Best Agrolife Limited — Q4 FY25 earnings call

Call held 27 May 2025

Management summary

Best Agrolife reported a significant turnaround in Q4 FY25, reducing its loss to ₹21.6 crores from ₹72.5 crores YoY, driven by a 103% revenue increase to ₹274 crores and a positive EBITDA of ₹4 crore. For the full year, the company improved gross margins to 29.5% and operating cash flow to ₹192 crores, while reducing inventory and borrowings. Despite challenges like market volatility and lower cotton acreage impacting patented product sales, Best Agrolife is focused on product innovation, launching new patented products like 'Shot Down,' and undertaking a ₹90 crore brownfield expansion to enhance backward integration and profitability.

Highlights

  • Q4 FY25 Revenue from operations increased by 103% YoY to ₹274 crores, compared to ₹135 crores in Q4 FY24.

  • Q4 FY25 EBITDA turned positive at ₹4 crore, a substantial improvement from negative ₹67 crore in Q4 FY24.

  • Q4 FY25 PAT loss reduced to ₹21.6 crores from negative ₹72.5 crores in Q4 FY24.

  • Full Year FY25 Gross Margin improved to 29.5% from 24.7% in FY24.

  • Full Year FY25 Inventory position reduced by ₹185 crores, a 19% YoY improvement.

  • Full Year FY25 Working Capital reduced by ₹146 crores, a 54% YoY improvement.

  • Full Year FY25 Operating Cash Flow significantly improved to ₹192 crores, a 449% increase from ₹35 crores in FY24.

  • Full Year FY25 Total Borrowing reduced by ₹161 crores, a 25% reduction from last year, with short-term borrowing decreasing from ₹670 crores to ₹453 crores.

  • Launch of new patented product 'Shot Down' and plans for 'Bestman' and 'Futagin' in FY26.

  • Brownfield expansion of technical plant with a CAPEX investment of ₹90 crores.

Concerns

  • Q4 FY25 faced challenging market conditions, including lower cotton acreage and issues with Chilli produce price.

  • Full Year FY25 Revenue from operations slightly decreased to ₹1814 crores from ₹1873 crores in FY24.

  • Full Year FY25 EBITDA contracted to ₹200 crores from ₹225 crores in FY24, attributed to increased costs for branded products strategy.

  • Patented product revenue for FY25 was ₹357 crores, lower than analyst expectations due to a 30-40% reduction in cotton acreages.

  • Forex volatility resulted in an expense of ₹10-12 crores per annum.

  • Only 25% of the committed QIP funds (₹150 crores total) have been received, with the balance 75% pending due to market challenges.

Key financials

2 periods

Q4

  • Revenue
    ₹274 Cr
    YoY +103%
  • EBITDA
    ₹4 Cr
  • PAT
    ₹-21.6 Cr

FY25

  • Revenue
    ₹1,814 Cr
    YoY -3.1%
  • EBITDA
    ₹200 Cr
    YoY -11.1%
  • Gross Margin
    29.5%
  • Operating Cash Flow
    ₹192 Cr
    YoY +448.5%
  • Short Term Borrowing
    ₹453 Cr
    YoY -32.4%

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.

Segment breakdown

Share of Revenue
₹1,814 Cr Total
  • Branded Sales ₹1,190 Cr 65.6%
  • Institutional Sales ₹624 Cr 34.4%

Capital allocation

high confidence
  • Capex ₹7 Cr this quarter · ₹90 Cr (FY26) planned
    • Brownfield expansion of technical plant in Gajraula (UP) for production of insecticides, fungicides, herbicides, and high-value herbicides like topramezone. ₹90 Cr
    This year we are planning to brownfield expansion of our technical plan with a CAPEX investment for the project will be tuned to Rs.90 crores. We will strategically expand our R&D capabilities with new product release. We will be committed to developing safe product for the benefit of the farmer and the environment. (Vimal Kumar) So we have just about spent close to Rs.7 to Rs.10 crores. This will be extension in our existing plant in Gajraula which is in UP. So we have a technical plant there. So these three, four products, the setup which you are going to do. (Management)
  • Debt Debt disclosed Cost 9.5%
    • Repayment Total borrowing reduced by Rs.161 crore, a 25% reduction from last year. ₹161 Cr
    • Repayment Short term borrowing reduced from Rs.670 crores to Rs.453 crores. ₹217 Cr
    Our cost of capital is between 9.5% to 10%. (Management)

Guidance & targets

Profitability

  • EBITDA percentage Profitability · FY26 · Medium confidence drastic improvement
    So, as I have been clearly saying that our target for 25-26 is to improve the profitability, so you will certainly see a drastic improvement in our EBITDA percentages this year. So the key would be the profitability to improve our profitability this year.

