India Pesticides Limited — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

India Pesticides Limited delivered a strong Q2 FY26, with revenue growing 26% to INR 295 crores and EBITDA expanding to 18.3%. This performance was driven by a near-doubling of export sales and improved technical utilization, offsetting domestic market headwinds from heavy monsoons. The company remains on track for its FY26 revenue guidance of INR 1,000 crores and is progressing well on strategic capacity expansions and long-term growth targets.

Highlights

  • Q2 FY26 revenue grew 26% year-on-year to INR 295 crores, reflecting disciplined execution and strategic focus.

  • EBITDA for Q2 FY26 increased 37.6% year-on-year to INR 54 crores, with margins expanding to 18.3% from 16.6% in Q2 FY25.

  • Export sales nearly doubled to INR 140 crores in Q2 FY26, supported by improved offtake in Europe and Australia.

  • Technical utilization has moved up meaningfully to over 73% as global destocking eases and demand visibility improves.

  • Formulation capacity increased from 6,500 metric tons to 10,000 metric tons, with revenue potential of INR 400 crores at full utilization.

Concerns

  • Domestic market was impacted by heavy monsoons and challenges in the pesticide application cycle, leading to marginally lower domestic revenue of INR 150 crores compared to Q2 FY25.

  • The market is currently unable to recognize the company's valuation, despite strong fundamentals.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹295 Cr
    YoY +26%
  • EBITDA
    ₹54 Cr
    YoY +37.6%
  • EBITDA Margin
    18.3%
  • Net Profit
    ₹32 Cr
    YoY +22%
  • PAT Margin
    10.7%
  • Export Revenue
    ₹140 Cr
  • Domestic Revenue
    ₹150 Cr
  • ROCE
    18.8%

H1

  • FY26 Revenue
    ₹579 Cr
    YoY +26%
  • FY26 EBITDA
    ₹108 Cr
    YoY +53%
  • FY26 EBITDA Margin
    18.6%
  • FY26 Net Profit
    ₹67 Cr
    YoY +48%

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.

Segment breakdown

  • Technical and API
    66% Revenue Mix
  • Formulation
    34% Revenue Mix

Capital allocation

high confidence
  • Capex Capex disclosed all our growth through internal accruals
    • Planned spend for IPL ₹52 Cr
    • Planned spend for 100% subsidiary (Shalvis) ₹64 Cr
    • Backward integration project for 4,000 MT of 2,6-DEA at Sandila ₹65 Cr
    • Formulation capacity expansion from 6,500 MT to 10,000 MT ₹2.8 Cr
    Anand Swarup Agarwal: "all our growth through internal accruals." (page 4), S.P. Gupta: "Capital expenditure of INR 52 crores has been planned in IPL and INR 64 crores in our 100% subsidiary. Both are progressing as per schedule." (page 6), D.K. Jain: "Our Board approved a backward integration project at Sandila for producing 4,000 metric tons of 26 DEA, which will strengthen our supply chain and reduce our dependence on imports and will also help us in our margins." (page 5), Anil Jain: "Sir, and our capacity expansion from 6,500 metric tons to 10,000 metric ton undertaken at an expense of INR 2.8 crores." (page 9)
  • Debt Debt disclosed
    Anand Swarup Agarwal: "We continue to remain a zero debt company funding all our growth through internal accruals." (page 4), S.P. Gupta: "We have healthy net cash and cash balance of around INR 80 crores." (page 6)
  • Liquidity Cash ₹80 Cr Healthy net cash and cash balance.
    S.P. Gupta: "We have healthy net cash and cash balance of around INR 80 crores." (page 6)

Guidance & targets

Revenue

  • FY26 Revenue Revenue · FY26 · High confidence INR 1,000 crores
    For the year, we have guided revenue of around INR 1,000 crores and INR 565 crores already achieved in the first half, we are comfortably on track, supported by the recovery we are seeing in key export markets as well as the domestic market.

    — Anand Swarup Agarwal

  • Shalvis Subsidiary Revenue Contribution Revenue · next year · High confidence INR 100 crores
    By next year, we expect Shalvis to contribute meaningful with around INR 100 crores in revenue, strengthening our specialty chemical road map.

    — Anand Swarup Agarwal

  • Long-term Revenue Target Revenue · by FY30-31 · High confidence INR 3,000 crores
    This is FY30-31, that's what we have planned. And we are progressing towards that, yes. That is a long-term vision.

