New Delhi: Sumitomo Chemicals India Ltd reported a resilient performance in the first quarter of FY27, with profit after tax rising around 20 per cent year-on-year to Rs 214 crore, even as revenue remained broadly flat amid challenging monsoon conditions and weaker domestic demand.
The company reported revenue of Rs 1,063 crore for the quarter. EBITDA increased 6 per cent year-on-year to Rs 233 crore, while EBITDA margin improved to 21.9 per cent, supported by better gross margins and price hikes. Gross profit margin stood at 39.2 per cent, an improvement of around 110 basis points over the year-ago period.
The company’s performance was supported by strong growth in several businesses. Revenue from metal phosphates increased 26 per cent, while the Animal Nutrition and Environmental Health divisions grew 19 per cent. Exports also recorded strong momentum, rising around 26 per cent to Rs 170 crore. Domestic revenue, however, declined about 3 per cent to Rs 893 crore.
Monsoon recovery could support agricultural business
The agricultural chemicals business faced pressure during the quarter due to the delayed southwest monsoon, rainfall deficit and lower kharif sowing during the early part of the season.
With the monsoon subsequently covering almost the entire country and the cumulative rainfall deficit narrowing to around 11 per cent in August, the outlook for sowing activity has improved. A recovery in agricultural activity could provide support to demand for the company’s crop protection portfolio.
The company has expanded its product portfolio with the launch of seven large products in FY26, including Lentigo, Excalia Max, Powerpull, Advika, Envoy and Oslava. Lentigo and Excalia Max have reportedly received a favourable market response and exceeded internal targets.
Further launches are in the pipeline, with Topgrain and Helibax expected during Q2FY27. The company also has three to four products from its parent company in the launch pipeline.
Greater focus on high-value manufacturing
Sumitomo Chemicals India is also expanding its role within the global operations of its Japanese parent, Sumitomo Chemical Company.
The Indian subsidiary has been elevated to the same tier as Japan, the US, Brazil and Europe for early-stage trials of new molecules. The development could strengthen the company’s role in the global product development and manufacturing chain.
The company is also evaluating opportunities in semiconductor chemicals in India through its operations.
A Rs 150-crore investment at the Dahej facility is progressing as planned. The facility will manufacture high-value patented molecules for the parent company, with commercialisation expected from Q2FY29.
The company has also approved investments in projects at Bhavnagar and Tarapur, which are aimed at meeting requirements of the parent company. Commissioning of these projects is targeted for Q4FY27.
Growth outlook
The company’s financial projections indicate continued growth over the next two financial years. Revenue is estimated to rise from Rs 3,238.3 crore in FY26 to Rs 3,556.7 crore in FY27 and Rs 4,007.2 crore in FY28.
EBITDA is projected to increase from Rs 670.9 crore in FY26 to Rs 800.3 crore in FY27 and Rs 921.7 crore in FY28. Adjusted profit after tax is estimated to rise from Rs 526.9 crore in FY26 to Rs 613.6 crore in FY27 and Rs 695.8 crore in FY28.
The company’s growth strategy is increasingly centred on new product launches, deeper engagement with its global parent, exports and investments in high-value manufacturing. These factors could strengthen its position within India’s agrochemical and specialty chemical sectors.
However, the business remains exposed to risks including weaker-than-expected adoption of new products and adverse weather conditions in domestic and international markets.
Market snapshot: The document cited Sumitomo Chemicals India’s market capitalisation at around Rs 26,774 crore, with a 52-week high of Rs 618 and low of Rs 363.
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