Best Agrolife reported a consolidated net profit of ₹96.29 Cr for FY25, with revenue of ₹1,289.89 Cr and EPS of ₹14.63. The company declared a ₹3 per share dividend too. But behind the clean audit lies a tax raid, assessment demands, and a ₹6.24 Cr hit on a subsidiary. So is this agro star still a multibagger, or are investors planting seeds in a minefield?
🧪 About the Company
- Industry: Agrochemicals (technical & formulations)
- Product Portfolio: Herbicides, fungicides, insecticides, PGRs
- Geography: PAN-India + expanding exports (China JV, global sub)
- Subsidiaries: 6, including Seedlings India, Best Crop Science, and Best Agrolife (Shanghai)
📈 From humble pesticide vendor to ₹2,000 Cr empire — Best Agrolife is India’s Balrampur Chini of Agrochemicals.
👨🌾 Key Management
| Name | Role |
|---|---|
| Vikas Jain | CFO & Promoter |
| Bhavesh Luthra | Director |
| Walker Chandiok LLP | Statutory Auditor (✅ clean audit) |
✅ Auditor gave an unmodified opinion.
⚠️ But also dropped an emphasis of matter on the IT raid — let’s talk about that later.
📊 Consolidated Financials (FY25)
| Metric | FY25 (₹ Cr) | FY24 (₹ Cr) | Change |
|---|---|---|---|
| Revenue | ₹1,289.89 | ₹1,095.22 | 🔼 +17.8% |
| EBITDA (est.) | ₹208.79 | ₹184.85 | 🔼 +13% |
| Net Profit (Consolidated) | ₹96.29 | ₹73.93 | 🔼 +30.3% |
| EPS (Diluted) | ₹14.63 | ₹11.29 | 🔼 +29.6% |
| Dividend (Recommended) | ₹3.00/sh | ₹3.00/sh | ➖ No change |
🔍 Profit margin improvement driven by pricing, not just volumes. Solid execution, if the tax cloud holds off.
💸 Fair Value Calculation
- EPS: ₹14.63
- Agrochem P/E Avg (Peers like UPL, PI Industries): 25x
- Fair Value Estimate: ₹14.63 × 25 = ₹365.75
📍 CMP: ₹338
🎯 Upside Potential: 8–10% more, unless the market rerates on post-raid fears
🧾 Balance Sheet (Consolidated)
| Metric | FY25 (₹ Cr) | FY24 (₹ Cr) |
|---|---|---|
| Total Assets | ₹2,013 | ₹1,950 |
| Net Worth | ₹758 | ₹647 |
| Borrowings (Total) | ₹566 | ₹606 |
| Inventories | ₹773 | ₹564 |
| Receivables | ₹563 | ₹465 |
| Cash & Cash Equivalents | ₹33 | ₹33 |
💡 Working capital intensive as usual. Agrochem business needs high raw material storage + seasonal sales. No red flags — just the agro grind.
💥 Income Tax Raid Details
- 🚨 Search & Seizure in Sept 2023
- 🏢 Raids across HQ + subsidiaries + homes of KMPs
- 📜 One subsidiary received ₹6.24 Cr demand for FY23–24
- 🧾 Appeal filed, other assessments still pending
- 👨⚖️ Auditor’s Note: “Uncertain impact — not factored in accounts yet”
😬 Translation: This won’t affect FY25. But any adverse order next year could dent FY26 books.
📈 Cash Flow Highlights
| Item | FY25 (₹ Cr) | FY24 (₹ Cr) |
|---|---|---|
| Cash from Operations | ₹228.16 | ₹35.53 |
| Cash from Investing | ₹-29.09 | ₹-63.31 |
| Cash from Financing | ₹-199.20 | ₹-0.84 |
| Net Change in Cash | ₹-0.13 | ₹-28.62 |
| Closing Cash Balance | ₹32.81 | ₹32.94 |
📉 Strong operating cash — rare in chemical companies. They raised no fresh equity or debt this year.
🧠 EduInvesting Take
Best Agrolife is not just surviving — it’s scaling smartly. With:
✅ 18% revenue growth
✅ 30% profit jump
✅ 30% EPS growth
✅ Clean auditor opinion (with a small “but”)
✅ Aggressive export push (China, Global arm)
💥 But there’s also:
🚨 A tax raid still under review
🧾 A ₹6.24 Cr demand already booked
⚠️ High receivables and inventory (working capital drag)
🔍 1 unaudited subsidiary still consolidated (minor)
So yes — the business is solid. But the shadow of compliance issues lingers like pesticide in post-harvest season.
🔥 Risks & Red Flags
- ⚠️ Tax demand of ₹6.24 Cr could snowball if IT dept extends the audit period
- 🧾 Large WC cycle → stretched operating efficiency
- 🌎 Overdependence on seasonal domestic demand
- 💼 Rapid subsidiary additions (China, Kashmir, Sudarshan, etc.) = complexity
🎯 Final Verdict
Best Agrolife isn’t just a turnaround stock anymore — it’s a full-fledged agrochem growth engine with global ambitions. But investors must ride the compliance roller coaster and hope SEBI and IT don’t derail the story.
CMP ₹338 looks fair if the growth story holds. But any adverse tax order = instant de-rating.
For now: Monsoon’s coming. So is a Q1 earnings blast. Get your popcorn.
Author: Prashant Marathe
Date: May 24, 2025
