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 revenue.

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

• Gross margins improved to 27.6% in Q2 and 28.4% in H1, reflecting recovery from last year's stock devaluation and normalization.

• PAT turned positive at INR 42 crores in Q2 and INR 70 crores in H1, compared to losses in the prior year, reflecting operational efficiency.

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

Financial highlights

• Q2 FY2025 EBITDA rose 125% year-on-year to INR 85 crores, with EBITDA margin at 10.9%; H1 EBITDA reached INR 173 crores, margin at 11.1%.

• Q2 PAT at INR 42 crores (vs. loss of INR 28 crores last year); H1 PAT at INR 70 crores (vs. loss of INR 116 crores last year).

• Working capital days improved by 32 days to 126 days since March 2024.

• Company remains net debt-free with INR 656 crores in cash and liquid investments as of September 30, 2024.

• EPS for Q2 FY25 stood at ₹4.70, up from a loss per share of ₹3.06 in Q2 FY24.

Outlook and guidance

• Management expects gross margins to improve further in FY2025 as prices recover and operational efficiencies are realized.

• Revenue and EBITDA growth guidance for FY2025 is 15%-18%, with similar expectations for volume growth.

• Second half of the year is anticipated 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.

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