Best Agrolife Limited — Q4 FY26 earnings call

Call held 28 May 2026

Management summary

Best Agrolife faced a challenging FY26 with significant revenue and profit declines due to adverse market conditions and high inventory. Despite this, the company improved its gross margin percentage, reduced inventory, and continued to innovate with new patented products and R&D. Management is focused on operational discipline, pricing actions, and strengthening its product portfolio, expecting a recovery in profitability from Q1 FY27.

Highlights

  • Gross margin percentage improved to 30% in FY26 from 29% in FY25, supported by product mix improvement and calibrated pricing actions.

  • Inventory levels reduced significantly from ₹958 crore in FY24 to ₹651 crore as of March 31, 2026, reflecting tighter procurement and channel management.

  • Successful launch of three patented products (Bestman, Fetagen, Shot Down) in FY26, receiving positive farmer feedback.

  • Secured 7 combination patents and 1 nano urea patent, reinforcing commitment to innovation-led growth.

  • Sales return as a percentage reduced from 20-30% to 20-21%, with a target to go below 20% next year.

Concerns

  • Consolidated revenue declined by 31% YoY to ₹1,257 crore in FY26, and by 43% YoY to ₹156 crore in Q4 FY26.

  • EBITDA declined by 50% YoY to ₹100 crore in FY26, with margin compressing from 11% to 8%.

  • Q4 FY26 saw negative EBITDA of ₹27 crore (vs negative ₹4 crore in Q4 FY25) and negative PAT of ₹37 crore (vs negative ₹22 crore in Q4 FY25).

  • High receivables, with an analyst flagging over ₹200 crores outstanding for more than 6 months, raising concerns about balance sheet health.

  • Impacted by adverse climatic conditions, uneven pest incidences, elevated channel inventory, weak dealer liquidity, and raw material price volatility.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹156 Cr
    YoY -43.1%
  • Gross Margin
    ₹35 Cr
  • Gross Margin %
    23%
  • EBITDA
    ₹-27 Cr
    YoY -575%
  • EBITDA Margin
    -17%
  • PAT
    ₹-37 Cr
    YoY -68.2%
  • PAT Margin
    -24%

FY26

  • Revenue
    ₹1,257 Cr
    YoY -30.7%
  • Gross Margin
    ₹380 Cr
  • Gross Margin %
    30%
  • EBITDA
    ₹100 Cr
    YoY -50%
  • EBITDA Margin
    8%
  • PAT
    ₹9 Cr
    YoY -87.1%
  • PAT Margin
    1%

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

medium confidence
  • Capex Capex disclosed Cut — postponing newer capex in existing plant
    Vikas Jain: Yes, just to go one by one with respect to our earlier capex, we had guided to say that we will do some sort of capex but that as was previously mentioned in our board meeting that we are postponing the newer capex which we are supposed to do in our existing plant.
  • Debt Debt disclosed
    Vikas Jain: So, our utilization of the bank facilities it is at around 85-90%. That means still 10% facilities we have which we can avail and we can utilize. Plus, this additional help which has come from the central government those also we will take. And as and when we also start collecting advances from this May, June, July from the customers. So, you will see that the requirement goes up for the initial 6 months till September. And once the collection starts coming from September, October the loan balances also goes down. If you see my last 3 years loan balances we have been constantly reducing it.
  • Liquidity Liquidity disclosed Company has enough liquidity in its system and 10% of bank facilities still available for utilization, plus additional government help.
    Vikas Jain: So, based on that already we have enough liquidity in our system to manage this. So, this happens at a cycle in our business every year. ... our utilization of the bank facilities it is at around 85-90%. That means still 10% facilities we have which we can avail and we can utilize. Plus, this additional help which has come from the central government those also we will take.

Guidance & targets

New Products

  • Patented Product Launches New Products · FY27 · High confidence Fluzam, Midcotin, Cubax Power Extra, Trishanku
    FY'27 will see us launch Fluzam, Midcotin, Cubax Power Extra, and Trishanku.

