Dharmaj Crop Guard Limited — Q2 FY26 earnings call

Call held 17 Nov 2025

Management summary

Dharmaj Crop Guard reported strong H1 FY26 results with 26% revenue growth to INR 715 crores and net profit of INR 49.9 crores. Despite Q2 being sequentially lower due to early and erratic monsoon, the company saw robust volume growth across segments and improved technical gross margins. Management remains optimistic for H2, projecting 20-25% overall growth and 9-9.5% EBITDA margins for the full year.

Highlights

  • H1 FY26 revenue grew 26% YoY to INR 715 crores, demonstrating strong resilience despite monsoon impact.

  • Net profit for H1 FY26 increased significantly to INR 49.9 crores from INR 36.1 crores in H1 FY25.

  • Strong volume growth of 30-35% overall in H1 FY26, with technicals growing 30% and formulations 35%.

  • Technical gross margin improved to 22% in H1 FY26, up from 19% in FY25.

  • Export institutional business showed robust 51% YoY expansion in H1 FY26.

Concerns

  • Q2 FY26 revenue was sequentially lower than Q1, an uncommon trend, due to early monsoon preponing Kharif demand.

  • Erratic and uneven monsoon in late August and September led to crop losses and subdued agrochemical demand.

  • Q2 EBITDA margins compressed sequentially and YoY due to lower brand formulation contribution, higher active ingredient/export share, and increased operational expenses.

  • Some pricing pressure observed in certain technical products in the last one or two months.

  • Trade receivables growth (30%) outpaced revenue growth (26%) in H1 FY26 due to monsoon delays.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹347 Cr
    YoY +12%

H1 FY26

  • Revenue
    ₹715 Cr
    YoY +26%
  • Net Profit
    ₹49.9 Cr
    YoY +38.2%
  • Technical GP Margin
    22%
  • B2C Formulation GP Margin
    40%
  • Export GP Margin
    18%

What they filed

Q1 FY27: revenue up 4.1%, net profit up 15.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue311 175 210 367 347 +12%190 +9%234 +11%382 +4%
EBITDA34 10 4 51 32 −6%7 −30%11 +175%57 +12%
Net profit21 1 -2 33 17 −19%1 +0%4 +300%38 +15%
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

  • Brand Formulation
    17% YoY Growth (H1 FY26)
  • Domestic Institutional Formulation
    21% YoY Growth (H1 FY26)
  • Active Ingredient Segment
    44% YoY Growth (H1 FY26)
  • Export Institutional Business
    51% YoY Growth (H1 FY26)

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Tentative planning for a technical plant for herbicides ₹75 Cr
    In this, the CAPEX for technicals tentative, the investment could be around Rs. 75 to Rs. 100 crores.
  • Debt Debt disclosed
    About debt, you are asking? on debt reduction, actually right now, we have got a subsidy on that. So, debt reduction, it will go as per schedule only.

Guidance & targets

Revenue

  • Overall Revenue Growth Revenue · FY26 · High confidence 20-25%
    We are very much sure that whatever the guidelines we have given, that is 20% to 25% of the growth that we will definitely achieve.

    — Vikas Agarwal

  • Technical Plant Revenue Revenue · FY26 · High confidence INR 250-260 crores
    For FY '26, our revenue for technical plant will be around INR 250 crores to INR 260 crores.

    — Vikas Agarwal

  • Rabi Season Business Growth Revenue · Rabi Season FY26 · High confidence 20-25%
    Pricing-wise we are fully optimistic and confident in this Rabi season that the business will definitely grow compared to last year, around 20 to 25%.

    — Ramesh Talavia

  • Overall Revenue Target Revenue · FY26 · High confidence INR 1,150-1,200 crores
    So overall, it would be INR 1,150 crores to INR 1,200 crores.

    — Vikas Agarwal

  • Long-term Business Vision Revenue · 2030 · Medium confidence INR 2000 crore business
    In 2030, we are running with a vision that we see a 2000 crore business, and in that itself we are confident.

