Punjab Chemicals & Crop Protection Ltd (PUNJABCHEM) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Welcome to the Punjab Chemicals and Crop Protection Limited Q2 FY27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing "*" then "0" on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shalabh. Thank you, and over to you, sir.
Shalabh: Good afternoon, everyone, and a warm welcome to Punjab Chemicals and Crop Protection Limited's Earnings Conference Call for the second quarter and half year ended September 30, 2026. Joining us today on the call are Mr. Vinod Gupta, Chief Executive Officer, and Mr. Ashish Nayak, Chief Financial Officer. Before we begin, I would like to remind everyone that some of the statements made during today's call may be forward-looking and are based on the company's current expectations and assumptions. These statements are subject to risks and uncertainties that could cause actual results to differ materially. I would now like to invite Mr. Vinod Gupta to share his opening remarks, post which we will open the floor for the Q&A session. Over to you, sir.
Vinod Gupta (Punjab Chemicals & Crop Protection Ltd): Thank you, Shalabh. Good afternoon, and a very warm welcome to all of you on this Punjab Chemicals and Crop Protection Limited's Q2 FY '27 Earnings Call. I hope you have all had the opportunity to review our presentation and financial results for the quarter and half-year ended September 30, 2026. The global chemical industry continues to face complex macroeconomic headwinds, marked by persistent pricing pressure and sluggish demand in major international markets. Against this challenging backdrop, our second quarter and H1 performance reflects our operational resilience and strategic focus. In Q2 FY '27, we delivered a revenue of 231 crore, marking a 10% year-on-year growth compared to 209 crore in Q2 FY '26. This growth was driven by improved volumes in both domestic and international markets, even as product pricing remained constrained. EBITDA for the quarter stood at 25 crore, down 4% year on year, with an EBITDA margin of 10.8%, primarily reflecting the margin squeeze from lower realizations. PAT for the quarter was at 11 crore, with a margin of 4.9% compared to 13 crore in the corresponding period last year. For the first half of FY '27, revenue reached 465 crore, a growth of 8% year on year, supported by consistent order inflows and solid customer engagement. EBITDA stood at 52 crore, while PAT was at 24 crore. Despite pricing headwinds, we have managed to maintain stable capacity utilization and disciplined working capital management. Our domestic business continues to exhibit steady momentum, backed by strong monsoon coverage and healthy agricultural activities across key crop-growing regions. On the international front, while the recovery in Europe and North America has been gradual, we are witnessing early signs of destocking coming to an end in select product categories. We remain deeply committed to our long-term strategy of expanding our CRAMS portfolio, diversifying our product pipeline, and enhancing our wallet share with global innovators. Our R&D team continues to work on several active molecules across agrochemical and performance chemical verticals, which will support our growth trajectory in the coming years. With that, I would like to hand over the call to our CFO, Mr. Ashish Nayak, to provide a detailed walkthrough of our financial performance. Over to you, Ashish.
Ashish Nayak (Punjab Chemicals & Crop Protection Ltd): Thank you, Mr. Gupta, and good afternoon to everyone on the call. Let me take you through the detailed financial highlights for Q2 and H1 FY '27. Our gross profit for Q2 FY '27 stood at 88 crore, reflecting a gross margin of 38.1% compared to 39.4% in Q2 FY '26. The slight decline in gross margin was primarily due to product mix variations and competitive pricing in certain export markets. Employee expenses for the quarter were at 24 crore, while other expenses stood at 39 crore, broadly in line with our operational run rate. Finance costs for Q2 FY '27 reduced to 4.2 crore from 5.1 crore in Q2 FY '26, benefiting from our continued focus on debt reduction and optimized working capital cycles. Our net debt position continues to improve, and our debt-to-equity ratio remains well within conservative limits, giving us strong balance sheet flexibility. With this, we can now open the floor for the question-and-answer session. Thank you.
Moderator (Antique Stock Broking): Ladies and gentlemen, good day, and welcome to the Punjab Chemicals and Crop Protection Limited Q2 FY '27 earnings call hosted by Antique Stock Broking. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after this presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Riju Dalui from Antique Stock Broking. Thank you, and over to you, sir.
Riju Dalui (Antique Stock Broking): Thank you, Aashi. A warm welcome to all the participants in today's call for Punjab Chemical and Crop Protection. From the management side, we have Mr. Shalil Shroff, Managing Director; Mr. Vinod Gupta, CEO; and Mr. Davinder Gupta, CFO on the call. Without further delay, I would like to hand over the call to Mr. Gupta for his opening remarks. And post which, we will open the floor for Q&A. Thank you, and over to you, sir.
