Insecticides (India) Limited — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

Insecticides (India) Limited delivered strong Q1 FY26 results, with significant growth in revenue, EBITDA, and PAT, primarily driven by its premiumization strategy and new product launches. Despite uneven monsoon patterns impacting certain crop segments and muted B2B sales, the company maintained healthy margins and is optimistic about future growth, supported by capacity expansion and strategic partnerships.

Highlights

  • Revenue grew 5.17% YoY to ₹691 crores, driven by strong demand.

  • EBITDA increased 18.05% YoY to ₹85 crores, with margin expanding by 122 bps.

  • PAT grew 18.36% YoY to ₹58 crores, with margin expanding by 100 bps.

  • Premium products, including Focused Maharatnas and Maharatnas, achieved almost 20% growth in Q1 FY26.

  • New product launches from last year contributed ₹42 crores in Q1, exceeding the full-year contribution of ₹34 crores.

Concerns

  • Uneven monsoon distribution and dry spells impacted herbicide demand for dry crops like cotton and soybean.

  • B2B sales were muted in Q1, experiencing an 8-9% decline.

  • The company anticipates ₹60-70 crores in sales returns for Q1 products to be processed in Q2.

Key financials

  1. Revenue ₹691 Cr +5.2%YoY
  2. Gross Profit ₹202 Cr
  3. Gross Profit Margin 29.2%
  4. EBITDA ₹85 Cr +18.1%YoY
  5. PAT ₹58 Cr +18.4%YoY

What they filed

Q1 FY27: revenue down 11.4%, net profit down 24.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue627 358 359 691 638 +2%385 +8%426 +19%612 −11%
EBITDA90 31 28 85 89 −1%27 −13%25 −11%68 −20%
Net profit61 17 14 58 59 −3%10 −41%12 −14%44 −24%
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

  • B2C Sales
    75% Share of Total Sales58% Premium Products Share42% Other Products Share
  • B2B Sales
    23% Share of Total Sales
  • Export Sales
    2% Share of Total Sales

Capital allocation

high confidence
  • Capex Capex disclosed
    • Completion of Dahej Part 1 technical plant
    • Sotanala formulation unit (target start next kharif season)
    • Sotanala technical plant Phase 1 (target start end of next fiscal)
    We have completed our capex of Dahej Part 1. So the technical plant has already started the production. And now we are working on Sotanala, which is going to support us for further expansions. So Sotanala plan is like we are trying to establish here the formulation unit as well as the technical unit. For formulation unit target is to start in the next kharif season. And by the end of the next fiscal, we should be starting our technical plant Phase 1.
  • M&A Corteva Joint venture · Signed

    Distribution of SPARCLE product in India

    And we have also announced launch of one more product, SPARCLE, which has come through Corteva, which is a MNC, and we have tied up with them to distribute this product in the country, which is for, again, rice, and it has started very well.
  • M&A OAT Agrio Joint venture · Ongoing development

    R&D for new generation products, patent filing, and product launch

    First product (insecticide) expected to launch in 2026.

    Yes. We have filed about a dozen patents from this JV. The first product, we are planning to make a filing in the year '25, and there can be a launch in the 1 year itself. That is the vision. So the first product will be coming. ... It's an insecticide actually. So as it gets launched, the information will be public. So the launch is not in year '25, it will be in the year '26.

Guidance & targets

Profitability

  • EBITDA Margin Improvement Profitability · Next 2-3 years · Medium confidence 100 bps improvement annually
    And for the years to come, definitely, we keep a target of 100 basis points, but it will be a little ugly if I say 100 basis points every year. But it looks possible actually to me if we talk about 2 to 3 years. So it looks achievable.

    — Rajesh Aggarwal

  • EBITDA Margin Maintenance Profitability · FY26 · High confidence Maintain Q1 FY26 level
    I believe that I should be able to sustain what I have achieved in Q1.

    — Rajesh Aggarwal

Revenue

  • Kaeros Business Revenue Revenue · FY26 · High confidence ₹100 crores
    And this year, I don't want to give a number, but definitely, we'll be targeting about INR100 crores business from Kaeros in totality.

    — Rajesh Aggarwal

  • Kaeros Business Revenue Revenue · FY27 · High confidence ₹150-200 crores
    But I can say that in FY '27, we should be able to do about INR150 crores to INR200 crores from Kaeros.

    — Rajesh Aggarwal

  • Q2 Sales Performance Revenue · Q2 FY26 · Medium confidence Plus/minus Q1 FY26 sales
    it's difficult to tell exact number at the moment, but you can consider that it should be plus/minus Q1 itself. It will be a repeat of Q1 broadly.

    — Rajesh Aggarwal

  • B2C Business Growth Revenue · Ongoing · High confidence Double-digit growth
    In terms of B2C, yes, we'll have a double-digit growth in our B2C business.

