Dharmaj Crop Guard Limited — Q4 FY25 earnings call

Call held 3 Jun 2025

Management summary

Dharmaj Crop Guard Limited reported robust revenue growth in Q4 and FY25, with topline reaching ₹951 crores (up 45% YoY) despite a challenging agrochemical market. The new Sayakha facility ramped up well, contributing ₹217 crores, though it incurred losses due to pricing pressure and initial expenses. The company improved its debt-to-equity ratio and cash conversion cycles, and is optimistic about future growth driven by new products and recovering export markets.

Highlights

  • FY25 revenue from operations of ₹951 crores, up 45% YoY, despite industry headwinds.

  • Q4 FY25 revenue grew significantly by 81% YoY to ₹210 crores.

  • Volume growth of 25-30% achieved across majority products.

  • Sayakha facility ramped up well, generating ₹217 crores in its first full year.

  • Debt-to-equity ratio improved to 0.29 from 0.31, and cash conversion cycles improved to 67 days from 84 days.

Concerns

  • Strong revenue growth did not translate into higher profitability due to lower product prices and front-loaded expenses.

  • Sayakha facility contributed to an EBITDA loss of ₹7 crores and an adjusted PBT loss of ₹25 crores in FY25.

  • Ongoing pricing pressure and overcapacity in the agrochemical industry impacting margins.

  • Export business faced headwinds due to social and political disruptions in key markets.

Key financials

4 periods

Q4 FY25

  • Revenue from Operations
    ₹210 Cr
    YoY +81%

FY25

  • Revenue from Operations
    ₹951 Cr
    YoY +45%
  • EBITDA Margin
    9.5%

Technical, Adjusted, FY25

  • PBT Loss
    ₹25 Cr

Technical, FY25

  • Gross Margin
    19%
  • EBITDA Loss
    ₹7 Cr

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

  • Sayakha Facility (Technical)
    ₹217 Cr Revenue (FY25)₹200 Cr Domestic Sales (FY25)4,700 tons Production (FY25)
  • Formulation Business
    16% EBITDA Margin

Capital allocation

high confidence
  • Capex ₹15 Cr
    • New herbicide unit ₹15 Cr
    Ramesh Talavia: "So, in this we will require CAPEX of Rs. 15 crore, this year will go in this and next year we will use its capacity."
  • Debt Debt disclosed Cost 9%
    • Rate reset Effective interest rate of 4-5% after 7% subsidy on 9% interest rate.
    Ramesh Talavia: "Our current interest rate is around 9% and 7% subsidy."
  • Liquidity Liquidity disclosed Healthy liquidity supported by unutilized working capital.
    Vikas Agarwal: "Our debt servicing ratio remains robust and we continue to maintain healthy liquidity supported by unutilized working capital."

Guidance & targets

Revenue

  • Topline Growth Revenue · FY26 · High confidence 20% to 25%
    Ramesh Talavia: "Topline growth as we expected for FY'26 is 20% to 25% in all segments, B2B, B2C and some export also."

    — Ramesh Talavia

  • Technical Segment Revenue Revenue · FY26 · High confidence Rs. 250 crores to Rs. 260 crores
    Ramesh Talavia: "No, it will be possible around Rs. 250 crores to Rs. 260 crores."

    — Ramesh Talavia

  • Long-term Revenue Target Revenue · by 2030 · High confidence Rs. 2,000 crore
    Management: "This target of Rs. 2,000 crore was defined by us in 2018 that in 2030 we will achieve Rs. 2,000 crore in 2030."

    — Management

Profitability

  • EBITDA Margin Improvement Profitability · FY26 · High confidence around 1%
    Ramesh Talavia: "Our EBITDA margin will also improve around 1%."

    — Ramesh Talavia

  • Overall EBITDA Margin Profitability · FY26 · High confidence around 9.5%
    Ramesh Talavia: "Sir, it will be 1% from formulation, overall it will be improved around 9.5%."

    — Ramesh Talavia

  • Long-term EBITDA Margin Profitability · by 2030 · High confidence 13%
    Ramesh Talavia: "Yes, 13%."

    — Ramesh Talavia

Growth

  • Branded Formulation Growth Growth · FY26 · High confidence 20% to 25%
    Management: "If we look into formulations in last year, because of price pressure it was 10% normally you can take growth of 25%. Price pressure is stable now, so we can predict of volume."

    — Management

Capacity

  • Sayakha Production Capacity · FY26 · High confidence 5,000-5,500 tons

    Previously 4,700 tons → 5,000-5,500 tons

    Ramesh Talavia: "Like, we did production of 4,700 tons so this year naturally we will go up till 5,000, 5,500 tons."

    — Ramesh Talavia

Exports

  • Sayakha Exports Exports · FY26 · High confidence Rs. 60 crore to Rs. 75 crore
    Ramesh Talavia: "Our exports could be around Rs. 60 crore to Rs. 75 crore."

    — Ramesh Talavia

What to watch in Q1 FY26

FY26 Topline Growth

next quarter (Q1 FY26)
Current FY25: 45% YoY
Target 20-25% YoY

Why it matters

To verify if the company is on track to achieve its stated revenue growth targets for the fiscal year.

Ramesh Talavia: "Topline growth as we expected for FY'26 is 20% to 25% in all segments, B2B, B2C and some export also."

Risks & concerns

  • Pricing Pressure in Agrochemical Industry

    high

    Lower product prices compressed margins, especially in the new active ingredient segment, despite strong revenue growth.

    Management acknowledged

  • Export Market Disruptions

    medium

    Social and political disruptions in key export markets like Bangladesh created headwinds in the early part of the year.

