Sharda Cropchem (SHARDACROP) Q2 24/25 earnings summary

Executive summary

• Q2 FY2025 revenue grew 34% year-on-year to INR 777 crores, driven by strong agrochemical segment performance, especially in Europe and NAFTA, with agrochemicals accounting for 76% of Q2 revenues.

• H1 FY2025 revenue increased 28% year-on-year to INR 1,562 crores, with agrochemical volumes up 36% and non-agrochemical segment declining 31%.

• PAT turned positive at INR 42 crores in Q2 FY2025 from a loss of INR 28 crores in Q2 FY2024; H1 PAT at INR 70 crores versus a loss of INR 116 crores last year.

• Gross margins normalized to 27.6% in Q2 and improved to 28.4% in H1, with further improvement expected.

• Board approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024.

Financial highlights

• Q2 FY2025 agrochemical revenue rose 44% year-on-year to INR 634 crores; non-agrochemical revenue up 2% to INR 143 crores.

• Q2 EBITDA increased 125% year-on-year to INR 85 crores (margin 10.9%); H1 EBITDA at INR 173 crores versus a loss last year.

• Q2 PAT at INR 42 crores vs. loss of INR 28 crores YoY; H1 PAT at INR 70 crores vs. loss of INR 116 crores YoY.

• Working capital days improved by 32 days to 126 days as of September 30, 2024.

• Net debt-free with INR 656 crores in cash and liquid investments.

Outlook and guidance

• Revenue and EBITDA growth for FY2025 guided at 15%-18%, with volume growth expected in the same range.

• Management expects second half to outperform the first half due to seasonality and cropping patterns.

• Focus on forward integration, expanding sales force, and adopting a factory-to-farmer approach.

• Continued investment in product registrations and operational efficiencies to drive margin improvements.

• Industry outlook remains positive with global crop protection market expected to grow at 4.3% CAGR through FY32.