Skip to content

    Sharda Cropchem Q1 FY27 earnings call

    SHARDACROP
    Chemicals·30 Jul 2026
    Management Summary

    Sharda Cropchem Limited reported a strong Q1 FY27 with 9% YoY revenue growth to ₹1,074 crores, driven by robust performance in NAFTA and LATAM. Profitability saw significant improvement, with gross margins expanding by 120 bps to 36.7% and EBITDA growing 25% to ₹178 crores. Despite a temporary softening in the European market due to weather, the company remains debt-free with healthy cash reserves and expects recovery in coming quarters.

    Highlights

    5

    • Revenue increased by 9% year-on-year to ₹1,074 crores in Q1 FY27.

    • Gross margins expanded by 120 basis points, reaching 36.7% in Q1 FY27.

    • EBITDA grew a healthy 25% to ₹178 crores, with the EBITDA margin improving by 220 basis points to 16.6%.

    • Working capital days improved by 10 days, standing at 88 days as of June 30, 2026.

    • NAFTA and LATAM markets delivered growth along with better profitability, maintaining momentum.

    Concerns

    3

    • Europe, the largest market, experienced a temporary softening in performance due to distributors' cutback on stock and unusual heatwave conditions.

    • FOREX gains were significantly lower at ₹7.5 crores in Q1 FY27 compared to ₹73.1 crores in Q1 FY26.

    • Volume growth for the quarter was negative at -1.6%.

    Key financials

    Single quarter

    07 metrics
    1. 01Revenue₹1,074 Cr+9%YoY
    2. 02Gross Margin36.7%
    3. 03EBITDA₹178 Cr+25%YoY
    4. 04EBITDA Margin16.6%
    5. 05PAT₹88 Cr

    Segment breakdown

    Agrochemical Business
    ₹915 Cr Revenue8% YoY Growth
    Non-Agrochemical Business
    ₹159 Cr Revenue15% YoY Growth
    Gross Margins Q1 FY27
    44.2% Europe32.8% NAFTA16.9% LATAM30.8% Rest of World36.7% Total
    Gross Margins Q1 FY26
    42.9% Europe25.9% NAFTA28% LATAM26.8% Rest of World35.5% Total
    List

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹273 crores this quarter · ₹500 crores (FY27) planned

    Debt

    Debt disclosed

    Liquidity

    Cash ₹767 crores

    Cash, bank and liquid investments as of June 30, 2026.

    Guidance & targets

    7
    CategoryTargetPriority
    Revenue
    Revenue Growth
    10%-15%
    		High
    Margin
    Gross Margins
    35%
    		High
    Margin
    EBITDA Margins
    18% to 20%
    		High
    Volume
    Volume Growth
    5% to 10%
    		Medium
    Capex
    CAPEX Investment
    500 to 550 crores
    		Medium
    Tax Rate
    Effective Tax Rate (annualized)
    18% to 20%
    		High
    Depreciation & Amortization
    Depreciation & Amortization (annualized)
    370-375 crores
    		High

    What to watch in Q2 FY27

    5

    Europe Volume Recovery

    next 3 quarters
    CurrentTemporary softening due to weather and stock cutback
    TargetVolumes recovering to normal levels

    Why it matters

    Europe is the largest market, and its recovery is crucial for overall revenue growth and profitability.

    As you are aware🎣, we are engaged in the marketing and distribution of a wide range of Agrochemical products catering to diverse global customer base. We develop comprehensive dossiers and obtain product registrations in our own name and we continue to allocate substantial resources towards securing registrations, which strengthens our market presence and helps us a substantial foothold across key markets.

    Risks & concerns

    3
    RiskSeverity

    Temporary softening in Europe market

    Europe experienced a temporary softening due to distributors' stock cutback and unusual heatwave conditions, but volumes are expected to recover. — Management acknowledged

    medium

    FOREX volatility and its impact on reported PAT

    Significant quarter-on-quarter volatility in FOREX gains/losses (₹7.5 crores in Q1 FY27 vs ₹73.1 crores in Q1 FY26) impacts reported PAT, making like-for-like comparisons challenging. — Both acknowledged

    medium

    Uncertainties in product registration process

    The process of obtaining product registrations is full of uncertainties regarding timelines and costs, requiring continuous substantial investment without guaranteed outcomes. — Management acknowledged

    low

    Q&A highlights

    8

    “Now, just take a note, the volume growth has been -1.6%, Fx impact is +12.7%, product mix impact is -2.1% and total growth is +9%.”

    Provides a detailed breakdown of revenue drivers, highlighting negative volume growth offset by positive FX impact.

    asked by Anubhav Mukherjee

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY27 Performance Overview

    Sharda Cropchem Limited commenced FY27 with a strong operating performance, reporting a 9% year-on-year revenue increase to ₹1,074 crores. This growth was accompanied by significant margin expansion, with gross margins rising by 120 basis points to 36.7% and EBITDA growing 25% to ₹178 crores. The EBITDA margin improved by 220 basis points, reaching 16.6%, primarily driven by a favorable product mix and strong regional performance in NAFTA and LATAM.

    02

    Regional Performance Dynamics

    While NAFTA and LATAM maintained strong momentum and contributed significantly to growth and profitability, the European market experienced a temporary softening. This was attributed to distributors cutting back on stock and unusual heatwave conditions. Despite the revenue dip in Europe, the agrochemical margins in the region actually improved. Management expressed confidence that European volumes would recover in the coming quarters⏳, supported by the company's strong registration base and long-term customer relationships.

    03

    Registration Pipeline and R&D Investment

    As of June 30, 2026, the company held 3,016 product registrations, a slight increase from 3,011 in March 2026, with an additional 1,027 applications globally awaiting approval. Sharda Cropchem continues to allocate substantial resources, investing approximately ₹450-500 crores annually, to secure new registrations. Management acknowledged the inherent uncertainties and unpredictable nature of the registration process but emphasized ongoing efforts to strengthen market presence.

    04

    Financial Health and Working Capital Management

    The company remains debt-free, with robust cash, bank, and liquid investments totaling ₹767 crores as of June 30, 2026, up from ₹702 crores in March 2026. Working capital management showed notable improvement, with working capital days reducing by 10 days to 88 days. This strong financial position provides a solid foundation for continued investment in its growth platform and registration pipeline.

    05

    FOREX Impact and Accounting

    FOREX gains in Q1 FY27 were significantly lower at ₹7.5 crores compared to ₹73.1 crores in Q1 FY26, impacting reported EBIT, PBT, and PAT. Management clarified that these gains/losses are primarily unrealized, stemming from the revaluation of foreign currency trade receivables and payables. They noted that EBITDA calculations do not consider these non-operating FOREX effects, and PBT, prior to FOREX gains, grew by 16% year-on-year to ₹111 crores, reflecting underlying operational strength.

    06

    Outlook and Guidance for FY27

    Sharda Cropchem reiterated its FY27 guidance, targeting 10-15% revenue growth and gross margins in the range of 35-37%. EBITDA margins are expected to be between 18-20%, with volume growth projected at 5-10%. The annual CAPEX is maintained at ₹500-550 crores, despite a higher Q1 spend due to one-time📎 data compensations. The annualized effective tax rate is expected to normalize📎 to 18-20%, and depreciation and amortization are projected to be ₹370-375 crores for the year.

    This is an AI-generated summary of a publicly available earnings call transcript.