Best Agrolife Limited — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Best Agrolife reported a challenging Q2 FY26 with significant revenue and profit declines due to adverse weather impacting the Khareef season. Despite this, the company focused on operational efficiency, reducing inventory by 24% and OPEX by 13%, and implementing a revised sales return policy. The shift towards patented products, now comprising over 50% of the portfolio, is expected to improve future margins. Management expressed cautious optimism for the Rabi season and aims for profitability in H2 FY26.

Highlights

  • EBITDA margin showed sequential improvement, reflecting tighter cost controls and efficiency measures.

  • Inventory levels decreased by ₹207 crore (24% YoY) from H1 FY25 to H1 FY26.

  • OPEX reduced by 13% compared to Q2 FY25 and 11% compared to H1 FY25.

  • Sales return expected to be significantly lower in Q3 FY26 compared to previous years due to revised policy.

  • Patented products now contribute more than half of the brand portfolio, enhancing brand value and margin profile.

Concerns

  • Revenue declined 30.8% YoY to ₹516.8 crores in Q2 FY26 from ₹746.6 crores in Q2 FY25.

  • EBITDA decreased 47.3% YoY to ₹77.5 crores in Q2 FY26 from ₹147.1 crores in Q2 FY25.

  • PAT declined 59.6% YoY to ₹38.3 crores in Q2 FY26 from ₹94.7 crores in Q2 FY25.

  • Overall agrochemical demand remained weak due to unseasonal rains and crop damage in the Khareef season.

  • CAPEX plans for the Gajraula plant have been delayed by 3-6 months due to focus on business stabilization.

Key financials

2 periods

Headline

  • Revenue
    ₹516.8 Cr
    YoY -30.8%
  • EBITDA
    ₹77.5 Cr
    YoY -47.3%
  • EBITDA Margin
    15%
  • PAT
    ₹38.3 Cr
    YoY -59.6%
  • PAT Margin
    7.4%

H1

  • FY26 Revenue
    ₹898.1 Cr
  • FY26 EBITDA
    ₹123.3 Cr
  • FY26 PAT
    ₹58.2 Cr

What they filed

Q1 FY27: revenue up 3.9%, net profit up 105.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue747 274 274 381 517 −31%203 −26%156 −43%396 +4%
EBITDA147 -6 4 46 78 −47%4 +167%-27 −775%78 +70%
Net profit95 -24 -22 20 39 −59%-13 +46%-37 −68%41 +105%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex Capex disclosed Cut — focus on business stabilization and adverse monsoon conditions, delaying Gajraula plant expansion
    • Addition in Gajraula plant (delayed)
    So, the plan was only for this addition in our Gajraula plant. So, as we said we are going slow because the focus is more on stabilizing the business. We do not want to focus another part on the CAPEX immediately. So, that we have put on a second priority. So, it would take anywhere from three to six months for us to start this project. Other than this, we do not have any other CAPEX.
  • Debt Debt disclosed Cost 9.5%
    • Repayment Reduced debt by ₹150 crores over the last one and a half years. ₹150 Cr
    We do not have any foreign currency loans. That thing is working capital. We do not even have any term loans as well. So, we are on an average between, you can say around 9.5%.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 13-14%
    We are aiming to achieve an EBITDA margin of around 13% to 14%, with an approximate turnover of around Rs. 1,500 crore for the fiscal year.

    — Vikas Jain, Chief Financial Officer

Revenue

  • Turnover Revenue · FY26 · High confidence ₹1,500 crore

    Previously ₹1,700 crore → ₹1,500 crore

    We are aiming to achieve an EBITDA margin of around 13% to 14%, with an approximate turnover of around Rs. 1,500 crore for the fiscal year.

    — Vikas Jain, Chief Financial Officer

  • H2 FY26 Revenue Revenue · H2 FY26 · Medium confidence ₹600 crore
    So, the proportion could be a little higher or lower, but this is what 600 we are going to do in the next H2.

    — Vikas Jain, Chief Financial Officer

New Products

  • New Product Launches New Products · Next financial year (FY27) · High confidence 2

    Previously 3-4 → 2

    No, maximum two products we will launch in next financial year.

    — Vimal Kumar, Managing Director

Export Revenue

  • Africa Export Revenue (single customer) Export Revenue · FY26 · High confidence $1 million
    This year, we hope to do around $1 million business with this customer alone.

    — Surendra Sai, Whole Time Director

  • China Subsidiary Revenue Export Revenue · FY26 · High confidence $6 million to $8 million
    We have started generating revenue from our China subsidiary and look forward to end the year with $6 million to $8 million in revenue generation.

