Narmada Agrobase Limited — Q2 FY26 earnings call

Call held 26 Nov 2025

Management summary

Narmada Agrobase Limited reported a stable Q2 and H1 FY26, with total income reaching ₹12.28 crores and ₹23.70 crores respectively, supported by healthy EBITDA and PAT margins. The company maintains a balanced product portfolio and is focused on domestic expansion and scaling its export footprint. While management expressed confidence in maintaining margins and reducing working capital, specific numerical details for future growth and leverage reduction were not provided, and concerns regarding increased borrowings were noted.

Highlights

  • Q2 FY26 Total Income reached ₹12.28 crores, with a healthy EBITDA margin of 13.22% and PAT margin of 8.36%.

  • H1 FY26 Total Income was ₹23.70 crores, achieving an EBITDA margin of 13.82% and PAT margin of 8.63%.

  • The company maintains a well-balanced product portfolio, with cattle feed contributing 52% and cotton seed 48% to revenue, mitigating single category concentration risk.

  • Management expects operating margins to remain intact for the full FY26, indicating stability in profitability.

  • Strategic initiatives include promoting non-GMO products in exports and a commitment to launch farmer education programs.

Concerns

  • Working capital increased compared to last year, and borrowings rose due to inventory buildup, with no specific numerical target or timeline for reduction provided.

  • Management did not provide specific numerical guidance for export share, state-wise revenue contribution, or detailed margin impact of value-added products.

  • Response to sustaining market position in an aggressive livestock market was vague, stating only that "Competition will reduce."

Key financials

2 periods

Q2 FY26

  • Total Income
    ₹12.282 Cr
  • EBITDA
    ₹1.624 Cr
  • EBITDA Margin
    13.2%
  • PAT
    ₹1.027 Cr
  • Net Margin
    8.4%

H1

  • FY26 Total Income
    ₹23.695 Cr
  • FY26 EBITDA
    ₹3.275 Cr
  • FY26 EBITDA Margin
    13.8%
  • FY26 PAT
    ₹2.046 Cr
  • FY26 Net Margin
    8.6%

What they filed

Q1 FY27: revenue up 100.9%, net profit down 26.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue10 14 29 11 12 +16%21 +54%34 +16%22 +101%
EBITDA2 1 1 1 1 −37%1 +3%1 +66%1 −28%
Net profit1 1 1 1 1 −20%1 +1%1 +3%1 −26%
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

  • Cattle Feed
    52% Revenue Contribution
  • Cotton Seed
    48% Revenue Contribution

Capital allocation

medium confidence
  • Debt Debt disclosed
    Riya Jain: And the borrowings has also increased due to inventory buildup, so is there any plans to reduce to leverage? Neerajkumar Agrawal: Concentration is like that. Some things we have to bear.

Guidance & targets

Working Capital

  • Working Capital Cycle Working Capital · FY26 · Medium confidence reduce
    Working capital cycle will reduce. Working capital has increased compared to last year.

    — Neerajkumar Agrawal

Revenue

  • FY26 Revenue Revenue · FY26 · Medium confidence more than last year result
    This year it will be more than last year result. Second half it will be more.

    — Neerajkumar Agrawal

  • H2 FY26 Revenue Revenue · H2 FY26 · Medium confidence high
    Revenue will increase. Second half revenue will be high. Revenue will be more than expected.

    — Neerajkumar Agrawal

Profitability

  • Operating Margins Profitability · FY26 · High confidence intact
    Yes, margin will be intact.

    — Neerajkumar Agrawal

Strategic Initiatives

  • Farmer Education Programs Strategic Initiatives · future · High confidence launch
    Farmer education. We will launch farmer education. We will bring that into effect.

    — Neerajkumar Agrawal

What to watch in Q3 FY26

Working Capital Cycle Reduction

Next quarter / H2 FY26
Current Increased compared to last year
Target Reduced cycle

Why it matters

Improvement in working capital management is crucial for financial health and operational efficiency.

Working capital cycle will reduce. Working capital has increased compared to last year.

Risks & concerns

  • Raw material price volatility

    medium

    Managed through rigorous raw material procurement model, integrated production setup, and buffer stock policy.

    Management acknowledged

  • Increased working capital and borrowings

    medium

    Working capital increased compared to last year, leading to higher borrowings due to inventory buildup, with no specific reduction plan.