    — Rajesh Aggarwal

  • Premium Products Growth Revenue · Ongoing · High confidence 20% growth
    And we are trying to get 20% growth from our premium products. That is the vision.

    — Rajesh Aggarwal

  • Altair Revenue Potential Revenue · When 0.5 million acres covered · High confidence ₹70 crores
    The maturity revenue, gentleman, at when we treat 0.5 million acres would be in the range of close to INR70 crores.

    — Dushyant Sood

  • Overall Growth Revenue · Ongoing · High confidence 10% plus/minus
    Total growth, I maintain my vision what we had targeted in the beginning about 10% plus/minus. So we'll maintain that.

    — Rajesh Aggarwal

Market Share

  • Altair Acres Covered Market Share · 2-3 years · High confidence 0.5 million acres
    Going forward in 2 to 3 years' time frame, our maturity volumes stand at hitting roughly 0.5 million acres.

    — Dushyant Sood

Product Launch

  • First JV Product Launch (OAT Agrio) Product Launch · 2026 · High confidence Launch
    So the first product, yes, as expected in year '26.

    — Rajesh Aggarwal

Sales

  • Sales Return for Q1 Products Sales · Q2 FY26 · High confidence ₹60-70 crores
    So the good return, which we may expect in Q2 may be to an extent of about INR60 crores, INR70 crores.

    — Rajesh Aggarwal

Imports

  • Import Level Imports · Ongoing · High confidence ₹500-600 crores
    But we are not able to go below INR500 crores. Sometimes we touch INR450 crores in certain years, but I've seen that INR500 crores, INR600 crores level is a normal level, which is our import.

    — Rajesh Aggarwal

What to watch in Q2 FY26

Kaeros Business Revenue Progress

Next quarter / FY26
Current Just introduced in kharif season
Target Progress towards ₹100 crores for FY26

Why it matters

To assess the ramp-up and contribution of the newly integrated Kaeros business towards its ambitious FY26 target.

And this year, I don't want to give a number, but definitely, we'll be targeting about INR100 crores business from Kaeros in totality.

Risks & concerns

  • Uneven monsoon distribution impacting crop demand

    medium

    Dry spells and extra wet spells in various regions impacted certain crops like cotton and soybean, leading to uneven herbicide demand.

    Management acknowledged

  • Anticipated sales returns impacting Q2 financials

    medium

    The company expects ₹60-70 crores in sales returns for Q1 products to be processed in Q2, for which provision has been made.

    Management acknowledged

  • Muted B2B sales performance

    low

    B2B sales were down 8-9% in Q1, though management expects recovery in Q2 and aims to beat last year's B2B sales in 6 months.

    Management acknowledged

  • Raw material price volatility

    low

    While raw material prices have been stable post-COVID, management notes difficulty in predicting future trends and potential for price rises due to shortages.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
EBITDA margin trajectory with premiumization Direct
And for the years to come, definitely, we keep a target of 100 basis points, but it will be a little ugly if I say 100 basis points every year. But it looks possible actually to me if we talk about 2 to 3 years. So it looks achievable.

Management provided a specific long-term target for EBITDA margin improvement, indicating confidence in the premiumization strategy.

Asked by Bhargav from Ambit Asset Management

Performance and guidance for Kaeros business Direct
But I can say that in FY '27, we should be able to do about INR150 crores to INR200 crores from Kaeros. And this year, I don't want to give a number, but definitely, we'll be targeting about INR100 crores business from Kaeros in totality.

Management provided specific revenue targets for the newly integrated Kaeros business for both FY26 and FY27, offering clear growth expectations.

Asked by Bhargav from Ambit Asset Management

Herbicide demand scenario and Q2 outlook Partial
Quarter 2 generally is the big quarter for us, which is almost at par or a little higher than Q2. From last 2 years, it was a little muted than Q2. So it's difficult to tell exact number at the moment, but you can consider that it should be plus/minus Q1 itself. It will be a repeat of Q1 broadly.

Management acknowledged mixed herbicide demand due to uneven monsoons but provided a directional outlook for Q2 sales, suggesting it will be similar to Q1.

Asked by Bharat from Fair Value Capital

Inventory position in the market Direct
I don't think that there is any heavy inventory position in the market because at this moment, there is good demand across the country. So whatever is there it will keep on like go in to the market.

Management reassured that there is no significant inventory buildup in the market, implying healthy demand and efficient inventory management.

Asked by Bharat from Fair Value Capital

B2B sales performance versus premiumization strategy Partial
It is a game of psychology, because I don't know sometimes why my competition is thinking that the sales is slow and they go slow in their numbers. This year, again, yes, we have lost 10% a little lesser, 8%, 9% sales are lesser in B2B segment, and we have got about 8%, 9% no, a little more 12% growth in the B2C business.

