India Pesticides Limited — Q1 FY26 earnings call

Call held 11 Aug 2025

Management summary

India Pesticides Limited delivered a strong Q1 FY26, reporting significant revenue and profit growth driven by volume expansion and improved margins. The company successfully expanded its PEDA and formulation capacities, with further capacity additions on track. While facing minor headwinds from monsoon delays and pricing pressure in specific products, IPL remains optimistic about its growth trajectory, supported by strategic capex and a robust product pipeline.

Highlights

  • Revenue grew by 25.8% YoY to ₹282 crores, driven primarily by volume and sustained demand.

  • EBITDA increased by 62.6% YoY to ₹52 crores, with the EBITDA margin expanding by 4.17 percentage points to 18.4%.

  • Net profit surged by 79.2% YoY to ₹35 crores, and PAT margin expanded by 3.6 percentage points to 12.3%.

  • Return on Capital Employed (ROCE) improved significantly to 18.34% from 14%, reflecting better product mix and capital allocation.

  • Successful commissioning of expanded PEDA and formulation facilities, with PEDA capacity on track to reach 8,500 MTPA by Q2 FY26.

Concerns

  • Formulation sales were flat in Q1 FY26 (~₹78-80 crores) due to a slight delay in monsoon, though demand picked up in July.

  • Pricing pressure was observed in Prosulfocarb, although management stated it was offset by process optimization.

  • China competition remains a challenge, but management asserts competitiveness through optimized products and anti-dumping duties.

Key financials

  1. Revenue ₹282 Cr +25.8%YoY
  2. EBITDA ₹52 Cr +62.6%YoY
  3. EBITDA Margin 18.4%
  4. PAT ₹35 Cr +79.2%YoY
  5. PAT Margin 12.3%
  6. ROCE 18.3%
  7. Export Revenue ₹87 Cr
  8. Domestic Revenue ₹188 Cr
  9. Technicals Revenue ₹194 Cr
  10. Formulations Revenue ₹81 Cr
  11. Pretilachlor Sales ₹55 Cr
  12. Blended Capacity Utilization 80%
  13. Technical Capacity Utilization 73%
  14. Formulation Capacity Utilization 100%

What they filed

Q1 FY27: revenue down 8.4%, net profit down 34.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue229 172 207 275 290 +27%225 +31%266 +29%252 −8%
EBITDA34 27 32 45 49 +44%38 +41%42 +31%35 −22%
Net profit26 16 22 35 32 +23%23 +44%31 +41%23 −34%
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

high confidence
  • Capex ₹116 Cr primarily with internal accruals
    • Existing manufacturing facilities ₹52 Cr
    • Wholly-owned subsidiary Shalvis Specialties Ltd (Hamirpur site) ₹64 Cr
    Our expansion plan remains firmly on track. During FY25-26, we intend to undertake capital expenditure of Rs. 52 crores at our existing manufacturing facilities and Rs. 64 crores at our wholly owned subsidiary, Shalvis Specialties Ltd. ... Company is planning to fuel its Capex plan primarily with internal accruals.
  • Debt Debt disclosed
    The interest cost will be reduced in Q1 FY26 this year. We have borrowing since Q4 FY25 have accumulated a large inventory of our herbicide. Now they have been liquidated and we are receiving payments. So, now our working capital limit, they are at a very low level. So, interest cost will be reduced in subsequent quarters.
  • Liquidity Liquidity disclosed Company has a strong balance sheet with the ability to generate good free cash flow.
    India Pesticides Ltd. has its strong balance sheet with the ability to generate good free cash flow.

Guidance & targets

Revenue

  • Revenue Target Revenue · FY26 · High confidence ₹1,000 crores
    The revenue target what we have fixed is Rs. 1,000 crores for FY25-26 with a margin between 18%-20%.

