Sumitomo Chemical India’s Q2 FY26 revenue dipped to Rs 930 crore due to excess rainfall, though margins stayed stable and outlook remains positive.
Erratic monsoon hits Sumitomo Chemical India’s Q2 FY26 revenue, but strong margins and liquidity support recovery hopes (Photo: File)
The agrochemical industry has been witnessing early signs of stabilising after nearly two years of inventory destocking, immense pricing pressure and climate related disruptions. The ordering pattern of customers are gradually normalising in the country and Chemical prices appear to have bottomed out in the International market, thereby offering a base for recovery in the agrochemical sector.
The second quarter of FY2026 saw adverse weather conditions in the country with heavy rain pouring in from the middle of July to end of September 2025 resulting in farmers not able to do proper harvesting in the fields leading to lack of chemical sprays for crop protection. The consolidated revenue for Q2 FY26 stood at Rs 930 crores representing a slight decline as against the corresponding period of last year driven by volume contraction due to erratic and excess rainfall in the country.
But the price realisation... remained broadly stable across all product portfolios for Sumitomo Chemical India Ltd supported by disciplined pricing practices and strong product positioning. Gross margin was maintained at 43.1 demonstrating cost efficiency and prudent input sourcing while EBITDA margins stood at 22 for H1FY26 broadly inline with market expectations.
The company has excellent key brands in its crop protection business segment such as Sumimax, Excalia Max, Lentigo and other herbicide formulations witnessing strong momentum, healthy growth and continued market leadership. During the first half of FY26, the collections improved substantially with total revenue at Rs 2277 crores as compared to Rs 1999 crores for the corresponding period of last year on the back of stringent inventory levels and timely supplier settlements.
Cash balance stood at Rs 2089 crores as at 30 September 2025 providing strong liquidity and balance sheet flexibility underlying the strong health of the company. The company continues to deepen its farmer connect and strengthen its domestic franchise through engagement programs and digital interventions enabling direct communication with farmers and enhancing the overall brand recall.
Sumitomo Chemical expects the second half of the current financial year to be better on the back of healthy reservoir levels and adequate soil moisture during the Rabi season for field conditions to improve supporting a rebound in farming activity and input demand. With improving field conditions and healthy rural sentiment, Sumitomo Chemical expects a smart recovery in the next two quarters and well positioned to deliver sustainable value to all its stakeholders.
The stock price of Sumitomo Chemical India Ltd is currently quoting at Rs 430 on the bourses and fund managers and industry analysts are bullish on the scrip and expect at least a 25 price appreciation in the... next one year time frame.
