeeze in one last question, how do you see the pricing situation?
Yeah, could you please go back in the queue, as there are several participants waiting for their turns?
Yes, sir. Thank you.
Thank you. The next question is from the line of Viras from Simpl. Please proceed.
Yeah, hi. Thanks for the question. Just two questions. One is on the non-agrochemical business. If you see the last three quarters, our volume growth is much higher than value growth. There's a negative realization which is playing out for the last three quarters in a row. The last two quarters, the realization drop is even sharper. Just trying to understand what is causing this sharp drop in realization, especially in Q1, you would have a higher tariff on imports from China. One would think the realization growth would be there to some extent. Even in Q1, we have seen a negative realization. What is driving the negative realization and what is driving the higher volume growth?
Have you noticed any negative realizations? Mr. Viras, you have not noticed any negative realizations, so I do not understand what do you mean by that?
If you look at our volume and value numbers which we report for the non-agrochemical business, you know, we have seen overall sales growth of 31%. We talked about a value volume growth of 59%. There's a negative realization or negative price growth of 28%. Similarly, it was the case in the last quarter and the quarter before?
No, we have not looked at it from this angle. It has not drawn our attention in the past.
Okay.
I'm not able to comment. I'm not able to make any comments instantly.
Okay. Can you give some perspective on the non-agrochemical business, especially to the U.S.? You know, how you know on the post-tariff, what are we seeing in terms of the demand and similarly in terms of the pricing there?
We had gone through one short period of time when the President of the U.S. had increased the tariff rate to 125% over and above the existing tariffs. People were not very much encouraged. They were, in fact, discouraged. Suddenly, he brought it down from 125% to about 30%. You know, that excited the customers, and they rushed to buy as much as they could, fearing that it may go up to again 100% also. That was a short period of time when people bought in a very good quantity.
Okay. Was there any element of pre-buy or given that there's still an uncertainty on tariffs, what can play out for the rest of the year? Was there any element of pre-buy in the non-agrochemical business?
No, sir. Normally, if you understood our non-ag business, our non-ag business does not have much of an emphasis on the stock keeping and then using it. People buy as per the requirement. It is just like a tailor-made business. Every customer has a specific requirement, specific sizes, and different qualities. It's not very common. We are supplying to them as per their requirements, and that requirement may not repeat, normally doesn't repeat with the next customer.
Okay. The second question is on the academic business. The gross margin region-wise which we gave for Europe and NAFTA, we have seen a very sharp jump in gross margin, say from 36 to 43 for Europe and 26 as against 22 for NAFTA. What explains this jump in gross margin for?
See, we have gone through a very difficult period in our business in the last two years, particularly about one and a half years back when there was a lot of inventory in the channel, and the prices had taken a very severe beating. That had also affected our gross margins substantially. Now the gross margins have gone back to the normal, and what you are comparing is with a period which was abnormal.
Okay.
Do you understand?
If I look at the rest of the year, what factors are you looking internally which give you confidence that this margin will sustain? There is much more and very good stability in the business today?
Last one and a half years, we are going through a very adverse turmoil. That turmoil does not exist anymore.
Okay, just one request and I'll come back to you. Any thoughts on cash? Because I think we were around INR 550 crore-INR 600 crore, and in Q1 alone, we are close to INR 800 crore. Any thoughts on how we want to use this cash? Because even with the CapEx of INR 450 crore, this cash level will just build up further. Any thoughts on how we want to use this cash?
We want to run our business very comfortably and safely for any adverse situations and still be able to maintain our business.
Any thoughts on increasing payouts, sir?
Yes, we have. We have declared two times dividends in this last quarter. We will be more liberal in giving payout dividends for any subscription, rewarding the shareholders who have stayed with us for so long.
Thank you very much.
Thank you.
Thank you. The next question is from the line of Rajat Setiya fr`om iThought PMS. Please proceed. I would request Rajat, sir, to please unmute yourself and then ask a question.
Hi, can you hear me now?
Yes.
Am I audible? Okay. Thanks. Thanks for the opportunity. In the academic business, what has been the change in pricing situation in Q1?
The pricing situation has improved over the previous quarter, and the rate of increase is very slow, but it is very steady.