    — Dheeraj Kumar Jain

  • Hamirpur Site Revenue Revenue · FY26-27 · High confidence ₹100 crores
    revenue potential there we are envisaging next year in FY26-27 we should be able to get about Rs. 100 crores revenue from this site

    — Dheeraj Kumar Jain

  • Hamirpur Site Full Revenue Potential Revenue · 3-4 years · Medium confidence ₹1,000-1,100 crores
    when this site is fully operational, when this company, because it is a land of 25 acres, when we fill that with the production blocks, we should be able to get a revenue of almost Rs. 1,000 crores from there. ... Yes, ultimately that's what we envisaged Rs. 1,000 crores to Rs. 1100 crores from Hamirpur site. ... 3-4 years, sir, minimum.

    — Dheeraj Kumar Jain

Profitability

  • EBITDA Margin Target Profitability · FY26 · High confidence 18%-20%
    The revenue target what we have fixed is Rs. 1,000 crores for FY25-26 with a margin between 18%-20%.

    — Dheeraj Kumar Jain

  • EBITDA Margin Profitability · FY27 · High confidence 18% to 20%
    Even for the next year we are envisaging a growth of about 15% to 20% in our revenue and EBITDA margins again we would like to keep between 18% to 20%.

    — Dheeraj Kumar Jain

Capacity

  • PEDA Capacity Expansion Capacity · Q2 FY26 · High confidence 8,500 metric tons per annum

    From 6,000 tons per annum today

    Looking ahead, the company is on track to expand capacity to 8,500 metric tons per annum by Q2 FY 26

    — Vishwas Swarup Agarwal

  • PEDA Capacity Ready Capacity · September-October · High confidence 8,500 tons
    presently we have a capacity of about 6,000 tons of PEDA which is further being augmented to 8500 tons. This will be ready by September-October

    — Dheeraj Kumar Jain

Capacity Utilization

  • Overall Capacity Utilization Capacity Utilization · Ongoing · High confidence >70%
    utilization would be more than 70% of our capacities. ... The normal capacity utilization of around 70% we should be able to achieve.

    — Dheeraj Kumar Jain

Sales

  • PEDA + Pretilachlor Sales Sales · FY26 · High confidence ₹150 crores
    PEDA I think we should be able to generate about 150 crores from PEDA and Pretilachlor this quarter, this year.

    — Dheeraj Kumar Jain

  • PEDA + Pretilachlor Sales Sales · FY27 · Medium confidence ₹250-300 crores
    if I take the capacity of 8,500 and if I am able to utilize at least 70%-75% of the capacity. So, it will be about 5,000 to 6,000 tons of PEDA which will convert into about Rs. 250 crores to Rs. 300 crores.

    — Dheeraj Kumar Jain

Revenue Growth

  • Revenue Growth Revenue Growth · FY27 · High confidence 15% to 20%
    Even for the next year we are envisaging a growth of about 15% to 20% in our revenue and EBITDA margins again we would like to keep between 18% to 20%.

    — Dheeraj Kumar Jain

Product Launches

  • New Product Launches Product Launches · Next year · High confidence 5 products (2 in IPL, 3 in Shalvis)
    There are two products in IPL and three products in Shalvis are lined up for launches next year.

    — Dheeraj Kumar Jain

Capital Investment

  • Hamirpur Site Total Investment Capital Investment · Long-term · Medium confidence ₹400-500 crores
    Asset turnover are 2-2.5, so 400 crores to 500 crores of investment will be required.

    — Satya Prakash Gupta

Sales Mix

  • H1 Turnover Ratio Sales Mix · H1 (annual) · High confidence 55%-56%
    Turnover ratio in generally in first half we are achieving 55% to 56% and in second half 43% to 44%.

    — Satya Prakash Gupta

  • H2 Turnover Ratio Sales Mix · H2 (annual) · High confidence 43%-44%

    — Satya Prakash Gupta

What to watch in Q2 FY26

PEDA Capacity Expansion Completion

Q2 FY26 (by September-October)
Current 6,000 tons per annum, further augmentation in progress
Target 8,500 metric tons per annum capacity fully operational

Why it matters

This expansion is crucial for meeting substantial Indian demand and driving overall volume growth.