    — Management

  • EBITDA Margin Profitability · FY26 · Medium confidence 15-18%
    Yes, in that range of 15% to 18%.

    — Management

Product Innovation

  • Number of patented products launched Product Innovation · every year · High confidence three to four
    Our aim is to release three to four patented product every year.

    — Vimal Kumar

Revenue

  • Additional revenue from 3 new patented products (Shot Down, Bestman, Futagin) Revenue · First year (FY26) · Medium confidence ₹150 crore
    So this three product will give us near about Rs.150 crore additional revenue for first year that we are expecting.

    — Management

Operational Efficiency

  • Sales returns Operational Efficiency · FY26 · High confidence reduction
    For the FY'25-26 we have introduced strategic sales policy design to drive demand of our specialty products. We expect to see a reduction in our sales returns.

    — Vimal Kumar

  • Inventory position Operational Efficiency · FY26 · Medium confidence a lot of improvement going forward
    with respect to inventory, from this present number also you will see a lot of improvement going forward, and in the new policies, which you are bringing for this year will certainly help.

    — Management

  • Working capital cycle Operational Efficiency · FY26 · High confidence reduce
    Our key focus would also be to reduce the working capital cycle, and especially within better inventory management.

    — Vikas Jain

Capital Raising

  • Balance 75% of QIP funds (₹150 crores total, 25% received) Capital Raising · FY26 · Low confidence hopeful to raise it this year
    Yes, we should be hopeful to raise it this year.

    — Management

What to watch in Q1 FY26

FY26 EBITDA Margin

FY26 (check progress in Q1/Q2 results)
Current FY25 EBITDA Margin ~11% (200cr EBITDA on 1814cr revenue)
Target 15-18%

Why it matters

Management has guided for a significant improvement in profitability, crucial for the investment thesis.

Yes, in that range of 15% to 18%.

Risks & concerns

  • Challenging market conditions

    medium

    Market conditions were more challenging than anticipated, particularly in cotton acreage and Chilli produce price.

    Management acknowledged

  • Sales returns

    medium

    Sales return has always been a challenge, a major concern in the agrochemical industry, but new policies are in place for FY26.

    Management acknowledged

  • Delay in QIP fund realization

    medium

    Balance 75% of QIP funds (₹112.5 crores) are pending due to market challenges, with management hopeful to raise it this year.

    Analyst acknowledged

  • Forex volatility

    low

    Forex volatility between November and February resulted in ₹10-12 crores per annum in expenses.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Ronfen patent revenue in Africa and timeline for revenue generation. Direct
this will take at least a couple of years before we see the revenue stream from product like Ronfen in Africa.

Clarifies that international patent wins have a long lead time for revenue, managing investor expectations.

Asked by Hemant

Sales return policies for FY26. Direct
we have put certain restrictions that we are not going to take more than 5% and accordingly, have planned our numbers with the sales team to say that, the demand planning would be much better so that our sales realization will be much lower.

Indicates concrete steps taken to address a significant operational challenge (sales returns) that impacted past performance.

Asked by Hemant

Patented product revenue for FY25 (₹357 crores) vs. expectations. Direct
the cotton acreages itself had went down by 30% to 40% so there was a huge reduction in the cotton acreages in the last year that was the main reason, because of which the Ronfen sales were lesser as compared to what you thought.

Explains a key reason for lower-than-expected patented product sales, linking it to external agricultural factors.

Asked by Hemant

High cost inventory from Q1/Q2 last year. Partial
mostly it is from the patented products. And those patented products was always at our lowest cost only, we didn't had the correction was mostly from the specialty or the generic products when price had corrected.

Addresses a potential concern about inventory write-downs, clarifying that the high-cost issue was not primarily with patented products.

Asked by Hemant

FY26 outlook and focus. Evasive
So we are not giving any projection with respect to what percentage increase we want. Rather, our main focus this year would be with respect to the profitability, improving the gross margins and reducing our cost and improve our cash flow.

Management explicitly states a shift in focus from top-line growth to profitability and cash flow for FY26.

Asked by Hemant

Q1/Q2 FY26 outlook given early monsoon. Direct
Yes, Q1 and Q2 based on seasonal conditions we see as of now, looks to be good... So we see a good Q1, Q2 numbers.