Okay. Sir, our sales grew by 25%. Volume was 11%. Are you saying that price has increased by 14%?
One minute. Let me look at the figures.
Sir, this has increased. This is the revenue increase that I'm talking about. Volume growth has contributed to about 13%, and foreign exchange impact has been another 13%. Price and product mix has been - 1%. Understood.
At least 25.4%.
Sure. I thought similarly, non-agro volume growth is 59%, but revenue is 31%. Prices have not declined is what you have mentioned in the previous participant answer. Is it because of the change in product mix that value growth is lower than volume growth?
No, I feel it has contributed more to the freight rates. The freight rates have increased substantially, and that has contributed to the increase in the revenue.
Okay. I heard that volume has increased by 59% or so. Is that correct?
The increase of 59% is in the revenue if I'm correct.
Only.
I'm sorry. It is 59% in the volume. You're right.
Yeah, sales is 31% increase. Is it a difference? Does that not mean that prices have fallen? How will you help us understand this?
Sir, it is the product mix.
Product mix. Lower value products, they are sold more in this quarter. Is that how it is?
Yes.
Okay. Sir, our gross margins, you have said that they will probably maintain in the rest of the year as well, around 35%. What is the reason that our gross margins have increased so much? Even price increase is not much.
Mainly foreign exchange.
Foreign exchange is reflecting below gross margin if I'm not wrong in the P&L statement.
There's also an increase in the volume.
I understand. Yeah.
As I explained, volume has contributed about 13%, and forex, in fact, is also about 13%.
Sure. Sir, I want to understand the gross margin between sales minus cost.
Thank you, Rajat. I would request you to please go back in the queue.
This last question, I think you will not then understand, or maybe I couldn't explain well until at the last question on that.
35%. What is it?
All right.
Thank you so much. Sir, I was saying sales minus cost of goods sold, it's gross margin. That number is 35%, which is the highest in the last many quarters. You were saying it will sustain. What led to this increase, sir?
We see we just put in that to this.
Yeah, sir. What were the factors that drove this?
It is because of the stability in the business, no impact of excess inventories, and no adverse situation of people canceling their orders at the last moment or returning the cargo.
Understood. All right.
This is the stability of the business.
Thank you so much. Sir, thank you so much. All the best.
Thank you. The next question is from the line of Rohit Nagraj from B&K Securities. Please proceed.
Yeah. Thanks for the opportunity and congrats on those correct numbers, including the volume growth factors. First question is, in terms of the margins for Q1, our gross margins have improved. There is a benefit of forex. Excluding the forex, our EBITDA margins are closer to 16%. You mentioned in your commentary that gross margins for the entire year will hover at similar levels, and our guidance is about 15%- 18%. Incrementally, will the EBITDA margins be more towards 15% or will they tend more towards 18%? Excluding the forex part, which we have benefited substantially during Q1, and it may not recur in the subscription process. It's just your perspective on the same. Thank you.
Sir, I feel that the foreign exchange levels will remain at the same levels, and our EBITDA margins will also continue in the range of 15%- 18%.
If the prices tend to improve from here on, is it possible that we will stick more towards, say, 18% than on the lower range?
Yes. We feel that the prices are on the way of improvement. Though they're progressively low, they are on the increase.
Okay. The second question is, in terms of the freight costs, you mentioned that the freight costs have been higher. During the last one month, I mean, post-quarter and towards the end of last quarter, how has the trend been? Is it still continuing to be higher and probably that will have its repercussions on the overall logistic cost for us?
It is on the trend of getting higher because of all these worldwide conflicts, particularly Iran, Israel, and these Red Sea disturbances. That’s when uncertainty and they are leading to the increase in the freight and also increase in the time of travel.
Right. That was from my side. Thanks a lot and all the best.
Thank you. The next question is from the line of Himanshu Binani from Anand Rathi. Please proceed.
Hi. Congratulations for an excellent set of numbers, sir. My first question is largely on the gross margin or the guidance side, basically. What we have been guiding in the last call, we are guiding for somewhere around the 30%-31% sort of gross margin while a 15%- 18% sort of EBITDA margin. Now, after the Q1 result, we have increased our gross margin guidance and expect the margins to sustain at this 35%-36% sort of number. However, we have been maintaining our EBITDA margin guidance of 15%- 18%. What is it that is stopping us in terms of increasing the EBITDA margin guidance also?
