🟢 At a Glance

Sharda Cropchem, an asset-light exporter of agrochemicals and conveyor belts, posted a jaw-dropping 857% TTM PAT growth in FY25. But behind the flashy numbers lie tax troubles, volatile realizations, and a 165-day debtor cycle. Efficient machine or over-fertilized fantasy?

🌍 About the Company

Sharda Cropchem isn’t your typical pesticide company. It’s more like an Amazon of agrochemicals — they don’t make much, they source everything, register aggressively across borders, and ship globally. Their other side hustle? Conveyor belts, dyes, and rubber sheets. Because… diversification, baby.

🧪 Core Segments:

• Agrochemicals (82%) – Formulations, generic APIs, and a growing registration pipeline
• Non-Agrochemicals (18%) – Belts, dyes, and general chemicals

📦 Global Model:

• 2,934 active registrations
• 1,034 pending
• 525 distributors, 500+ salespeople
• 80+ countries

👥 Key Managerial Personnel (KMP)

• Mr. R.V. Bubna – Chairman & Managing Director
  The founding brain behind Sharda’s global expansion and IP-free model.
• Mr. Amit Bubna – Executive Director
  Instrumental in managing operations and international sales strategy.
• Mr. Vivek Gaba – CFO
  Oversees financial controls, reporting, and treasury operations.

📊 Financial Performance Snapshot

📈 TTM PAT Growth: +857%
📉 TTM Sales Growth: +37%
📉 FY24 EBITDA Margin: Crashed from 16% → 10% → now bouncing back to 14%

🌎 Segmental & Geographic Breakdown

🔬 Agrochemical Sales Mix:

🌍 Agrochem Geographic Split:

🏗️ Non-Agro Revenue (18% of total)

NAFTA dominates (65% in Q2 FY25). Conveyor belts and dyes mostly go to industrials.

⚙️ Business Model & Strategy

✅ Asset-Light Ops:

• Doesn’t manufacture directly
• Gets formulations & APIs from third parties
• Focus on global registrations & logistics

📄 Capex Focus:

• ₹420 Cr in FY24 + ₹155 Cr in H1FY25
• FY25E: ₹400–450 Cr capex (mainly for global registrations)

📈 Sales Bounce in Q2 FY25:

• Revenue up 34% YoY
• Volumes up 20.6%
• Agro volumes up 24.6%

This ain’t a revival — it’s a comeback tour.

🧾 Tax Trouble

😬 The Income Tax Dept knocked twice:

• ₹79 Cr demand – March 2024
• ₹101 Cr demand – May 2024
  🚨 Total: ₹180 Cr pending
  Management says it’s “filing an appeal” — classic.

🧮 Fair Value Estimate

Assume FY26 PAT = ₹350 Cr (modest growth after FY25 rebound)
Apply sector multiple = 16x–18x
🎯 FV Market Cap = ₹5,600 Cr – ₹6,300 Cr
Shares Outstanding = ~9 Cr
🧮 Fair Value Range = ₹622 – ₹700

💥 CMP = ₹824
➡️ Stock is overvalued by 17–25% relative to long-term fundamentals

📌 EduInvesting Take

Sharda is a confusing beast:

• B2B pesticide exporter ✅
• Rubber belts & dye dabbles ❓
• Tax notices and registration ramp-ups ❗
• One year they earn ₹32 Cr, next year ₹304 Cr 🤯

But one thing’s clear — the model works in bull cycles.

They scale without asset baggage, play the IP-free generic game, and ride EU/NAFTA inventory cycles better than anyone.

🟢 500+ new registrations = future moat
🟢 500+ sales reps = distribution muscle
🟢 Minimal debt = more flexibility
🔴 Tax ghosts = uncertain overhang
🔴 165 Debtor Days = working capital stress

🧠 Final Word

This stock is like a genetically modified brinjal — it grows fast, sells worldwide, but you’re never sure if it’s fully safe.

If FY26 delivers another ₹300 Cr PAT, you’re looking at a lean pesticide player with real scale. If not — welcome to the world of chemical volatility.

Investors betting on Europe’s pesticide demand? Sharda’s your ticket.

But don’t forget — what grows fast can rot faster in agro.

✍️ Written by Prashant | 📅 June 16, 2025
Tags: sharda cropchem, agrochemical stocks, pesticides india, export-based businesses, asset light companies, sme with capex, high debtor days, fy25 profit rebound, chemical exporters india