1. At a Glance
Sumitomo Chemical India Ltd is where Japanese R&D meets Indian agriculture. A legacy of patented pesticides, global expansion, and low-debt discipline makes this stock a complex cocktail of safety, science, and strategic scale-ups.
2. Introduction with Hook
If farmers are the warriors of Bharat, Sumitomo is their katana. This isn’t just another agri-input firm — it’s the stealthy shinobi of India’s crop protection warzone, blending ancient Japanese formulations with Indian ground-game hustle.
- FY25 Net Profit: ₹502 Cr
- FY25 Sales: ₹3,090 Cr
- ROCE: 25.1% despite a glyphosate court battle and low rainfall disruptions
3. Business Model (WTF Do They Even Do?)
Sumitomo Chemical India (SCIL) operates in:
- Agrochemicals (insecticides, fungicides, herbicides, bio-rationals)
- Animal Nutrition
- Environmental Health
Its model is split:
- Proprietary Products from the Japanese parent (SCC Ltd)
- Generic segment via Excel Crop Care merger
- Biotech & biologicals via US-based Valent Biosciences
- Exports to Africa and LATAM
Recurring themes: Patented + Generic = Dual moat.
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 3,511 | 2,833 | 3,090 |
| EBITDA (₹ Cr) | 668 | 474 | 623 |
| Net Profit (₹ Cr) | 503 | 370 | 502 |
| OPM % | 19% | 17% | 20% |
| Dividend (%) | 12% | 80%* | 12% |
Key Takeaway: FY24 saw a one-off 80% dividend — otherwise, the business is a textbook example of efficient capital usage.
5. Valuation
| Metric | Value |
|---|---|
| Current Price | ₹543 |
| P/E | 54x |
| Book Value | ₹58 |
| Price/Book | 9.35x |
Fair Value Range (FV):
Using 3 models (Earnings Power, DCF, EV/EBITDA comps), we land here:
→ ₹420 – ₹580 per share
At ₹543, it’s flirting with the upper bound. Not expensive, not a bargain — just premium Japanese packaging.
6. What’s Cooking – News, Triggers, Drama
- Acquisition of Barrix Agro Sciences (Dec 2023): Entry into organic/eco agri-inputs
- Glyphosate Ban Battle: Ongoing legal hearings
- Rs. 65 Cr CAPEX: New patented product manufacturing
- R&D Flex: Over 130+ proprietary molecules across verticals
7. Balance Sheet
| Item | FY24 | FY25 |
|---|---|---|
| Equity Capital | ₹499 Cr | ₹499 Cr |
| Reserves | ₹1,941 Cr | ₹2,397 Cr |
| Borrowings | ₹25 Cr | ₹45 Cr |
| Total Assets | ₹3,287 Cr | ₹3,930 Cr |
Highlights:
- Net-debt free
- Strong reserves
- Expansion funded via internal accruals
8. Cash Flow – Sab Number Game Hai
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| CFO | 389 | 756 | 459 |
| CFI | -327 | -426 | -404 |
| CFF | -73 | -331 | -66 |
| Net Flow | -10 | -1 | -11 |
Key Insight:
Operating cash flow solid. Negative net cash due to expansion + working capital bulge.
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 19% | 19% | 18.8% |
| ROCE | 30% | 21% | 25.1% |
| Debt/Equity | 0.01x | 0.05x | 0.05x |
| Inventory Days | 157 | 135 | 154 |
| CCC (Days) | 168 | 131 | 136 |
Verdict: Lean, mean, and fairly clean. Cash conversion improved in FY24, but remains a monitorable.
10. P&L Breakdown – Show Me the Money
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Sales | 3,511 | 2,833 | 3,090 |
| EBITDA | 668 | 474 | 623 |
| PAT | 503 | 370 | 502 |
| OPM % | 19% | 17% | 20% |
Margins bounced back post-Glyphosate drama and weak monsoons.
11. Peer Comparison
| Company | CMP (₹) | P/E | ROCE | OPM | PAT (₹ Cr) |
|---|---|---|---|---|---|
| PI Industries | 4,045 | 37x | 22.6% | 27.3% | 1,660 |
| UPL | 653 | 65x | 7.7% | 15.3% | 812 |
| Bayer Crop | 6,196 | 49x | 24.8% | 12.6% | 568 |
| Sumitomo Chem | 543 | 54x | 25.1% | 20.1% | 502 |
Positioning: More profitable than UPL, less scalable than PI. It’s the “Royal Enfield” of agri — efficient, classy, but not for speed lovers.
12. Miscellaneous – Shareholding, Promoters, Events
- Promoters (Japan): 75%
- FIIs: 3.6%
- DIIs: 8.1%
- Public: Falling under 14%
- Bonus/Special Dividends: Regular player
- Court Fights: Glyphosate restrictions under challenge
- M&A: Actively acquiring bio-organic startups
13. EduInvesting Verdict™
Sumitomo Chemical India Ltd is not your get-rich-quick penny stock. It’s a slow-cooked tempura — clean, crunchy margins and a well-defended IP moat. But growth has flatlined a bit, and at a 54x P/E, you’re paying sushi-roll prices for bhindi yield.
Still, if you want pesticide power without choking on governance or debt, Sumitomo stands tall — like a samurai with a spraying tank.
Metadata
– Written by EduInvesting | 13 July 2025
– Tags: Agrochemicals, Crop Protection, Patents, Japan-India Business, Glyphosate Drama, Excel Crop Merger, Low Debt Stocks, Sustainable Farming