    — D.K Jain

  • Formulation Capacity Revenue (full utilization) Revenue · full utilization · High confidence INR 400 crores
    Revenue it will be around INR 400 crores, 10,000 tons formulation capacity.

    — S.P. Gupta

  • FY27 Pretilachlor + Intermediate Revenue Revenue · FY27 · High confidence minimum INR 250 crores
    FY27 figure, I think we should be minimum INR250 crores

    — D.K Jain

Margin

  • FY26 EBITDA Margin Margin · FY26 · High confidence 18%-20%
    Against our guidance of 18%-20%, we have already achieved 18.6% in H1 FY26, backed by better utilization, operational discipline and improved cost efficiencies.

    — Anand Swarup Agarwal

Market Share

  • Export Mix Market Share · medium-term · High confidence 40%
    For this quarter, it was 48% but our medium-term target is around 55% to 60% domestic and around 40% export mix.

    — S.P. Gupta

  • Domestic Mix Market Share · medium-term · High confidence 55%-60%

    — S.P. Gupta

  • Long-term Export Share of Turnover Market Share · long-term · High confidence 40%-45%
    Because out of our turnover, we want to have at least 40% to 45% as exports.

    — D.K Jain

Working Capital

  • Working Capital Days Reduction Working Capital · by March 2026 · High confidence 25-30 days
    Our net working capital days has already declined significantly from 255 days as at 31st March 2025 to 174 days in September 2025. With a strong order outlook, expanded capacities and stable raw material pricing, we are positioned to continue our growth in the coming quarters. ... there is a scope for 25 days to 30 days reduction further.

    — S.P. Gupta

Growth

  • FY27 Overall Growth Growth · FY27 · High confidence at least 20%
    We expect at least 20% growth over this year.

    — D.K Jain

What to watch in Q3 FY26

FY26 Revenue Target Achievement

FY26
Current INR 579 crores (H1 FY26)
Target INR 1,000 crores

Why it matters

Key indicator of overall business performance and execution against annual guidance.

Anand Swarup Agarwal: "Taken together, improved export traction, a favorable domestic cycle rising utilization and the progress across our strategic initiatives give us full confidence in meeting our full year revenue guidance of about INR 1,000 crores with margin as promised in the 18%-20% range." (page 4)

Risks & concerns

  • Domestic market headwinds due to heavy monsoons

    medium

    Heavy monsoons impacted the pesticide application cycle, leading to marginally lower domestic revenue in Q2 FY26.

    Management acknowledged

  • Market undervaluation of the company's stock

    medium

    Despite strong performance, the market valuation is not reflecting the company's true worth, causing concern for investors, though management prioritizes capex for long-term value.

    Analyst acknowledged

  • Seasonal softness in H2 compared to H1

    low

    H2 is generally softer than H1, but strong export momentum is expected to contribute significantly and offset this seasonality.

    Analyst acknowledged

Q&A highlights

6 direct
Sustainability of export contribution and target mix Direct
For this quarter, it was 48% but our medium-term target is around 55% to 60% domestic and around 40% export mix. And export demand in key geographies like Europe, Australia and Japan, we have good order book from these geographies.

Clarifies the company's target export mix and confidence in sustaining export growth, indicating strategic focus on international markets.

Asked by Maitri Shah

Disclosure of order book figures Partial
Yes, that can be shared, no problem. We already have published that. So we will share with you, no problem. You can contact our Company Secretary, he will send you.

Indicates that specific order book numbers are available but not disclosed on the call, suggesting a level of transparency but not immediate public access.

Asked by Maitri Shah

Margin accretion from 2,6-DEA backward integration project Direct
See, madam, that is more of a strategic nature in the sense we want to reduce our dependence on the import of this material because we are already making the forward integrated molecules from this. So it will reduce our dependence on import as well as it will help us in increasing our overall margins of the product because we will not be selling this product in the market, but we will be utilizing primarily for our in-house production of further intermediate and the final product from this.

Explains the strategic rationale and margin benefit of backward integration, emphasizing self-sufficiency and cost control for internal consumption.

Asked by Maitri Shah

Outperforming the market and drivers of export demand Direct
In export market, there is a demand increase. We are getting increased inquiries from our customers. And we have visited a lot of our customers in their factories and offices across the world, including Australia, Europe, U.S.A., etc. And that has given a more personal touch to the business, and that's how we have got increased orders from our various customers across the geographies.