It may go towards 18 or a little more than 18. I mean, there's no precise calculation for this. This is our gut feeling and impression.
Because, sir, the gross margin guidance has been increased by almost 300 to 400 basis points. However, we have been maintaining the EBITDA margin guidance in that range. Ideally, that should typically flow to the EBITDA is what.
No, our EBITDA margin estimates earlier were on the lower side of 15%. Now it is on the higher side of 15%.
Got it, sir. The second question is largely on the agrochemical cycle side. As you alluded in your commentary as well as in the answers for the previous participants, there has been no thought of pre-stocking. Is it more of a cycle which is trending positive now from a destocking phase? Are we entering into the restocking phase?
No, it's not destocking or restocking. People are buying as per their normal requirements with the normal level of inventories, if at all. This happens prior to the season in the agrochemical business, and it gets reduced at the end of the season.
Right. Because while that is, we typically Q4 happens to be the heaviest basically for us. However, we have quoted this sort of numbers at the start of the quarter year basically. Just wanted to have a sense in terms of is it really that demand on the ground or is it more of a restocking basically?
I feel it is demand on the ground.
Got it, sir. Got it. That's all from my end. Thank you.
Thank you.
Thank you, sir.
Thank you. The next question is from the line of Riju from Antique Stock Broking . Please proceed.
Hi, sir. Thanks for the opportunity. Sir, if I look at the margins, the gross margin basically improved by 630 basis points on a year-over-year basis, while the EBITDA margin only improved by 360 basis points on a year-over-year basis. There is a sharp jump in the other expense side. If you could give some light or give me thoughts on this thing because we have seen a strong volume growth. Despite that, we have higher other expenses. If you could give some light on that.
Sir, it is very difficult to answer this question. I am facing this question for the third time in this conference. I mean, offhand, I am not able to comment. We'll need to go into the detail and then make an answer. You can write to us.
Sure, sir. A few bookkeeping questions. If you could provide the strengths and breakup for the geography, like geography-wise resistant breakup.
One minute. Yes. We have 2,981 registrations as on 30th of June. European region is having 1,660 registrations. NAFTA region about 315, LATAM 760, and the Rest of the World about 248. Total 2,981.
Yeah. Sir, in terms of the volume that you have said, like the region-wide volume, you have said this total volume was 11,657, correct? Total volume, yes, right? You said that is a 13% kind of a growth. If I look at your last year number, the total volume was 10,861, which is probably, you know, 7% kind of a volume growth. If you could explain this math, like if I'm wrong in the last year volume data or this year, if you could explain anything.
I did not understand the question. Can you repeat the question?
Yes, sir. This year, our total agrochemical volume was 11,657, right?
One minute. This is 11,657 is the total.
Yeah, total. Total volume.
It's spinning agro and non-agrochemical segments.
Yeah, sir, in last year, this was roughly around 10,861. Is that correct?
Last year?
Last year.
No, last year I have, but I have finished it for the quarter one.
Yeah, quarter one. Last year Q1 because 10,000.
Last year, Q1 the table I have shows that the total agro and non-agro, the volume was 10.301 million. This year it is 11.657 million, and there's a growth of 13.2%.
Okay. Okay. Understood. If you could give me the breakup for the last year data, it will be very much helpful. Last year Q1 data. Last year Q1 volume data.
Yeah. Europe has $5.144 million. NAFTA was $4.126 million. LATAM was $0.623 million. The Rest of the World $0.408 million. Total $10.301 million.
After ROW, how much the number of the Rest of the World?
Pardon? Rest of the World $408,000.
Okay, understood. Yeah, okay. Got it.
Thank you.
Thank you. The next question is from the line of Rudraksh Raheja from iThought Financial Consulting. Please proceed.
Yeah. I think this may be a repeat of the last questions, but I still want to check. Historically, we have seen like gross margins in the range of 30%- 32% mostly. This quarter, it's 35%. Any elaborations on that?
This is mainly because of a good margin in the European region.
Okay. So.
Europe is having also a good share of the total revenue. The margins in the European region was about 43%.