    Management acknowledged

  • Irregular Monsoon Impact

    medium

    Irregular monsoon during the kharif season (Aug-Sep '24) impacted business, though partly offset by strong rabi season.

    Management acknowledged

  • Overcapacity in Indian Agrochemicals

    medium

    A bit of overcapacity in the Indian market contributes to pricing pressure.

    Management acknowledged

Q&A highlights

8 direct
FY26 Topline and EBITDA Margin Outlook Direct
Ramesh Talavia: "Topline growth as we expected for FY'26 is 20% to 25% in all segments, B2B, B2C and some export also." and "Our EBITDA margin will also improve around 1%.

Analyst sought clear forward guidance on key financial metrics for the upcoming fiscal year, which management provided with specific ranges.

Asked by Ankit Manocha

Impact of China's Tariffs on Pricing and Products Direct
Ramesh Talavia: "No, we do not import any finished products from China. We import raw materials. In our industry there will be no harm or impact.

Analyst probed a significant macro-economic risk (China tariffs) and management clarified their limited direct exposure due to their import/product mix.

Asked by Ankit Manocha

Sayakha Facility's Contribution to Losses and Overall EBITDA Direct
Ramesh Talavia: "Excluding Sayakha, the EBITDA margin will be around 11%.

Analyst sought to understand the drag from the new Sayakha plant on overall profitability, providing a clearer picture of core business margins.

Asked by Ankit Manocha

Sayakha Plant's Full Potential and Export Targets Direct
Ramesh Talavia: "Our exports could be around Rs. 60 crore to Rs. 75 crore.

Analyst inquired about the future revenue potential and export contribution from the new technical plant, providing specific targets for growth drivers.

Asked by Rajat Setiya

Long-term Revenue Target (₹2,000 cr by 2030) and CAPEX Strategy Direct
Ramesh Talavia: "So, we are taking conservative growth, keep doing 20%, 30% average growth and we can complete our vision of crossing Rs. 2,000 in 2030 on safe side." and "There will be no major CAPEX.

Analyst questioned the feasibility of the long-term target given past growth, and management clarified their conservative approach and minimal CAPEX requirement for this target.

Asked by Sanjay

Formulation Business Capacity Utilization and Product Mix Shift Direct
Ramesh Talavia: "And we are focusing on valuable products, that is why you seeing the capacity utilization of formulation business less.

Analyst sought clarification on seemingly low capacity utilization in formulation, revealing a strategic shift towards higher-margin products and away from commodity items.

Asked by Pavan Kumar

Status of Government Subsidy Direct
Ramesh Talavia: "Subsidy has been approved, the process will start now. We have got the approval from government's side.

Analyst followed up on a previously discussed financial benefit, confirming its approval and upcoming realization, which impacts the effective cost of debt.

Asked by Smit Shah

Institutional Business Margin and Sales Growth Direct
Ramesh Talavia: "Generally, in institutional margin is less and major sales growth was from technical ingredients. There was a pricing pressure and institutional sales is more. B2C is less in last quarter.

Analyst questioned institutional margin, leading to management's explanation of sales mix shift towards institutional and technical ingredients, impacting overall margins.

Asked by Madhur Rathi

2 min read 5 chapters

Detailed narrative

Robust Revenue Growth Amidst Industry Headwinds

Dharmaj Crop Guard Limited demonstrated strong revenue performance in Q4 and FY25, with Q4 revenue from operations increasing by 81% year-on-year to ₹210 crores. For the full fiscal year 2025, the company achieved a topline of ₹951 crores, marking a healthy 45% growth over the previous year. This growth was achieved despite a challenging agrochemical industry environment characterized by pricing pressure and disruptions in key export markets, showcasing the company's resilience and market share gains.

Sayakha Facility's Initial Performance and Profitability Impact

The new Sayakha facility, in its first full year of operation, contributed ₹217 crores to the revenue, with domestic sales accounting for ₹200 crores. While the facility ramped up well, its profitability was impacted by industry-wide pricing pressure and front-loaded expenses. Consequently, Sayakha contributed to an EBITDA loss of ₹7 crores and an adjusted PBT loss of ₹25 crores for FY25, highlighting the initial investment phase's drag on overall margins.

Strategic Shift Towards Higher-Margin Products and Margin Outlook

The company is strategically shifting its formulation business focus from commodity products to more valuable, higher-margin offerings. This shift, while leading to lower capacity utilization in formulation (50-65% due to seasonality), is expected to improve overall profitability. Management guided for an overall EBITDA margin improvement of 1% in FY26, targeting around 9.5%, and a long-term EBITDA margin of 13% with a ₹2,000 crore revenue target by 2030.

Improved Working Capital and Debt Management

Dharmaj Crop Guard Limited successfully improved its cash conversion cycles from 84 days to 67 days year-on-year, indicating better operational efficiency. The debt-to-equity ratio also saw a slight improvement, reducing to 0.29 from 0.31. The company's current interest rate stands at approximately 9%, which is effectively reduced to 4-5% after considering a 7% government subsidy of ₹2.5 crores, which has been approved and is in the process of realization.

Future Growth Drivers and Capex Plans

Looking ahead, the company is optimistic about achieving 20-25% topline growth in FY26 across all segments, supported by favorable monsoon forecasts and recovering export markets. They plan to increase Sayakha's production from 4,700 tons to 5,000-5,500 tons in FY26 and target ₹60-75 crores in exports from this facility. A CAPEX of ₹15 crores is planned for a new herbicide unit, to be spent over this year and next, further supporting capacity expansion and product diversification.

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