Provides insight into the drivers of strong export growth, highlighting proactive customer engagement and global market recovery.

Asked by Ankit Gupta

Market undervaluation and potential buyback Partial
But sir, buyback will probably whatever surplus we have, if we utilize that in increasing our business by increasing our assets and the production capacities, that will create more value to the company.

Highlights a shareholder concern about valuation and management's capital allocation philosophy, prioritizing growth capex over buybacks for long-term value creation.

Asked by Ajay Desai

H2 FY26 margin sustainability given new plant expenses Direct
It will be maintained, sir. It will be maintained irrespective of the sales revenue, but it will be maintained between 18% to 20%. That's what we are trying our best.

Reassures on margin stability despite new capacity coming online and associated expenses, indicating confidence in operational efficiencies.

Asked by Ankit Minocha

PEDA plant expansion commissioning timeline Direct
It is in very advanced stage of construction. There has been delay because there's a heavy monsoon in the last 2 months in Lucknow, there is a slight delay in that, but it will be another 15 days, 20 days, it should be on stream.

Provides an updated timeline for a key capacity expansion project, acknowledging a slight delay due to weather but confirming imminent commissioning.

Asked by Vidhi Shah

Market share gain from China due to backward integration Direct
Yes. Certainly, we have gained a lot of market share where the people were importing from China. So they are no more importing now. You take the case of this PEDA itself, it was being imported more than 90% was being imported. But now we are able to cater this requirement in India. So there is a lot of import substitution on this.

Confirms the company's success in import substitution and gaining market share from Chinese imports, particularly for products like PEDA.

Asked by Anil Jain

2 min read 6 chapters

Detailed narrative

Q2 FY26 Performance Overview

India Pesticides Limited reported a robust Q2 FY26, with total revenue reaching INR 295 crores, marking a 26% year-on-year growth. EBITDA for the quarter stood at INR 54 crores, up 37.6% YoY, with margins expanding to 18.3% from 16.6% in Q2 FY25. Net profit increased by 22% to INR 32 crores, achieving a PAT margin of 10.7%. The company also saw its Return on Capital Employed improve to 18.8% from 17.6% in Q2 FY25.

Export and Domestic Market Dynamics

Export sales nearly doubled to INR 140 crores in Q2 FY26, driven by improved offtake in Europe and Australia and increased customer inquiries. Management attributed this success to deeper customer engagement and cost competitiveness. Conversely, domestic revenue remained marginally lower at INR 150 crores due to heavy monsoons impacting the pesticide application cycle. The company aims for a medium-term mix of 55-60% domestic and 40% export.

Capacity Expansion and Strategic Projects

The company achieved a significant milestone by increasing its formulation facility annual output from 6,500 metric tons to 10,000 metric tons, with a revenue potential of INR 400 crores at full utilization. A backward integration project at Sandila for producing 4,000 metric tons of 2,6-DEA, costing INR 65 crores, is progressing to strengthen the supply chain and reduce import dependence. The PEDA plant expansion, though slightly delayed by 15-20 days due to monsoons, is in an advanced stage of construction.

Shalvis Subsidiary Progress and Future Outlook

The Shalvis subsidiary is progressing well, with initial technical grade production of one molecule already started. The company expects Shalvis to contribute meaningfully with around INR 100 crores in revenue by next year, bolstering its specialty chemical roadmap. Future plans include adding 2-3 blocks annually, aiming for INR 1,000 crores from Shalvis alone upon full realization in 3-5 years.

Long-Term Vision and Capital Efficiency

IPL reiterated its long-term vision to achieve INR 3,000 crores in revenue by FY30-31, supported by an integrated manufacturing model and investment in specialty chemistry. The company maintains a zero-debt status, funding all growth through internal accruals, and reported a healthy net cash and cash balance of around INR 80 crores. Capital expenditure for IPL and Shalvis is planned at INR 52 crores and INR 64 crores respectively for the current fiscal year.

Working Capital Management

The company significantly reduced its working capital days from 255 days as of March 2025 to 174 days in September 2025. Management aims for a further reduction of 25-30 days by March 2026, targeting 20 days off inventory and 10-15 days off receivables, to enhance the cash conversion cycle. This improvement reflects ongoing operational discipline and cost efficiencies.

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