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.