    — Surendra Sai, Whole Time Director

What to watch in Q3 FY26

Gajraula plant CAPEX commencement

Next 3-6 months
Current Delayed by 3-6 months
Target Project initiation within 3-6 months

Why it matters

Commencement of CAPEX is crucial for future capacity expansion and growth, indicating a return to investment mode.

So, it would take anywhere from three to six months for us to start this project.

Risks & concerns

  • Adverse weather conditions and monsoon dependency

    high

    Unseasonal rains and floods in Q2 FY26 caused significant crop damage, leading to weak agrochemical demand and delayed Rabi sowing.

    Management acknowledged

  • Delayed CAPEX for Gajraula plant

    medium

    CAPEX for the Gajraula plant has been delayed by 3-6 months to prioritize business stabilization and financial discipline amidst challenging market conditions.

    Management acknowledged

  • Volatility in agrochemical business

    medium

    The agrochemical business globally is subject to unexpected peaks and troughs, requiring continuous focus on building a sustainable and predictable business.

    Management acknowledged

  • Lower-than-expected profitability from international business

    low

    While international business is growing, its contribution to the bottom line is currently marginal due to ongoing expenses.

    Management acknowledged

Q&A highlights

6 direct
Delay in CAPEX plans for Gajraula plant Direct
You are absolutely right on the CAPEX front. We have been a little bit slow. I mean in a sense that the monsoons were so bad that we thought we wanted to focus on our regular business and the financial belt tightening to be able to invest immediately on the CAPEX front. So, we have been slow on that aspect. I agree. But we hope to be able to start very soon.

Management confirmed a delay of 3-6 months in starting the Gajraula plant CAPEX, citing focus on business stabilization and monsoon impact, which affects future capacity and growth.

Asked by Saket Kapoor

Reduction in FY26 top-line target from ₹1,700 crores to ₹1,500 crores Direct
Yes. No, this is only because we are going conservative and our total debtors and stocks has reduced a lot, if you see. And even in the last one and a half year, we have reduced our debt of Rs. 150 crores. That is also there. So, if you talk about that way, that is the positive side, which we are controlling our debtors and stocks.

Management attributed the revised lower revenue target to a conservative approach, focusing on reducing debtors and stocks, and acknowledging season failure in some regions, indicating a shift in strategy towards financial discipline over aggressive top-line growth.

Asked by Hemant M

Discrepancy in patented product margins (30-35% earlier vs 13-15% EBITDA now) Partial
No, actually if you see our total growth margin, if you talk about that is around 45%. But on average in total balance sheet, our growth margin is more than 36%. If you talk about this first half result, this is more than 36% is our total growth margin which is there. Definitely with the expenditure and if you talk about the total top revenue, if you match it, then it will reduce in the EBITDA.

The analyst questioned why EBITDA margins are lower despite a higher contribution from patented products, which were previously stated to have higher margins. Management clarified by distinguishing between gross margin (45%) and overall growth margin (36%), implying that operating expenses and lower overall revenue dilute the EBITDA margin.

Asked by Vijay Jhawar

Confidence in warrant investors given share price drop (₹640 vs ₹300) Direct
Yes, Mr. Vijay. In fact, you are talking about the preferential which we have done in January, February. So, definitely there is an 18 month of time as per the guideline. And I think till that time it should be okay because all the participants had said it was 25%, which was Rs. 150 crore. So, we have already got Rs. 37.5 crore. So, Rs. 112.5 crore. It has to come through that and there is a time. So, let us see. I think the third quarter performance, I hope it should be there.

An investor expressed concern about the significant gap between the warrant issue price and current share price. Management acknowledged the 18-month timeframe for warrant conversion and expressed hope that Q3 performance would help address this.

Asked by Vijay Jhawar

Sales return provisions and actuals for Q1 and Q2 FY26 Direct
So, September we have made a provision close to Rs. 80 crores. ... what we are expecting is our returns would be around Rs. 60 crores. But same thing last year was actually around close to Rs. 140 crores of sales return. So, from about Rs. 140 crores last year, we are going to have less than 70, around Rs. 60 crores to Rs. 70 crores for which we made a provision of Rs. 80 crores.

Management provided specific figures for sales return provisions (₹80 crores in Sep, ₹50 crores in Q1) and expected actual returns (₹60-70 crores for Q2), indicating a significant reduction in sales returns compared to the previous year (₹140 crores).

