BASF India

The Materials segment was the primary driver of BASF India's 29% PBT growth in H1 FY25. The segment contributed an additional ₹600 crores to the top line and saw its PBT contribution jump from ₹15 crores to ₹110 crores YoY. This performance offset the margin compression seen in other divisions, particularly Agricultural Solutions.

Despite a 14% revenue growth in the Agricultural Solutions segment for H1, PBT fell from ₹310 crores to ₹249 crores. Management attributed this to a 6-percentage point drop in PBT margins (from 25% to 18%) caused by higher input costs and an unfavorable product mix. Erratic monsoons also led to 2-3 fewer insecticide sprays in key regions, though reservoir levels remain positive for the upcoming Rabi season.

BASF Global has identified India as one of seven 'advanced countries' expected to drive 80% of chemical market growth over the next decade. This designation implies a strategic focus on growing above the market rate and increasing local manufacturing and R&D capabilities. The company is currently increasing polyamide compounding capacity by 40% at its Panoli and Thane sites to support this growth.

Management highlighted the persistent threat of Chinese overcapacity, noting that slow domestic recovery in China is forcing excess volumes into export markets like India. This has placed significant pricing pressure on the Chemicals segment, particularly petrochemicals. Management does not foresee a substantial improvement in this pricing environment in the near term.

The company maintains ₹800 crores in Inter-Corporate Deposits (ICDs) with group entities, yielding approximately 7.5%. While analysts questioned this allocation versus higher-return investments, management emphasized that these are short-term (3-month) liquid instruments used to manage working capital needs and finance growth internally without bank borrowing.