Management explained the divergence in B2B and B2C growth, attributing B2B's muted performance to market psychology while emphasizing strong B2C growth.

Asked by Bharat from Fair Value Capital

Update on R&D pipeline with OAT Agrio JV Direct
Yes. We have filed about a dozen patents from this JV. The first product, we are planning to make a filing in the year '25, and there can be a launch in the 1 year itself. That is the vision. So the first product will be coming. ... It's an insecticide actually. So as it gets launched, the information will be public. So the launch is not in year '25, it will be in the year '26.

Management provided a clear timeline for the launch of the first product from the OAT Agrio JV, indicating progress in their R&D pipeline.

Asked by Ashwini Agarwal from Demeter Advisors LLP

Sales return for Q1 products expected in Q2 Direct
So the good return, which we may expect in Q2 may be to an extent of about INR60 crores, INR70 crores. So the provision is already made for that, and we are trying to replace that with various other products because there is good demand for, as I told, the rice herbicides and then all insecticides and fungicides, so that we'll cover that actually.

Management quantified the expected sales returns for Q1 products in Q2, providing transparency on a potential short-term impact and their strategy to mitigate it.

Asked by Saket Kapoor from Kapoor & Co.

Comparison of margin profile with other listed players Evasive
I don't want to compare myself. Like, it's a wrong question to answer here. But I would say that we are one of the strongest company in South India. Nobody is in comparison, whatever names you have taken. All 3 put together cannot compete with us.

Management explicitly declined to compare with peers, indicating a reluctance to discuss competitive positioning or specific margin benchmarks against other companies.

Asked by Saket Kapoor from Kapoor & Co.

3 min read 7 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Insecticides (India) Limited reported a strong Q1 FY26, with revenue growing 5.17% YoY to ₹691 crores from ₹657 crores in Q1 FY25. Gross profit increased to ₹202 crores, with the margin improving from 27.6% to 29.2%. EBITDA saw an 18.05% YoY rise to ₹85 crores from ₹72 crores, reflecting a 122 bps margin expansion. Net profit (PAT) also grew significantly by 18.36% YoY to ₹58 crores from ₹49 crores, with a 100 bps improvement in PAT margin.

Premiumization Strategy and Product Portfolio

The company's strategic shift towards premiumization is yielding positive results, with premium products growing by almost 20% in Q1 FY26. New launches from the previous year, including Altair, Centran SC, and Brahmos, contributed ₹42 crores in Q1 alone, surpassing the ₹34 crores achieved in the entire last fiscal year. Altair, a patented herbicide for rice, is being aggressively promoted across 900+ villages and is expected to cover 0.5 million acres, generating ₹70 crores in revenue within 2-3 years.

Monsoon Impact and Market Dynamics

The early onset of the Southwest monsoon and healthy reservoir levels provided a strong start to the season. However, uneven distribution with dry spells in some regions impacted herbicide demand for dry crops like cotton and soybean. Conversely, rice and maize crops are performing very well. Overall demand remains robust, with factories operating at 100% capacity, and the company expects Q2 sales to be broadly similar to Q1.

R&D and Strategic Partnerships

Insecticides (India) is actively expanding its product pipeline through R&D and strategic collaborations. The joint venture with OAT Agrio has filed about a dozen patents, with the first insecticide product expected to launch in 2026. Additionally, the company has tied up with Corteva to distribute SPARCLE, a new product for rice, further strengthening its market offerings and solution-provider approach to farmers.

Capacity Expansion and Operational Efficiency

The Dahej Part 1 technical plant has been completed and commenced production, contributing to the manufacturing of new products. The company is also progressing with its Sotanala expansion plan, targeting the start of a formulation unit by the next kharif season and Phase 1 of a technical plant by the end of the next fiscal. These expansions aim to support future growth and product launches.

Sales Mix and Margin Outlook

In Q1 FY26, B2C sales constituted 75% of total sales, with 58% of B2C sales coming from premium products. B2B sales accounted for 23% and exports for 2%. While B2B sales were muted, declining 8-9% in Q1, management anticipates a recovery in Q2. The company aims to sustain the EBITDA margin achieved in Q1 throughout FY26, driven by the premium product mix and continuous focus on margin expansion, despite the lower margins typically associated with B2B sales.

Raw Material and Import Management

Raw material prices have remained largely stable since the post-COVID decline, with minimal fluctuations. Management acknowledges the inherent difficulty in predicting future price trends but is prepared for the kharif season. The company continuously works to control its imports, maintaining them in the range of ₹500-600 crores, and is pursuing backward integration initiatives to reduce dependency on external sourcing.

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