    — Ramesh Talavia

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 9-9.5%

    From 8% today

    And our EBITDA margin growth also will increase by 1% to 1.5% during the year.

    — Vikas Agarwal

Capacity

  • Saykha Capacity Utilization Capacity · FY27 · High confidence 70% plus

    From 65% today

    For FY'27, our utilization will be 70% plus.

    — Ramesh Talavia

What to watch in Q3 FY26

Rabi Season Business Performance

next quarter
Current Optimistic for growth compared to last year
Target 20-25% growth

Why it matters

Rabi season performance is key to achieving full-year growth targets, especially after a challenging Q2.

Regarding the Rabi season, this year our Rabi season will be positive because the rainfall has been good, all dams etc., are full, so irrigation facilities are full.

Risks & concerns

  • Erratic and uneven monsoon

    high

    Late August and September monsoon led to crop losses and subdued agrochemical demand, impacting Q2 sales.

    Management acknowledged

  • Credit cycle, monsoon dependency, and farmer pricing pressure

    high

    External risks in the industry that could impact sustainable growth.

    Analyst acknowledged

  • Lower cash activity and reduced insecticide spraying

    medium

    Heavy rainfall in September led to lower cash activity and reduced insecticide spraying, further impacting demand.

    Management acknowledged

  • Pricing pressure in some technical products

    medium

    A slight decrease in prices for some products observed in the last one or two months, though overall prices are stable.

    Management acknowledged

  • Localized flooding in Northern India

    low

    Flooding in Punjab, northern Rajasthan, and neighboring states had some incremental impact, despite primary concentration in Western and Central India.

    Management acknowledged

Q&A highlights

6 direct
H2 performance and full-year guidance Direct
In H2, we are confident to our growth planning in this year, current year because of the last year comparatively, Rabi season gave some lower part and this year is we are highly optimistic to grow our business.

Analyst sought clarity on future outlook given Q2 challenges; management reiterated confidence in 20-25% growth and 9-9.5% EBITDA margin for FY26.

Asked by Shlok Akolia

Brazil subsidiary registration progress Partial
The planning we had for our Brazil subsidiary is currently on hold, meaning we have postponed it. First, our registration will come through. Then we will register the subsidiary there and start our business.

Revealed a delay in international expansion plans, pushing back the establishment of the Brazil subsidiary by at least a year.

Asked by Vipul Goswami

EBITDA margin compression from Q2 FY25 to Q2 FY26 Direct
The GP margin we are seeing on pricing, we should actually compare H1 to H1. If you see, when we compare H1 to H1, the margin has only increased from last time.

Management clarified that H1 comparison shows margin improvement, addressing concerns about sequential Q2 margin decline.

Asked by Vipul Goswami

Technical plant EBITDA break-even status Direct
EBITDA right now, it is already at break-even. At the EBITDA level, it was already break-even. So for the full year, we presume that it will be positive only; it will definitely break even at the EBITDA level.

Confirmed that the Saykha technical plant is already at EBITDA break-even and is expected to be positive for the full year, indicating successful ramp-up.

Asked by Yogansh Jeswani

Pricing pressure in technical business and China's impact Direct
In our product portfolio, China actually has no role. In fact, in exports, we have even set up two-three customers in China now, so we have actually started exporting to China as well.

Management asserted that China's overcapacity is not impacting their business and they are actively exporting to China, countering a common sector concern.

Asked by Ankit Gupta

Stagnation in branded formulation business growth Partial
If you see year-on-year, year-on-year growth... our growth was around 20% last year, last year also growth was around 20%, and this year also we are growing at 18% in H1 currently. There's only one quarter on a year-on-year basis, which is Q2, where we were almost stagnant, almost parallel.

Management acknowledged Q2 stagnation but clarified that H1 growth for branded formulation was 18%, indicating it's not a systemic issue across all quarters.

