High rainfall, subdued pest activity dampen revenues; new patented combinations gain early traction

Best Agrolife Limited, a leading player in India’s agrochemical sector, reported its financial results for the third quarter and nine months ended December 31, 2025, highlighting a challenging operating environment marked by erratic weather conditions, softer farm incomes, and elevated channel inventories, while underscoring a strategic pivot toward patented products and operational efficiency.

Commenting on the performance, Managing Director Vimal Kumar said that Q3 FY26 sales were comparatively lower on a year-on-year basis due to climatic and market-related factors beyond the company’s control. October 2025 recorded exceptionally high rainfall across India, with precipitation at 112.2 mm, 49 per cent above the long-period average, making it the second-highest October rainfall since 2001. Uneven rainfall across North, West, and Central India, along with floods in parts of Punjab and Haryana, disrupted cropping cycles and led to lower pest incidence in paddy, significantly affecting demand in key markets.

West and Central India also received above-average rainfall, adversely impacting soybean spray programs in major regions such as Madhya Pradesh and South Rajasthan. Inventory carried forward from Q2 into Q3 limited fresh product placements. In horticulture, crops including grapes and fruits witnessed a subdued season owing to low pest incidence and disruptions in pruning activities. Favorable and stable Rabi temperatures further reduced disease and pest pressure in wheat, cumin, potato, and onion—categories that typically contribute meaningfully to Q3 revenues.

Farm income pressures compounded the demand slowdown. During the October–December 2025 harvesting period, all kharif crops except paddy traded at discounts of 9 per cent to 30 per cent to their respective Minimum Support Prices, compressing farmers’ purchasing power and dampening demand for high-value crop protection products. Elevated generic inventory at the trade level intensified price competition across the industry, affecting both sales and gross margins of patented and specialty products.

Despite the headwinds, the company emphasized resilience in its branded portfolio and distribution network. Two newly launched patented combinations, BestMan and Fetagen, achieved over four lakh treated acres each in their first year, reflecting strong farmer acceptance. Patented products accounted for 43 per cent of brand sales in 9M FY26, up from 29 per cent in the corresponding period last year, indicating a strategic shift toward higher-value differentiated offerings.

Financially, revenue from operations in Q3 FY26 stood at Rs 202.9 crore compared with Rs 274.1 crore in Q3 FY25. Gross margin for the quarter was Rs 65 crore versus Rs 89 crore a year earlier. EBITDA turned positive at Rs 3.8 crore compared with a loss of Rs 5.8 crore in the same quarter last year, with EBITDA margin improving to 1.9 per cent from negative 2.1 per cent. The company reported a net loss of Rs 12.7 crore in Q3 FY26, narrowing from a loss of Rs 24.2 crore in Q3 FY25.

For the nine months ended December 31, 2025, revenue from operations was Rs 1,101.1 crore compared with Rs 1,540 crore in 9M FY25. Gross margin stood at Rs 345.2 crore versus Rs 468.4 crore in the previous year period. EBITDA was Rs 127.1 crore compared with Rs 195.9 crore, with EBITDA margin at 11.5 per cent. Profit after tax for 9M FY26 was Rs 46.1 crore, down from Rs 91.8 crore in 9M FY25.

Operational discipline emerged as a key positive. Inventory was reduced by 24 per cent year-on-year, declining from Rs 770 crore as of December 31, 2024, to Rs 589.47 crore as of December 31, 2025. OPEX rationalisation efforts led to a 36 per cent year-on-year reduction in Q3 FY26 operating expenses (excluding finance and depreciation) and a 20 per cent reduction for 9M FY26, strengthening the balance sheet amid revenue pressures.

On the innovation front, the company secured patents for novel combination formulations including SFP-33 (Spinosad + Fipronil + Pyriproxyfen), Chlorantraniliprole + Chlormate + Clothianidin, and Pinoxaden + Metsulfuron-methyl + 2,4-D. It also received a process patent for Nano-Urea, a nano-particulate fertilizer designed to enhance nutrient efficiency and crop yields, and another for Para Benzoquinone. Additionally, the company obtained RC (468) for Isoprothiolane 15% + Trifloxystrobin 2.5% + Pymetrozine 7.5% SE.

Looking ahead, management indicated that three additional patented combinations are expected to be launched over the next three to nine months. With seasonal activities progressing across India and FY27 budgeting exercises completed, the company expressed confidence in improved growth momentum in the coming quarters, driven by portfolio differentiation, tighter working capital management, and sustained cost optimization.