Okay. Specifically for the European region, did we see any price increase?
There has been some improvement in the prices. It has been better than the previous quarter.
Okay. Any ballpark percentage around that?
Pardon?
Any % that you can give us? Quantify it.
Ballpark figure for what?
European price increase.
No, no. I don't have that figure. This is a general statement that I'm making.
Okay. Understood, sir. Thank you.
Thank you. The next question is from the line of Archit Joshi from Nuvama. Please proceed.
Hi. Good evening, team. Firstly, congrats on a solid set of numbers. Sir, my question was last year related to our CapEx. We have heard you say that the CapEx or rather the registration costs have gone up significantly. Yet we continue to have a very solid registration pipeline. Given that the total number of registrations that we do, do we get economic benefits from all the registrations? I wanted to understand for how long these registrations that we do continue to contribute to our top line and profitability. How many over a period of time become obsolete in terms of sales? Given that we have 2,000-plus registrations, I was just curious to find out how much of this actually gets converted into economic benefits or rather sales.
See, Mr. Archit, if the newer registrations that we get, they give us a better margin. The registrations which have been old, there's more competition in those registrations, and the margins get distributed. As and when the registration becomes older and older, the profit margins are going down. The newer registrations are coming with better profit margins. This is the general statement I can make.
Understood. Sir, over a period of time, since we have seen increasing cost of registration, do we continue to register these thousand-odd products that you have in the pipeline, or have we become more selective with regards to having, let's say, a go-to-market strategy or something like that, which can be a very targeted play towards certain geographies with certain products? Have you experienced any sort of such strategic changes in our registration pipeline?
Not anything significant that I can make a reply to you. Very rarely, once we pick up a product for registration, we pursue it till we get the registration unless all of a sudden the product gets banned because of environmental reasons or other reasons.
Understood, sir. One last thing.
That was very rarely over the.
Yeah.
Sorry, My.
One last question from me. Generally, over the last few years, or maybe if you can speak about this year also, how would be the concentration of, let's say, the top 10, maybe 20 products for our top line? Will it be like more than 50%, less than 50%? Any ballpark number that you can provide?
Yes, sir. I can pursue you in a few minutes. You see, top 10 molecules have contributed to 36% of the total revenue in the first quarter of 2026. The top 10 molecules in last year in the same period was about 38%. Top 5 molecules have contributed to 21% this year and 23.5% last year. Top 3 molecules have contributed to 14% this year and 16% last year.
That's really elaborate, sir. Thanks a lot for all these answers. I enjoyed seeing you. All the best.
Thank you. I'm happy that my team was prepared for this kind of questions.
Thank you. The next question is from the line of Viras from Simpl. Please proceed.
Yeah. Thanks for the opportunity. Just one follow-up question. You know, you said that the reason for drop in realization of non-agrochemical business is product mix. If you look at the margins in non-agrochemical business, they have been quite stable, around 21%- 23%. Just trying to understand, you know, how does the two add up?
Can you repeat? I have not understood your question, sir. Can you repeat it once again?
We answered to one of the previous participants to non-agrochemical business. You said the realization drop was product mix being it was. If you look at our operating margin in non-agrochemical business, you said realization drop.
I don't understood that.
I don't think I have made any such statement.
The non-agrochemical business, if you see, we have seen a realization drop, price regrowth for the last couple of quarters. The answer to that question to one of the participants, you said that product mix is adverse. If I look at our margin in non-agrochemical business, they've been quite stable, around 21%- 23%.
Mr. Viras, your question is not making much sense. I'm not able to understand the exact question. Please.
If I look at operating margin in non-agrochemical business, they have been very stable, around 21%- 23% in non-agrochemical business. If I look at the realization, they have been adverse. While margins are stable, the realization is negative for us.
We will have to look into that. I'm not able to comment right now.
Okay, that's all. Thank you.
Thank you. As there are no further questions from the participants, I would now like to hand the conscience over to the management for closing comments.
I would like to thank everyone for joining us for this conference call. I hope we have been able to answer all your queries. We look forward to such interactions in the future. We hope to meet your expectations in the future too. In case you require any further details, you may contact us or SGA, who are our Strategic Growth Advisors over investor relations partners. Thank you once again.
Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you.