Looking ahead, the company is on track to expand capacity to 8,500 metric tons per annum by Q2 FY 26

Risks & concerns

  • Pricing Pressure on Prosulfocarb

    medium

    Some pricing pressure exists on Prosulfocarb, but the company has optimized its process to nullify the price decrease.

    Analyst acknowledged

  • Competition from China

    medium

    China is a constant challenge, but IPL is competitive due to optimized products and benefits from anti-dumping duties on products like Pretilachlor.

    Both acknowledged

  • US Tariffs on Exports

    low

    US tariffs are not substantial as they are similar for India and China, affecting only 3-4% of turnover in niche products.

    Analyst downplayed

  • Monsoon Delay Impact on Formulation Sales

    low

    A slight delay in monsoon (starting mid-July) affected Q1 FY26 formulation sales, but demand picked up substantially in July, with growth expected in Q2.

    Analyst acknowledged

Q&A highlights

8 direct
FY26 Revenue and EBITDA Margin Targets Direct
The revenue target what we have fixed is Rs. 1,000 crores for FY25-26 with a margin between 18%-20%.

Management provided clear numerical guidance for the full fiscal year's top-line and profitability.

Asked by Ankit from Adezi Ventures Family Office

Confidence in Utilizing New Capacities Direct
Confidence level is very good sir because we know whatever product we are making we normally have some arrangements in advance. So, as soon as we start manufacturing, we can immediately market it.

Addressed analyst's concern about demand absorption for newly added capacities, indicating pre-arranged sales.

Asked by Ankit from Adezi Ventures Family Office

Impact of US Tariffs on Exports Direct
US tariff that will not be substantial on our products because the tariffs whatever have been declared by the US administration, India and China both are in the similar range and these are the two major countries who are exporting these agrochemicals to US. So, we don't see any impact on our products from US tariffs.

Clarified that US tariffs are not a significant risk due to the nature of products and comparable tariff structures for major exporters.

Asked by Ankit from Adezi Ventures Family Office

Pretilachlor Pricing and PEDA Capacity Ramp-up Direct
Pretilachlor volumes have helped us in this quarter because this is the main season for Pretilachlor because it goes in rice, paddy sowing, so this was the main season and Pretilachlor sales were good with this anti-dumping duty, the prices have slightly normalized.

Provided insights into the positive impact of anti-dumping duties on Pretilachlor pricing and the seasonal demand for the product.

Asked by Dhwanil Desai from Turtle Capital

Formulation Sales Performance in Q1 FY26 Direct
Yes formulation growth in July there has been substantial growth actually because it's slightly delayed that is why it has come up but now it is going on very well. ... So, there was a delay in monsoon for few days. So, it started around 10th and 15th of July.

Explained the reason for flat Q1 formulation sales and indicated a recovery in July, providing context for short-term performance.

Asked by Ananth Shenoy from AS Capital

FY27 Growth Targets and China Competition Direct
Even for the next year we are envisaging a growth of about 15% to 20% in our revenue and EBITDA margins again we would like to keep between 18% to 20%. ... We have optimized our products and we are competitive to China now and we are able to compete with them.

Provided forward-looking guidance for FY27 and addressed the ongoing competitive landscape with China, highlighting the company's strategy.

Asked by Darshil Jhaveri from Crown Capital

Outlook on Interest Costs Direct
The interest cost will be reduced in Q1 FY26 this year. We have borrowing since Q4 FY25 have accumulated a large inventory of our herbicide. Now they have been liquidated and we are receiving payments. So, now our working capital limit, they are at a very low level. So, interest cost will be reduced in subsequent quarters.

Offered a clear expectation for reduced interest expenses in upcoming quarters, linked to inventory management and working capital.