Vinod Gupta (Punjab Chemicals & Crop Protection Ltd): Thank you, Mr. Riju, and good afternoon to everybody. Welcome to Punjab Chemicals and Crop Protection Limited's earning call for Q2 and H1 FY '27. As already mentioned, we are joined by Mr. Shalil Shroff, our Managing Director; Mr. Davinder Gupta, our CFO; and other members of the management team. I trust you have had an opportunity to view the financial results and investor presentation which have been uploaded on the stock exchanges and our website and on our website. I will begin with the business environment and developments across our key areas. Our diversified product portfolio across agrochemicals, specialty chemicals, pharmaceutical and industrial chemicals continues to provide a balanced business presence across different industry sectors. During first half of FY '27, the Indian agrochemical market faced a challenging demand environment, primarily due to weak monsoon, delayed sowing and uneven rains across the country. This affected agricultural activity and crop protection demand across several regions. Market also saw impact of overall geopolitical situation where supply chain disturbances impacted availability of some raw material or demand coming from various regions. Europe market was Europe region was also unusually hot this year, which has impacted some sowing season in the current year. And that's where we have seen deferment of some demand to Q3 Q3 Q4. That's where we see generally a demand for high-profit and high-margin products. As far as our new product development is concerned, that exercise is going on very well. And we continue to expand our new product basket. And as we commercialize the product, we are into a learning phase, and we are competitive that going forward, these products will add to handsome margins to our product portfolio going forward. As far as the asset utilization is concerned, for Q1 and Q2, we have had healthy capacity utilization of more than 80% for all for for all all our factories, that is in Derabassi, Lalru, and Pune. We continue to focus on product development. And we remain focused on moving project to customer validation and then take it to a gradual commercial scale. We continue to strengthen our capabilities for timely execution, product quality, and building sustainable businesses with customers as a long-term partnership.
Vinod Gupta (Punjab Chemicals & Crop Protection Ltd): environment to support growth across agrochemicals and specialty chemicals division and that's where our search for rather are shortlisting of new facility for a new manufacturing location is progressing very well. Overall, our priorities remain strengthening the product portfolio, improving manufacturing efficiencies, developing customer relationships, and maintaining disciplined working capital arrangement. We will continue to pursue pursue growth while remain attentive remaining attentive to operating environment and quality of our business. With this, I will hand over to our CFO, Mr. Devender Gupta, who will take you through operational and financial performance. Over to you, Devender.
Davinder Gupta (Punjab Chemicals & Crop Protection Ltd): Thanks. Thank you, Vinod ji. Good afternoon, everyone. And thank you for joining us on this call of Punjab Chemical and Crop Protection Limited for Q2 and H1 FY '27 earnings. I'll now take you through the financial performance of the company for the quarter and half year ended September 30, 2026. Starting with the Q2 FY '27 highlights, our consolidated revenues from operations for Q2 FY '27 stood at 326.7 crores, compared with 255.2 crores in the previous year second quarter, registering a year-on-year growth of 28%. The domestic revenue witnessed a strong growth of 60%, while exports revenue saw a marginal improvement of 1.3% during the quarter. The new products contributed 19% during Q2 FY '27, and the growth in new products was phenomenal at 295%. Gross margins for the quarter stood at 34.1% as compared to 39.5% in the corresponding quarter of previous year. The gross margins were lower because of the introduction of new products at competitive pricing and also the face certain material cost increment, which led to this which was pursuant to the ongoing geopolitical situation. EBITDA for the quarter stood at 29.6 crores, compared with 26.2 crores in Q2 FY '26, representing an annual growth of 12.6%. EBITDA margin also stood at 9% for the quarter 2 FY '27. Profit after tax for the quarter was 13.5 crore rupees, PAT margin stood at 4.1%. Now I'll walk you through the H1 FY '27 highlights. Consolidated revenues from operations for H1 FY '27 stood at 673.9 crores, registering an annual growth of 17.3% over last year H1. Domestic revenue grew by 20.4%, and exports grew by 13.6% on y-o-y basis. New products contributed 17% during H1 FY '27, growing by over 130%. Gross margins for H1 FY '27 stood at 35.4%, compared with 35.9% in H1 FY '26. EBITDA for H1 FY '27 stood at 72.3 crores, compared with 60.6 crores in H1 FY '26, registering a growth of 19.3% over on y-o-y basis. EBITDA margins also stood at 10.7%. Profit after tax for H1 FY '27 was 35.5 crore, compared with 39.2 crores in H1 FY '26, registering a decline of 9.3%, mainly on account of absence of certain other incomes which were there in last year half first half, which are not there in current half. PAT margin also stood at 5.3%. So while the company's operational performance continued to be strong, there were certain missing other income which led to the decline in profit after tax. We are sure the coming quarters, Q3 and Q4, are going to be good quarters in terms of our performance, and we should be able to achieve our previous guidance. With this, I conclude my opening remarks and open the floor for the question and answers.
Moderator (Antique Stock Broking): Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. I repeat, if you wish to ask a question, you may press star and one. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Moderator (Antique Stock Broking): The first question is from the line of Mr. Jainam from Swan Investments. Please go ahead.
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