Sharda Cropchem Limited: Cultivating Growth and Strong Margins in H1 FY26

Sharda Cropchem Limited, a prominent player in the global agrochemicals sector, has reported a robust financial performance for the second quarter and first half of fiscal year 2026. The company's strategic focus on an asset-light, intellectual property-driven business model, coupled with diversified global presence, has translated into significant revenue growth and margin expansion. This period highlights the company's resilience and its ability to capitalize on a recovering global agrochemical market, marked by a revival in demand and gradual pricing recovery.

For Q2 FY26, Sharda Cropchem's total revenues surged by 20% year-on-year to INR929 crore. This growth was primarily fueled by a substantial 35% increase in overall volumes. The agrochemical segment, the company's core business, led this expansion with a 27% year-on-year growth, reaching INR803 crore. The non-agrochemical business, however, saw a slight degrowth of 11% to INR126 crore. The first half of FY26 mirrored this positive trend, with total revenues increasing by 23% to INR1,914 crore, and the agrochemical segment contributing INR1,649 crore, up 26% from the previous year. This performance underscores the effectiveness of the company's strategy in navigating market dynamics and leveraging its extensive product registration pipeline.

Margin Expansion and Operational Efficiency

A key highlight of the period was the significant improvement in profitability. Gross margins expanded by an impressive 690 basis points in Q2 FY26 to 34.5%, and by 660 basis points in H1 FY26 to 35%. This expansion is attributed to stabilizing input costs and improved price realizations. Consequently, EBITDA for Q2 FY26 grew by 71% to INR139 crore, with EBITDA margins reaching 15%. For H1 FY26, EBITDA stood at INR281 crore, a 69% growth, with margins at 14.7%. Profit After Tax (PAT) also saw a remarkable increase, growing by 75% in Q2 to INR74 crore and a staggering 212% in H1 to INR217 crore. The company's working capital management also improved significantly, with working capital days reducing by 34 days to 84 days as of September 30, 2025. This reflects efficient capital allocation and operational discipline.

Segmental and Regional Performance

The agrochemical segment's growth was broad-based across product categories. Herbicides contributed 54% of agrochemical revenue in Q2 FY26, growing by 20% to INR433 crore. Insecticides accounted for 27% of revenue, surging by 65% to INR219 crore, while fungicides made up 19% of revenue, growing by 7% to INR150 crore. Geographically, Europe remained the largest market for agrochemicals, contributing 58% of revenue in Q2 FY26, with a 15% growth to INR463 crore. The NAFTA region showed exceptional growth of 69% to INR214 crore, representing 27% of agrochemical revenue. LATAM and ROW also contributed positively, growing by 21% each. This diversified geographical presence mitigates risks and provides multiple growth avenues.

Strategic Outlook and Future Initiatives

Sharda Cropchem is committed to a clear strategic roadmap for sustained growth. The company plans to strengthen its distribution presence and build its sales force through forward integration, adopting a 'factory-to-farmer' approach. A key focus remains on continual investment in product registrations, particularly for generic molecules going off-patent, to expand its intellectual property library. The management anticipates maintaining healthy EBITDA margins of 15-18% for the full year FY26 and expects to cross INR5,000 crore in revenue. The company's debt-free status and strong cash reserves of INR794 crore provide significant financial flexibility to support its growth initiatives, including a planned capex of INR450-500 crore for increasing product registrations. This disciplined approach to capital allocation and market expansion positions Sharda Cropchem for continued success in the dynamic agrochemical industry.