    Analyst acknowledged

  • Competition in the livestock feed market

    low

    Analyst raised concern about sustaining market position; management responded, 'Competition will reduce.'

    Analyst downplayed

Q&A highlights

3 direct, 1 evasive
Non-GMO export market strategy Direct
We do not use GMO material. We have put through on the B2B platform. We are promoting non-GMO in front of GMO.

Clarifies the company's non-GMO product stance and its B2B platform strategy for the export market.

Asked by Vinod Shah

Export market trend and share Partial
We are making our entry in export. We are moving ahead. We are moving ahead positively.

Indicates positive momentum in export market entry and growth, but lacks specific quantitative details on H1 FY26 export share or growth.

Asked by Vinod Shah

Working capital management and borrowings Evasive
Working capital cycle will reduce. Working capital has increased compared to last year. Concentration is like that. Some things we have to bear.

Highlights a concern regarding increased working capital and borrowings due to inventory, with management acknowledging it but not providing a clear plan or target for reduction.

Asked by Riya Jain

FY26 Revenue and Operating Margin guidance Direct
This year it will be more than last year result. Second half it will be more. Yes, margin will be intact.

Provides directional revenue growth and a commitment to maintain operating margins for the full fiscal year, offering key financial outlooks.

Asked by Riya Jain, Aniket Madhwani

Strategy for aggressive livestock market and market position Partial
Competition will reduce.

Management's response is an observation about market dynamics rather than a specific strategy for sustaining or increasing market share in a competitive environment.

Asked by Riya Jain

Raw material inflation and impact Partial
It is a season business, it is crop. So, there is plus and minus. It is round the year.

Acknowledges the seasonal nature of raw material prices but implies effective management without detailing specific Q2 impact or future trends.

Asked by Vinod Shah

Launch of farmer education programs Direct
Farmer education. We will launch farmer education. We will bring that into effect.

Indicates a strategic initiative to increase scientific adoption among farmers, which could drive demand and brand loyalty.

Asked by Poonam Jha

2 min read 6 chapters

Detailed narrative

Q2 & H1 FY26 Financial Performance Overview

Narmada Agrobase Limited reported a total income of ₹12.28 crores for Q2 FY26, with an EBITDA of ₹1.62 crores, translating to an EBITDA margin of 13.22%. The profit after tax (PAT) for the quarter stood at ₹1.03 crores, achieving a net margin of 8.36%. For the first half of FY26, total income was ₹23.70 crores, EBITDA ₹3.27 crores (13.82% margin), and PAT ₹2.05 crores (8.63% net margin), reaffirming the strength of the operational model.

Product Portfolio and Operational Strategy

The company operates a multi-product, multi-market agrobase business, with cattle feed accounting for 52% and cotton seed for 48% of its financial quantified revenue, ensuring a well-balanced portfolio. Operations are supported by a 40,000 ton per annum manufacturing facility in Mehsana, Gujarat, utilizing a rigorous raw material procurement model to manage price volatility effectively. The current capacity utilization is reported to be more than 50%.

Market Expansion and Product Diversification

Narmada Agrobase is strengthening its domestic network in high-demand cattle feed markets like Maharashtra and Madhya Pradesh. Concurrently, it is expanding its export footprint across Southeast Asia, the Middle East, and Africa, focusing on non-GMO, high-protein livestock feed. The company is also diversifying its value-added product mix to include pelletized cattle feed, molasses-enriched feed blocks, and cotton seed oil, aiming for higher margins and differentiation.

Working Capital and Borrowings Management

Management acknowledged that working capital has increased compared to the previous year, leading to higher borrowings due to inventory buildup. While the company expects the working capital cycle to reduce, no specific numerical targets or detailed plans for reducing leverage were provided. Management stated, 'Concentration is like that. Some things we have to bear,' regarding the increased borrowings.

FY26 Outlook and Strategic Initiatives

For FY26, the company anticipates revenue to increase, with a strong performance expected in the second half, and operating margins are projected to remain intact. Strategic initiatives include promoting non-GMO products in the export market, continuous R&D for new B2B segments in cotton seed by-products, and a commitment to launch farmer education programs to increase scientific adoption among farmers.

Quality Focus and Client Retention

The company attributes its 99% client retention in PG15 primarily to the quality of its products. Management confirmed that there are 'no bottlenecks' in production after the semi-automatic plant automation, ensuring consistent nutritional quality and uninterrupted performance even during seasonal fluctuations.

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