Asked by Smit Shah

Lower technical gross margin compared to peers Direct
The reason for this is currently, our technical sales are mostly in the domestic market, in India only, not in exports. The companies you see that have major exports, they are in regulated countries where they have their own registrations. They get higher margins there.

Explained the margin difference by highlighting the domestic focus of their technical sales, implying future margin expansion as export registrations in regulated markets come through.

Asked by Smit Shah

Trade receivables growth outpacing revenue growth Direct
This trend was actually it is agrochemical industry normally if you see, so in H1, inventory and receivables are always high actually. So, it is the trend thing. However, by 50 to 20 days because there is a delay in monsoon, so some receivables has increased, but it will be taken care in H2.

Addressed concerns about working capital efficiency, attributing the trend to industry seasonality and monsoon delays, with an expectation of improvement in H2.

Asked by Sidh

3 min read 7 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

Dharmaj Crop Guard reported a robust H1 FY26, with revenue reaching INR 715 crores, marking a 26% year-on-year growth. For Q2 FY26, revenue stood at INR 347 crores, reflecting a 12% YoY growth. Net profit for H1 FY26 significantly increased to INR 49.9 crores, up from INR 36.1 crores in H1 FY25. Despite Q2 revenue being sequentially lower than Q1, which is an uncommon trend for the company, management attributed this to an early monsoon preponing Kharif season demand.

Segmental Performance and Volume Growth

The company's formulation business remained a mainstay, with brand formulation growing 17% YoY and domestic institutional formulation growing 21% YoY in H1 FY26. The active ingredient segment scaled up meaningfully, posting 44% YoY sales growth. Export institutional business, which faced challenges last year, returned to growth with a 51% YoY expansion in H1 FY26. Overall, the company achieved a volume growth of 30-35% in H1 FY26, broken down into 30% for technicals and 35% for formulations.

Margin Dynamics and Profitability Outlook

Q2 EBITDA margins moderated sequentially and YoY due to a lower contribution from brand formulation and a higher share of active ingredients and exports, along with increased operational expenses. However, on an H1 FY26 to FY25 comparison, margins improved slightly, driven by higher scale and operating leverage. The technical gross margin for H1 FY26 was 22%, an improvement from 19% in FY25. Management expects overall EBITDA margins to be 9-9.5% for FY26, an increase of 1-1.5% from the previous year.

Capacity Utilization and Expansion Plans

The Saykha facility's current capacity utilization stands at around 65%, with a target to reach over 70% by FY27. Management indicated that the technical plant is already at EBITDA break-even and is expected to be positive for the full year. Looking ahead, the company is tentatively planning for a technical plant for herbicides, with an estimated CAPEX of INR 75-100 crores. This is driven by the observation that the growth rate of herbicides is higher due to labor shortages and increasing labor costs.

International Expansion and Export Strategy

The company's plan for a Brazil subsidiary is currently on hold, with registration expected next year before establishing the subsidiary. For highly regulated countries like Brazil, Poland, and the US, the registration process for technical products can take 2-4 years. However, registrations for 4 technical products in Brazil are in final stages, expected within a year. The company is also focusing on other countries with immediate business opportunities and recently secured registration for a formulated product in Russia, with business expected to start this year.

Market Dynamics and Product Mix

While insecticides currently dominate the product mix, management noted that the growth rate of herbicides is higher due to labor shortages and increasing adoption by farmers. The company's strategy involves backward integrating and enhancing technical capacity for products with high volume in B2C and B2B formulation, moving away from a primary focus on Pyrethroids to mitigate margin volatility. The company's long-term vision is to achieve INR 2000 crores in business by 2030.

Capital Allocation and Debt Management

The company received an interest subsidy of approximately INR 3.53 crores in November, pertaining to the period from January 2024 to April 2025. Management stated that debt reduction will proceed as per schedule, indicating no immediate plans for prepayment due to the interest subsidy benefit. Trade receivables grew 30% in H1 FY26, outpacing revenue growth of 26%, which management attributed to industry seasonality and monsoon delays, expecting improvement in H2.

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