Asked by Darshil Jhaveri from Crown Capital

Hamirpur Project Revenue Potential and Investment Direct
revenue potential there we are envisaging next year in FY26-27 we should be able to get about Rs. 100 crores revenue from this site and when this site is fully operational, when this company, because it is a land of 25 acres, when we fill that with the production blocks, we should be able to get a revenue of almost Rs. 1,000 crores from there.

Detailed the short-term and long-term revenue potential of the Hamirpur greenfield project, outlining a significant future growth driver and associated investment.

Asked by Saket Kapoor from Kapoor & Company

3 min read 7 chapters

Detailed narrative

Robust Q1 FY26 Financial Performance

India Pesticides Limited reported a strong Q1 FY26, with revenue reaching ₹282 crores, marking a 25.8% year-on-year and 34% quarter-on-quarter growth. This was primarily volume-led, supported by sustained demand in both domestic and international markets. EBITDA increased by 62.6% YoY to ₹52 crores, resulting in an EBITDA margin of 18.4%, an expansion of 4.17 percentage points. Net profit stood at ₹35 crores, growing 79.2% YoY, with a PAT margin of 12.3%, up 3.6 percentage points.

Strategic Capacity Expansion and Utilization

The company successfully commissioned an expanded intermediate PEDA facility, increasing its capacity from 2,000 tons to 6,000 tons per annum, with a further scale-up to 8,500 metric tons per annum expected by Q2 FY26. Additionally, formulation capacity was augmented by 3,500 MT per annum. Overall blended capacity utilization was approximately 80%, with technical capacity at 73% and formulation capacity fully utilized, demonstrating efficient asset deployment.

FY26-27 Growth Outlook and Targets

IPL has set a revenue target of ₹1,000 crores for FY26, aiming for an EBITDA margin between 18-20%. For FY27, the company envisages a revenue growth of 15-20% while maintaining EBITDA margins in the 18-20% range. Sales of PEDA and Pretilachlor are projected to reach ~₹150 crores in FY26 and ₹250-300 crores in FY27, driven by increased capacity and market demand. The company also plans to launch two new products in IPL and three in its subsidiary Shalvis next year.

Hamirpur Greenfield Project as a Long-Term Driver

A significant capital expenditure of ₹64 crores is planned for the Hamirpur site in FY26, part of the total ₹116 crores capex for the year. This greenfield project is expected to generate approximately ₹100 crores in revenue in FY26-27. Over the long term, the Hamirpur site has a revenue potential of ₹1,000-1,100 crores within 3-4 years, requiring a total investment of ₹400-500 crores, which will be primarily funded through internal accruals.

Product Mix and Market Dynamics

The company experienced robust growth in its herbicide business, with Pretilachlor sales reaching ~₹55 crores in Q1 FY26, benefiting from anti-dumping duties that normalized prices. Demand for fungicides like Captan and Folpet is increasing, with Folpet seeing strong export demand. While Prosulfocarb faced some pricing pressure, process optimization helped mitigate the impact. Formulation sales were flat in Q1 due to a delayed monsoon but showed substantial growth in July, indicating a recovery.

Backward Integration and Competitive Stance

IPL's strategy emphasizes backward integration, with all major existing products, including Pretilachlor, Captan, and Folpet, being backward integrated. For new products, the company adopts a phased approach, starting with introduction and then pursuing backward integration based on market response. Management acknowledged China as a competitive challenge but asserted that IPL is well-positioned due to optimized products, competitive pricing, and the benefit of anti-dumping duties on key molecules.

Improved ROCE and Financial Prudence

The company's Return on Capital Employed (ROCE) significantly improved to 18.34% from 14%, a direct outcome of a better product mix and efficient capital allocation. Management expects interest costs to reduce in subsequent quarters of FY26, driven by the liquidation of herbicide inventory and lower working capital limits. This disciplined approach underscores the company's commitment to sustainable, profitable growth and efficient financial management.

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