Sharda Cropchem raises FY26 revenue and margin guidance after strong first half

Sharda Cropchem has raised its full-year forecast after delivering a stronger-than-expected performance in the first half of FY26. The agrochemical company, which posted a 23% rise in revenues in H1—well above the 15% growth it had initially estimated—now expects to close the year with revenue growth of about 20%.

Speaking to CNBC-TV18, Chairman and Managing Director RV Bubna said the company now sees margins improving much faster than earlier expected. “Margins are going to be better, in the range of 18% to 20%, closer to 20%, and revenue is also going to grow around 20% for the full year,” he said.

The upgrade comes at a time when the global agrochemical sector continues to face pricing pressure and inventory challenges, but Sharda Cropchem says the environment is turning more favourable. Bubna noted that demand has strengthened across key markets. “Our main geographies are Western Europe and NAFTA, and both these regions are doing very well. The demand is also very encouraging,” he added.

Growth in FY26 is expected to be led primarily by volumes, supported by higher realisations. The company recorded a 35% jump in volumes in Q2, though revenue grew at a slower pace due to product-mix changes. Bubna said the shift was deliberate as the company focuses more on value-added, higher-margin products. “We have a big portfolio of hundreds of products, and we concentrate on the products that give us a better margin,” he explained.

The company continues to invest aggressively in expanding its product basket, with more than 1,000 products currently in the global registration pipeline—though the approval process remains fraught with uncertainty. “The process of registration is very uncertain and unpredictable because we are dependent on various government and bureaucratic authorities,” Bubna said.

Sharda Cropchem is also maintaining a strong pace of investment in regulatory filings and expansion, with planned capex of ₹450–500 crore for FY26, on top of ₹250 crore already spent in the first half.

The company’s balance sheet has also strengthened meaningfully, with working capital days improving from nearly 120 to just over 80 in H1. Bubna expects stability going forward, saying, “At least maintaining around this level; there could be some small improvement as well.”

With upbeat demand trends, improved product mix and stronger margins, Sharda Cropchem enters the second half of FY26 with upgraded confidence—aiming for one of its strongest yearly performances in recent years.

Below is the verbatim transcript of the interview.

Q: In the first half (H1 FY26), your revenues grew 23%, which is much ahead of your 15% growth estimate at the start of this year. Do you want to raise that estimate? And do you believe that margins would be closer to 18% than 15%?

Bubna: The fact is that margins are going to be better, in the range of 18% to 20%, closer to 20%, and revenue is also going to grow in the range of about 20% for the full year (FY26).

Q: So you’re upping your guidance, both on revenues and margins — expecting revenue growth of 20% in FY26 versus 15% earlier, and margins between 18% and 20%. Can you give us a sense of how demand is looking right now? Sharda Cropchem has seen growth despite the headwinds in the industry. What is the current realisation like? Is pricing better across geographies?

Bubna: Yes, it is rising across geographies. Our main geographies are Western Europe and NAFTA, and both these regions are doing very well. The demand is also very encouraging.

Q: What kind of volume growth are you expecting in FY26? For the 20% growth that you’re talking about, how much of it will come from pricing, and how much from volume growth?

Bubna: Most of it will be from volume growth, and also improvement in pricing.

Q: In the first half, or at least in the second quarter, your volumes grew 35%, whereas revenue grew just around 20%. Was there any price degrowth? And do you expect this mix to move more towards price than volume?

Bubna: No, I would say it is mainly due to the product mix.

Q: Have you made any changes to the product mix? Because you’re saying the headwinds are behind the company and all geographies are doing well. Are you looking at higher-margin or value-added products, and is that leading to better growth?

Bubna: That is always our target and strategy. We have a big portfolio of hundreds of products, and we concentrate on the products that give us a better margin. Since we are not a manufacturer, we are not affected if we rework the product that have become common and commoditised.

Q: What’s the mix right now—value-added versus commoditised products—in your overall portfolio?

Bubna: Value-added is more than commoditised. How much exactly is difficult to say, but that is the only thing I can say.

Q: We have spoken about registrations earlier as well, and how expensive they can get when you have to register a product in a geography. Can you give us a sense of what products are under registration? What kind of product additions are you planning in the coming years?

Bubna: We have more than 1,000 products in the pipeline, and the process of registration is so uncertain that it is very difficult to predict, because we are dependent upon various government and bureaucratic authorities. They meet at their convenience, and they cancel meetings among themselves at the last moment.

Q: Looking at your product mix in the second quarter, nearly two-thirds of your revenue came from herbicides. Insecticides accounted for about 20% of your revenue, and fungicides made up the rest. The biggest jump was in insecticides—from about ₹133 crore to ₹219 crore. Is this growth sustainable? What is your likely revenue mix between herbicides, insecticides, and fungicides over the next three to five years as you expand your product pipeline and registrations?

Bubna: The growth has always been higher in herbicides and insecticides. This depends totally on market demand, climate, and sowing patterns, which are difficult to predict. But I’m happy that insecticides have also grown well.

Q: Is this sustainable?

Bubna: It is sustainable.

Q: We usually talk about the agrochem segment only. Let’s talk about the non-agrochem segment as well. It is a smaller part of the business, but what is the growth outlook here? You saw revenues decline despite volume growth. What is the outlook for this business?

Bubna: More or less matching with the agrochemical business.

Q: So, you would expect 20% growth even in the belting or non-agrochemical business? Am I right?

Bubna: Yes, you are right.

Q: I’m looking at the capex. In the first half of this year, you’ve done about ₹250 crore of capex, and now you have about ₹450–500 crore planned. Is this just maintenance capex, or is it for new debottlenecking or increased capacity? And typically, what kind of revenue returns do you get on this?

Bubna: It is mainly for capital expenditure on registrations, most of which are new. But the process is such that some products are closer to receiving registration, while others have just started. As I said earlier, the process is very uncertain and unpredictable. We will have to invest about ₹450–500 crore this year as well.

Q: The first half revenues were very strong, and even your balance sheet looked better because working capital days came down from nearly 120 to a little over 80. Is there likely to be more improvement from here on?

Bubna: At least maintaining around this level; there could be some small improvement as well.Read about our editorial guidelines and ethics policy