Nath Bio-Genes FY26: Growth Returns, Margins Normalize, and Uzbekistan Opens a New Door

Nath Bio-Genes (India) Limited closed FY26 with a strong headline: revenue rose 19 percent year on year to INR 4,316 million. The performance was driven by volume and value growth across key crops, with cotton, paddy, and maize leading the year.

Profitability, however, told a more mixed story. Gross profit increased 5 percent to INR 2,403 million, but gross margin fell to 56 percent from 63 percent in FY25. EBITDA remained flat at INR 525 million, translating into a lower EBITDA margin of 12 percent versus 14 percent a year ago. Profit after tax (excluding extraordinary items and after adjusting for exceptional items as noted by the company) declined 8 percent to INR 384 million, even as earnings per share increased to INR 23.42.

The company used the FY26 presentation and the post results call to make three clear points. First, its core crop engine is strengthening, with cotton and paddy together rising to 58 percent of revenue. Second, maize has emerged as a meaningful growth driver within the non-cotton, non-paddy segment. Third, the Uzbekistan joint venture delivered its first major milestone, contributing about INR 15 crore to the topline.

FY26 operating momentum: cotton and paddy scale up, maize stands out

In FY26, cotton Bt volumes grew 22.35 percent year on year to 13.8 lakh packets, while value growth was 28 percent. The company attributed traction to its flagship cotton hybrids, including Nath Sanket and Jumbo, and also indicated that production stability is expected to continue over the next two to three years.

Paddy remained a core crop. Volume increased 25 percent to 75,619 quintals, and value grew 37 percent. Nath Bio-Genes highlighted that cotton and paddy together now form 58 percent of the revenue mix, up from 52 percent in FY25.

Maize was positioned as the breakout category of FY26. Volumes rose 54 percent to 9,639 quintals, while value increased 78 percent. Management stated maize now contributes 10.72 percent to topline and called it the highest growth crop in the non-cotton, non-paddy segment. The company linked the opportunity to rising demand from poultry, starch, and ethanol industries.

Vegetable seeds saw a contraction in volumes, with volume down 15 percent and value down 10 percent. However, average realisation increased 6 percent from INR 1,178 per kg to INR 1,244 per kg, which the company described as a shift towards higher value premium products.

The Plant Nutrition segment (PNS) declined as well. Volume fell 19 percent and value fell 17 percent, which management attributed to China export restrictions that disrupted supply dynamics. The company expects this to normalize.

Revenue mix: core crops deepen their share

The FY26 presentation disclosed a segmental contribution split where cotton and paddy each contributed 29 percent of revenue, and the balance 42 percent came from other field crops. In FY25, cotton contributed 27 percent and paddy 25 percent, while others were 48 percent.

This indicates that core crop momentum, especially in cotton and paddy, outpaced the broader portfolio in FY26. The company’s framing is that this reflects deepening penetration in its key crops. At the same time, management emphasized that the broader portfolio remains important and referenced the non-cotton, non-paddy focus as a long-standing strategic priority.

Margins, tax normalization, and working capital build

While topline growth was robust, margins normalized in FY26. Management said FY25 gross margin was unusually high and not sustainable, and that FY26 reflected a return to a more typical range. The company attributed the gross margin decline to product and market mix.

Below gross profit, two cost items stood out. Finance cost rose to INR 133 million from INR 96 million in FY25, which management linked to deliberate working capital investments and inventory build. Depreciation was largely stable at INR 39 million.

Tax rate also changed materially. The effective tax rate rose to 11 percent from 5 percent in FY25, which management said had benefited from a lower rate. This shift contributed to the year on year PAT decline despite higher PBT.

On the balance sheet, total assets rose to INR 10,829 million. Cash and bank balances stood at INR 707 million. Inventory increased to INR 4,446 million, and the company described this as planned scaling for the upcoming season. Trade payables increased to INR 1,305 million as production was ramped.

Investors questioned the inventory trend and the cash flow presentation during the call. Management responded that higher inventory reflected improved cotton production after prior constraints and that cotton has a long shelf life, allowing the company to carry stock and liquidate it over time.

Uzbekistan milestone and international ambitions

A major narrative addition in FY26 was the Uzbekistan joint venture. The company said FY26 is the first year Uzbekistan contributed about INR 15 crore to the topline. During the Q and A, management explained that the effort began with a government-linked initiative focused on cotton, and that the company is still assessing product acceptability at scale.

Management described the Uzbekistan cotton seed market at around USD 100 million and the broader cereals and other crops market at around USD 450 million. The broader ambition is positioned around Central Asia, but the company did not set explicit near-term targets, stating that it prefers to evaluate performance after the current season.

In terms of longer-term mix, management indicated that international revenues are not expected to exceed 10 to 15 percent of topline at this stage, as the business is still settling in new geographies.

FY27 outlook: steady growth focus, limited capex, and monsoon preparedness

For FY27, management provided a directional growth view. It indicated an expectation of topline growth of around 15 to 20 percent and expects EBITDA margin to be maintained with a slight upward trend in profitability.

The call also addressed climate and monsoon risks, including discussion around El Nino. Management’s stance was that the company’s spread across territories and crops helps protect topline, and operationally it can shift stock between branches if sowing patterns vary.

On capital allocation, management said it does not plan major capex in processing plants or storage infrastructure. It prefers renting capacity due to seasonal utilization, and expects capex to remain minimal, primarily towards vehicles and land bank.

Takeaways

FY26 reinforced Nath Bio-Genes’ ability to grow through core crop strength while building new engines like maize. The revenue outcome was strong, but the year also highlighted the reality of margin normalization and higher working capital intensity as the company prepares for seasonal demand.

The Uzbekistan milestone provides a new optionality, but management remains cautious about committing targets until product acceptance is proven at scale. The FY27 guidance of 15 to 20 percent topline growth and stable margins sets expectations for steady execution, with the near-term investor focus likely to remain on margin trajectory, inventory conversion, and the sustainability of growth across both core and diversified crops.