Sumitomo Chemical India

“Our goal for H2 is to grow over last year's sales where the market allows while protecting profitability.”

“But in H2 at this point of time based on all the information available, our margins are expected to be in the normal kind of a range as per the historical levels.”

“So as a combination of that, we are expecting a stable kind of a performance and including on the margin front.”

“So this is like one step in the overall development of Dahej site with a INR150 crores investment. This is only for one intermediate for one blockbuster herbicide.”

“that is expected to be commercialized in Q2 financial year 2028-'29. So more specifically, the calendar year would be 2028 sometime, say, July to October kind of a situation.”

“one part of this capex, first part is expected to be completed within this current financial year and the second part is expected to be completed by end of the next financial year 2027 -28.”

“Some of this growth will also be in domestic market because some of this expansion, especially in the Tarapur site, is for domestic Indian market and not particularly focused on exports opportunities.”

“We are also evaluating few more additional capex projects for our parent company’s global needs and we will keep updating you as and when any project is approved by our parent company and our Board.”

“So currently we have not approved any capex for setting up the capacity for INDIFLIN for the global requirement point of view.”

“For the Indian quantities, we'll be manufacturing by end of this financial year. But there are no firm export plan of INDIFLIN from India which would happen as of now.”

“What is expected to come is higher utilization of the existing facilities and some increase in the volumes.”

“But however, our focus remains on export wherever we have registrations and of course our parent company, we continue to do that and we have the capacity to fulfill the requirement.”

“Together, these products grew about 22% in value over H1 of last year despite a very weak monsoon.”

“Q2 domestic revenues grew 2% to INR774 crores and H1 domestic revenue was broadly stable at INR1,657 crores.”

“Branded products made about 79% of domestic revenue.”

“If we talk about exports, there was a decline of 23% in Q2 to INR127 crores mainly due to the timing of shipments to Japan and South America.”

“For H1, exports were stable at INR300 crores with Africa, South America, Asia and Europe; each growing by 15% to 19%.”

“H1 FY '27 was one of the most difficult first halves for the Indian agrochemical industry in over a decade. The main reason was the erratic and unpredictable monsoon.”

“Overall, the season ended with a deficit of almost 13% of the normal rainfall.”

“Delayed sowing and dry spells reduced herbicide consumption. In August and September, farmers skipped spray rounds, which lowered demand for insecticides and fungicides.”

“We expect H2 of the current financial year to remain challenging for three main reasons.”

“Our sales volumes, however, fell by a high single-digit percentage due to lower consumption in the adverse weather conditions.”

“The cost increased because of the Middle Eastern war, the technical prices went up, a weaker rupee depreciation and high packaging, solvent and freight costs added to the overall cost of inputs. Companies including SCIL passed on these increases to a large extent.”

“The industry, therefore, carried high cost inventory into the period of lower volume and softer prices in Q2.”

“In Q1, our revenues were supported by the price increases which we took between the months of March and June 2026. In Q2, we kept our selling prices largely stable.”

“As a result, our Q2 gross margin was 40.7%, which was down 240 basis point year-on-year and our EBITDA margin was 20.5%, which was down 297 basis points.”

“For HI financial year '27, gross margin was 39.9% compared with 40.4% last year and EBITDA margin was 21.3% compared with 22%.”

“Cash and cash equivalent and liquid investments were approximately INR2,523 crores as of 30th September 2026, up from INR2,113 crores in March 2026.”

“If we talk about our balance sheet and working capital, our balance sheet remains essentially debt-free.”

“Net cash from operations in H1 financial year '27 was INR447 crores compared with INR435 crores in H1 2026.”

“Trade receivables at the end of September were INR887 crores, lower than INR903 crores a year ago.”

“Overall, net working capital was 76 days as of September 2026 compared with 55 days in September 2025.”

“In the entire world, we are proud to announce that India is the first country to commercially launch this product anywhere in the world.”

“The second product is Helibex, which is an insecticide launched to a limited extent starting from August to control key caterpillar pest.”

“And recently MOU was signed between one of the leading semiconductor players in India, which is developing our first fabrication plant for semiconductors in India, which is expected to become operational in a very short- to medium-term period.”

“However, our products are not the candidates to start immediately. The localization plant is going to take some time.”

“Sumitomo Chemical India is in some way part of those discussions, but nothing concrete, firm, structure or any kind of a specific role has been defined.”

“So at this point of time, we don't believe that we should give up any kind of future growth and give this cash return to the shareholders.”

“See, the utilization of cash is a different objective that calls for a larger discussion at the Board.”

“But in the future, I think we take your point which you mentioned that if there is no usage of the cash, it should be returned to the shareholders. So we will put it to the Board and our Board will keep taking I think decision.”

“This is my first earnings call since taking charge as Managing Director on 1st September of 2026 and I would like to begin with a few words on the transition.”

“Following shareholders' approval, he has been appointed as Non-Executive Non-Independent Director and has also been appointed as Chairman of the Board.”

“Mr. Sushil Marfatia also completed his term as Executive Director on 31st August 2026.”

“We also welcome Mr. Anand Mohan Tiwari to the Board as Independent Director.”

“Dr. Mukul Asher, who completed his term as Chairman and Independent Director on 31st August 2026”

“The World Meteorological Organization expects El Nino to strengthen further, peak around December and continue through February 2027.”

“Current estimates mention that reservoir levels across the country are at about 71% of the capacity and at least 25% lower than the last year at the same time.”

“The major setback or the major challenge happened in the quarter 2 primarily due to overstocking of some of the products to export to our parent company.”

“We don't expect the sales return to be impacting our second half.”

“We are not expecting significant any adverse factors in either revenues or any kind of margin, which you refer to.”

“Our commitment to you is continuity. The strategy, the financial discipline and the farmer-first approach that delivered our results over the last several years remain unchanged.”

“Q2 financial year '27, the revenue was INR907 crores, down 2% year-on-year.”

“HI financial year '27 revenue was INR1,971 crores, down 1% as compared to previous year.”

“Operating EBITDA was INR187 crores down 15% with an EBITDA margin of 20.5%, down 297 basis points.”

“The net profit was INR157 crores compared with INR178 crores last year, down 11% with a net profit margin of 17.3%.”