Asked by Saket Kapoor

International business contribution to bottom line Partial
Bottom line at this particular point of time we still have expenses. So, we are still trying to get these things into a better shape. So, this will happen over a period of time. ... Not much. Very marginal.

While international business is growing with targets of $1 million from Africa and $6-8 million from China, management stated its contribution to the bottom line is currently marginal due to ongoing expenses, suggesting it's still in an investment phase.

Asked by Saket Kapoor

Pace of new product launches (analyst expected 3-4, management stated max 2) Direct
No, maximum two products we will launch in next financial year.

Management clarified that they plan to launch a maximum of two new products in the next financial year, which is lower than the analyst's expectation of 3-4, indicating a more conservative product pipeline for the immediate future.

Asked by Hemant M

Confidence in breaking even given fixed costs of ₹120-130 crores per quarter Direct
Yes, definitely. As of now, we are confident because Rabi season is going good and there is no extra burden which last two years we are facing the extra sale return that was impacting our profitability in Q3 and Q4, which is not here in this year, which we already told that under provision it is coming.

Management expressed confidence in breaking even, citing a good Rabi season outlook and the elimination of the burden of high sales returns that impacted profitability in previous Q3/Q4 periods, suggesting improved operational control.

Asked by Vijay Jhawar

3 min read 6 chapters

Detailed narrative

Q2 FY26 Performance Amidst Challenging Weather

Best Agrolife reported a challenging Q2 FY26, with revenue declining 30.8% YoY to ₹516.8 crores from ₹746.6 crores in Q2 FY25. This was primarily attributed to severe unseasonal rains and floods during the Khareef season, which caused significant crop damage and weakened agrochemical demand. EBITDA fell 47.3% YoY to ₹77.5 crores, and PAT decreased 59.6% YoY to ₹38.3 crores, with margins compressing to 15% and 7.4% respectively. The company noted that the Khareef season highlighted Indian farmers' heavy dependence on monsoons, with several key regions experiencing floods and delayed harvesting.

Strategic Shifts and Operational Discipline

In response to the challenging environment, Best Agrolife implemented strategic shifts focusing on operational efficiency and financial discipline. The company consciously optimized inventory, streamlining channels, and aligning production with actual market demand to reduce working capital stress. Inventory levels decreased by ₹207 crore (24% YoY) from H1 FY25 to H1 FY26, and OPEX was reduced by 13% compared to Q2 FY25 and 11% compared to H1 FY25. A revised sales return policy and reduced pre-season order placement strategy are expected to lead to significantly lower sales returns in Q3 FY26 compared to previous years.

Growing Patented Product Portfolio

A key strength highlighted was the growing portfolio of patented products, which now contribute to more than half of the brand portfolio. This shift is enhancing brand value and is expected to improve the margin profile and competitive advantage. Management noted positive farmer feedback on products like Bestman, Fetagen, and SHOT DOWN, with Bestman being particularly effective against thrips and mites. Despite lower overall revenue, the quality of the revenue mix has improved due to the increased sales of patented products.

International Business Expansion and R&D Focus

Best Agrolife is actively expanding its international footprint, particularly in Africa and through its China subsidiary. The company expects to achieve $1 million in business from a single African customer and $6 million to $8 million in revenue from its China subsidiary by the end of FY26. Efforts are underway for product registrations in Mauritius, Sri Lanka, and Vietnam, with active ingredients and formulations moving through approval processes in Taiwan, Mexico, Thailand, and other key markets. The company also emphasized its R&D focus, having added four new patents in H1, including a novel nano-urea footprint, and is exploring AI adoption in its operations.

Capital Expenditure and Debt Management

The company's CAPEX plans, specifically for the Gajraula plant, have been delayed by 3-6 months. This decision was made to prioritize business stabilization and financial belt-tightening amidst the tough monsoon season, rather than immediately investing in new CAPEX. On the debt front, Best Agrolife has reduced its debt by ₹150 crores over the last 1.5 years. The cost of debt is approximately 9.5%, and the company's credit rating is BBB. Management confirmed no foreign currency or term loans, indicating a focus on working capital management.

Outlook for Rabi Season and H2 FY26

Management expressed cautious optimism for the Rabi season, expecting volume growth to recover due to improved farmer sentiments, full reservoirs, and favorable soil moisture levels. They anticipate stronger demand for wheat and potato-related crop solutions. For the full fiscal year FY26, the company aims for an approximate turnover of ₹1,500 crore and an EBITDA margin of 13-14%. The focus for H2 FY26 will be on returning to profitability in Q3 and Q4, driven by operational efficiency, innovation, and reduced sales returns.

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