    — Surendra Sai

New Molecules

  • New Generation Molecules Production New Molecules · FY27 · High confidence At least 4
    At least 4 new generation molecules will be produced this year at the Gajraula facility.

    — Surendra Sai

Profitability

  • Profitability Improvement Profitability · Q1 FY27 onward · Medium confidence Progressive support
    We expect these pricing interventions to progressively support profitability beginning Q1 FY27 onward.

    — Surendra Sai

EBITDA Margin

  • Branded Segment EBITDA Margin EBITDA Margin · Next year (ideal situation) · Medium confidence 18-20%
    EBITDA margin for the branded should be anywhere from 18-20%

    — Surendra Sai

  • B2B Segment EBITDA Margin EBITDA Margin · Next year (ideal situation) · Medium confidence Around 8%
    and on the B2B it should be around 8% or so.

    — Surendra Sai

Sales Return

  • Sales Return Percentage Sales Return · Next year · High confidence Less than 20%

    Previously 20-21% → Less than 20%

    Presently we are at around 20-21% of sales return and we are pretty comfortable at this and continuing we will try to go down less than 20% for the next year.

    — Vikas Jain

New Patents

  • New Patent Launches New Patents · 2026-2027 · High confidence 3 new patents
    So, for 2026-2027 also we are going to launch 3 new patents and this will continue for next 3 to 5 years.

    — Vikas Jain

Sales & Profitability

  • Q1 FY27 Top Line and Bottom Line Sales & Profitability · Q1 FY27 · Medium confidence Better numbers
    So, yes, both with respect to top line as well as bottom line, you will see better numbers because already the prices have been increased and the placements which have started are near prices. So, you will see a better both in terms of turnover as well as profitability.

    — Vikas Jain

What to watch in Q1 FY27

Q1 FY27 Profitability Improvement

Q1 FY27 onward
Current Negative EBITDA and PAT in Q4 FY26
Target Progressive support for profitability

Why it matters

To assess the effectiveness of pricing interventions and operational discipline in turning around the company's financial performance.

We expect these pricing interventions to progressively support profitability beginning Q1 FY27 onward.

Risks & concerns

  • Adverse Climatic Conditions

    high

    Unseasonal weather, lower than expected rainfall, and floods impacted sales in key areas like Haryana and Punjab, affecting crop segments like chilli, pulses, rabi paddy, and fruit crops.

    Management acknowledged

  • Raw Material Price Volatility (Gulf Conflict)

    high

    The ongoing Gulf conflict led to sharp increases in raw material prices, particularly for solvents and formulations, impacting profitability.

    Management acknowledged

  • Impact of El Nino

    high

    The potential impact of El Nino, expected to become significant around October and affect the Rabi season, is being carefully analyzed and actions are being taken to mitigate its impact on sales.

    Management acknowledged

  • High Receivables and Balance Sheet Health

    high

    An analyst highlighted ₹500 crores in receivables against ₹1000 crores sales, with over ₹200 crores outstanding for more than 6 months, raising concerns about potential write-offs. Management attributed this to seasonal cycles and stated banks understand.

    Analyst downplayed

  • Elevated Channel Inventory

    medium

    A build-up in trade inventory led to depressed sales, which the company is addressing through policy and expense control.

    Management acknowledged

  • Counterfeiting of Popular Products

    medium

    A surge in counterfeits, especially for products like Ronfen, is being tackled by introducing high-security holograms to help customers differentiate genuine products.

    Management acknowledged

Q&A highlights

6 direct
Strategy for crop protection portfolio, distribution, and risk management Direct
For FY26-27, you would like to know what our strategy is to increase the crop protection portfolio. In terms of a portfolio, there are two actions that we are taking, and which are important. The first one is that overall, while we are taking dipstick and feedback from the farmers in the field, there is an interest in bioproducts, primarily bio stimulants. These are growth enhancers and improve yield. These products have been introduced. Currently, we have introduced five new products for FY26-27.