Provides positive near-term outlook for the first half of FY26, citing favorable seasonal conditions.

Asked by Saket Kapoor

Impact of other expenses increase (FY25 vs FY24). Direct
because we had launched four patented products. So there is obviously initial higher marketing costs and the branding expenses... With respect to Forex, Yes, because of volatility... we had incurred for almost about Rs. 10 to Rs.12 crores per annum which also is included in other expenses.

Explains the reasons behind the increase in other expenses, attributing it to new product launches and forex volatility.

Asked by Saket Kapoor

Status of QIP funds (balance 75%). Partial
But there was some technical issue at that time from one or two of the investors, which we got after a week or so. So we got 25% now, as you rightly mentioned, there is certain challenges in the market wherein we cannot go and take the balance 75% but as and when we feel the improvement in the market, we will certainly go back to our investors to take the balance 75% as well.

Reveals a delay in securing the full QIP funds, indicating potential capital constraints if market conditions don't improve.

Asked by Sanjay

3 min read 7 chapters

Detailed narrative

Q4 FY25 Performance & Turnaround

Best Agrolife demonstrated a significant turnaround in Q4 FY25, with revenue from operations surging by 103% year-on-year to ₹274 crores, compared to ₹135 crores in Q4 FY24. The company achieved a positive EBITDA of ₹4 crore, a substantial improvement from a negative EBITDA of ₹67 crore in the prior year. Consequently, the net loss for the quarter was reduced to ₹21.6 crores from ₹72.5 crores in Q4 FY24, reflecting enhanced operational efficiency and cost optimization efforts.

Full Year FY25 Financial Highlights

For the full fiscal year 2025, Best Agrolife improved its gross margin from 24.7% to 29.5%, indicating a focus on sustainable growth and inventory management. Operating cash flow saw a drastic improvement, reaching ₹192 crores, a 449% increase from ₹35 crores in FY24. The company also successfully reduced its inventory by ₹185 crores (19% YoY) and working capital by ₹146 crores (54% YoY), leading to a 25% reduction in total borrowings by ₹161 crores, with short-term borrowings decreasing from ₹670 crores to ₹453 crores.

Product Innovation & Pipeline

Best Agrolife continues its focus on product innovation, aiming to release three to four patented products annually. The company officially launched 'Shot Down,' a powerful herbicide, and plans to launch two more patented insecticides, 'Bestman' and 'Futagin,' in FY26. These products are designed to be farmer-oriented, address multiple problems with single solutions, and support sustainable farming practices, with the three new products expected to generate approximately ₹150 crore in additional revenue in their first year.

Operational Efficiency & Cost Optimization

The company has implemented strategic sales policies for FY26 to drive demand for specialty products and reduce sales returns, which were 17-18% in FY25. Cost optimization efforts include restructuring and merging regions to reduce OPEX, and changes in policies to reduce sales returns and improve inventory management. These initiatives are expected to significantly improve profitability and accountability across sales channels, with a focus on the bottom line rather than just top-line growth for FY26.

Backward Integration & CAPEX Plans

Best Agrolife is undertaking a brownfield expansion of its technical plant in Gajraula, Uttar Pradesh, with a CAPEX investment of ₹90 crores. This expansion, which will take 10-12 months to complete, aims to create three functionally separate blocks for the production of insecticides, fungicides, and herbicides. The company has already spent ₹7-10 crores on this project and expects effective revenue and profit generation to begin from FY27, enhancing backward integration and reducing dependence on external raw material sources.

International Expansion & Partnerships

The company is making progress in international expansion, with exports to Africa showing early traction and interest from countries like Sri Lanka, Vietnam, Thailand, and Bolivia in its patented products. An international patent for Ronfen in Africa has been granted. Collaborations, such as the MOU with Shanghai E-Tong Chemical Company, are aimed at exploring joint registration opportunities and technical know-how, with early work on intermediate collaboration already in progress.

Challenges & Outlook for FY26

Despite a challenging Q4 FY25 marked by lower cotton acreage and chilli price issues, management remains optimistic for FY26, anticipating good Q1 and Q2 numbers due to favorable seasonal conditions. The company's focus for the upcoming year is on profitability, improving gross margins, and reducing costs, with a target EBITDA margin in the range of 15-18%. However, the full realization of the balance 75% of QIP funds (₹112.5 crores) is pending due to current market challenges, which the company hopes to address as market conditions improve.

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