Analyst sought clarity on strategic direction and risk mitigation in a challenging market, which management addressed by detailing new product launches, distribution network improvements, and external risk factors like Gulf conflict and El Nino.

Asked by Sucrit D. Patil

Capital allocation, R&D funding, new formulations, hedging, and liquidity buffers Direct
Yes, just to go one by one with respect to our earlier capex, we had guided to say that we will do some sort of capex but that as was previously mentioned in our board meeting that we are postponing the newer capex which we are supposed to do in our existing plant. So, that we are keeping it on hold. The other part is on the R&D front. To bring these patented products, obviously our R&D is keep on continuing its work.

Analyst probed into financial management and funding strategies, revealing a decision to postpone capex while maintaining R&D investment and leveraging government funding for liquidity.

Asked by Sucrit D. Patil

Percentage of sales from own manufacturing vs. institutional/trading Direct
Yes, so most part of it is coming from our own manufacturing because as we said the more, we are going into patented products, the portfolio of patent products is growing. So, presently our patent product portfolio has gone up from 30% to 40% of our branded, which almost entire formulation everything is done in our own factory. So, as of today almost between 60-65% of our sales are being produced in our own factories.

Clarified the company's business model, indicating a significant portion of sales (60-65%) comes from own manufacturing, with institutional sales (B2B) accounting for 40% of revenue.

Asked by Komal

Manufacturing capacity value and capital required to replicate Direct
So, if it is similar manufacturing capacity then it has to be at least 80-100 crores to set up similar manufacturing facility. ... So, the first thing is that manufacturing facility is in terms of a formulation where we are 100% doing our own formulation facility.

Provided insight into the asset base, estimating ₹80-100 crores to replicate current manufacturing capacity, and confirmed 100% in-house formulation.

Asked by Komal

Branded vs. Institutional (B2B) margins and working capital cycle Direct
Margin front if I take branded, the margin especially in portfolio now is less and on B2B we are on average around 15-20%. ... EBITDA margin for the branded should be anywhere from 18-20% and on the B2B it should be around 8% or so.

Crucial for understanding the profitability and working capital intensity of different business segments, with branded products having higher margins but longer cycles.

Asked by Komal

High receivables, balance sheet health, potential write-offs, and need for fundraise Partial
So, last 3 years business if I take, we have just about put legal cases on around 22 crores worth of business. So, that is the, and this is consolidated for 3 years. So, if you take these 3 years number and on the overall top line, this is less than 1% of the business. So, this cycle will continue that every time after 1 year we put a legal case.

Analyst directly challenged the company's financial health due to high receivables, prompting management to explain the seasonal nature of collections and historical write-off rates, while downplaying the need for immediate fundraise.

Asked by Komal

Repeatedly missed guidance, Q4 losses, and guidance for next financial year Partial
We had guided that okay, this is a softer quarter where we might have small profit or little loss. But loss was higher because we took a conscious decision not to sell our inventory. So, since the prices were going up and we wanted to take, because earlier we lost because we had higher inventory and the price had crashed. So, we wanted to take benefit as well this year to keep our inventory and better to sell at higher price closer to the season rather than to show top line and to put higher numbers in Q4.

Analyst questioned management's credibility due to missed guidance and significant Q4 losses, leading to an explanation that Q4 losses were a strategic decision to hold inventory for better prices.

Asked by Varun Sharma

Impact of sales deferment from March to Q1 FY27 on top line and bottom line Direct
So, yes, both with respect to top line as well as bottom line, you will see better numbers because already the prices have been increased and the placements which have started are near prices. So, you will see a better both in terms of turnover as well as profitability.

Clarified that the ₹50-70 crore sales deferred from March due to pricing adjustments are expected to positively impact Q1 FY27's top line and bottom line due to increased prices.

Asked by Saket Kapoor

3 min read 7 chapters

Detailed narrative

Q4 & FY26 Performance Overview

Best Agrolife reported a challenging FY26, with consolidated revenue declining by 31% YoY to ₹1,257 crore from ₹1,814 crore in FY25. Gross margin percentage, however, slightly improved to 30% from 29% in the previous year. EBITDA for FY26 fell by 50% to ₹100 crore, resulting in an EBITDA margin of 8% compared to 11% in FY25. Profit After Tax (PAT) saw a significant decline of 87% to ₹9 crore, with PAT margin at 1%. Q4 FY26 was particularly weak, with revenue at ₹156 crore (down 43% YoY), negative EBITDA of ₹27 crore, and negative PAT of ₹37 crore.

Market Challenges & Operational Discipline

The company faced significant headwinds in FY26, including adverse climatic conditions, unseasonal weather, and uneven pest incidences, which impacted sales in key regions like Haryana and Punjab. Elevated channel inventory levels, weak dealer liquidity, and volatility in raw material prices further exacerbated the situation. In response, management focused on strengthening long-term fundamentals, implementing calibrated pricing actions, and controlling inventory and expenses. A conscious decision was made in March to hold inventory rather than sell at lower prices, impacting Q4 revenue but aiming to protect future profitability.

Product Portfolio Expansion & Innovation

Best Agrolife continued its focus on building a stronger patented portfolio. In FY26, the company launched three patented products: Bestman, Fetagen, and Shot Down, which received positive farmer acceptance. The R&D efforts yielded 7 combination patents and 1 nano urea patent. For FY27, the company plans to launch additional patented products including Fluzam, Midcotin, Cubax Power Extra, and Trishanku, and produce at least 4 new generation molecules at its Gajraula facility, reinforcing its commitment to innovation and 'Atmanirbhar' manufacturing.

Working Capital & Inventory Management

A key operational priority was working capital optimization and inventory reduction. Inventory levels were successfully reduced from ₹958 crore in FY24 to ₹773 crore in FY25, and further to ₹651 crore as of March 31, 2026. This reduction was achieved through tighter procurement planning, calibrated production schedules, and rationalization of slower-moving inventory. To mitigate rising input costs, the company implemented two rounds of price increases in April and May 2026, expecting these interventions to support profitability from Q1 FY27 onwards.

Receivables and Balance Sheet Concerns

An analyst raised concerns about the company's balance sheet, highlighting ₹500 crores in receivables against ₹1000 crores in sales, with over ₹200 crores outstanding for more than 6 months. Management clarified that high receivables in March are seasonal, with collections expected by June-July. They stated that doubtful debts over the last 3 years were less than 0.7% and that banks understand this cyclical pattern. The company also noted its bank facility utilization is 85-90%, with 10% still available, and is leveraging government funding for additional liquidity.

International Expansion & Brand Protection

Best Agrolife is actively pursuing international registrations, with two registrations in Mexico in final approval stages, progress in Sri Lanka for patented molecules, and a first registration in Thailand. Plans are also underway to establish a subsidiary in Brazil. Domestically, the company is addressing the surge in counterfeits for popular products like Ronfen by introducing high-security holograms. Additionally, new labels will display the mode of action (IRAC, HRAC, FRAC) to help farmers combat pest resistance effectively.

Outlook & Future Strategy

Despite the challenging external environment, Best Agrolife believes it is structurally better positioned for FY27. The company expects improved profitability from Q1 FY27 due to calibrated pricing actions, new bio products, and patented products. The strategy includes strengthening the B2B segment by manufacturing active ingredients and technicals for external sales, not just captive consumption, aiming for a more fixed payment schedule and improved top and bottom lines. Management did not provide specific numerical guidance for FY27 but expressed confidence in a better year ahead.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Chemicals earnings calls